Strong demand for pickups and sport utilities drove General Motors' quarterly profit sharply higher. Fred Katayama reports.
Strong demand for pickups and sport utilities produced a surge in GM's quarterly profit. Low gas prices drove demand for the beefier trucks in its lineup, and GM has a lot of that in its product mix. Chevy trucks and crossovers did particularly well in the U.S., and Cadillac gained momentum. The huge sales gains in North America offset the weakness in South America and Europe. GM sales rose sharply in the world's largest auto market, China, despite the slowdown in the economy. It regained its position as the top auto maker there, increasing its share of the market. Sales of cars and sport utilities produced by its budget Baojun brand nearly doubled in the quarter. GM notched a record profit in 2015, and is sticking with its outlook for solid profit growth this year. The CFO says he doesn't see any downturn for the industry in the next few years. Investors have worried that sales growth has peaked, selling off auto shares despite strong results. RBC Capital Markets analyst Joseph Spak said, "In our view, we are at a plateau, not a peak, and GM certainly has some company specific drivers that should allow North America margins to improve in 2016." GM stock, which has outperformed rivals Ford and Fiat Chrysler this year, rose in early trading.