General Motors records £2.26bn loss due to Vauxhall-Opel sale
Expenses associated with sell-off of European brands hit GM’s profitability, but share price rises after revenue exceeds expectations
General Motors recorded a loss of £2.26bn in the third quarter of this year, due to costs related to the sale of the Vauxhall and Opel brands.
The American firm recently completed the sale of its European operations to the PSA Group in a deal worth around £1.9bn. However, the cash it received from that sale was offset by costs relating to the deal, including charges relating to pensions and contract cancellations.
While GM had warned investors of a special one-time charge of costs relating to the sale, the final figure of £4.1bn was slightly larger than anticipated and only partially offset by the income of the firms.
The sell-off of Vauxhall and Opel is part of a wider series of moves by GM to withdraw from unprofitable markets. It has also announced it will stop selling vehicles in India and sell its South African operations to Isuzu.
GM’s revenue in the third quarter of the year – running from July to September – totalled £25.5bn. That was down 13.5% year on year but was higher than had been expected, prompting the firm’s share price to rise after the announcement.
The firm’s third-quarter earnings report also highlights the growing importance of China to car makers. GM brands delivered 982,311 vehicles in the country in that period, an increase of 12.3% year on year.
Source: Autocar Online