GM profit beats estimates on cost-cutting, higher vehicle prices | The Globe and Mail

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General Motors Co on Tuesday posted better-than-expected quarterly results as cost-cutting and higher vehicle prices offset a double-digit decline in U.S. sales volume and said it expected 2018 would be a strong year globally and in North America, sending its stock up more than 1 per cent.

Speaking to reporters, Chief Financial Officer Chuck Stevens said that despite recent stock market volatility due to concerns that the U.S. economy may be overheating, the No. 1 U.S. automaker is “not overly concerned about inflation.”

“Our forecast is premised on continued growth in the U.S. economy,” Stevens said. He said GM expects interest rates to rise 75 basis points in 2018.

Stevens said that a 25 basis point increase in interest rates meant an increase of only $3 for the average car loan payment.

“As long as these are moderate (interest rate) increases, they are easily digestible,” he said.

Thanks to cost-cutting and higher transaction prices for its more popular, and higher-margin, SUVs and pickup trucks in North America, the Detroit-based automaker’s global pre-tax margin rose to 8.2 per cent in the quarter versus 6.5 per cent in the same quarter in 2016.

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GM profit beats estimates on cost-cutting, higher vehicle prices – The Globe and Mail.