The biggest U.S. carmaker General Motors raised its 2016 earnings outlook on Jan. 13 Wednesday as it follows up a banner year of U.S. sales with major product launches and touted the benefits of hard-won efficiencies.
General Motors has put together a respectable string of sales strategies: 28 consecutive months of growth in commercial vehicle sales to companies.
As GM pulls back from less-profitable sales to rental agencies, the company has channeled much of those resources into the more-lucrative business of selling pickups, vans and Chevrolet Malibus and Equinoxes to contractors, landscapers and florists.
GM hiked its dividend by six percent and lifted its share buyback program by $4 billion to $9 billion in a sign of confidence in its outlook. The decision to grow its near-term sales and profit targets indicates the company is confident that its big gamble to lead the industry in offering steep consumer discounts is paying off. It also suggests the discounts that have fueled recent sales of new cars and light trucks are likely to continue. Rivals Ford Motor Co. and DaimlerChrysler AG's Chrysler unit matched their bigger competitor, but GM appears to be outdoing its rivals in offsetting the cost of consumer discounts by cutting costs and pushing a more profitable kinds of vehicles.
"We made significant progress executing our strategic plan and the results are being demonstrated through our improved earnings," said GM chief executive Mary Barra. She said GM expects the key China market will "be slower growth and it will be more volatile" over the short run as the world's second-biggest economy encounters bumpier conditions.
