General Motors Company
) plans to spend C$250 million ($243.46 million) for gearing up
its CAMI Automotive Inc. assembly plant in Ingersoll, Ontario for
future production. Currently, the plant produces well-known
Chevrolet Equinox and the GMC Terrain crossovers utility
CAMI is currently operating at full capacity. As a result, the
plant has been sending some vehicles to GM's Oshawa, Ontario
plant to finish assembly work.
Currently, crossover utility vehicles occupy the lion's share in
the U.S. market. More than 80% of vehicles produced in Canada are
shipped to the U.S. and crossovers constitute roughly 40% of
automobile production in Canada.
GM's investment in CAMI facility is part of the $1.5 billion GM
committed to invest in its North American plants in 2013 as part
of its $8 billion annual investment plan for its global
operations for new vehicle development.
GM has invested $10.2 billion in its North American facilities
since 2009. GM aims to boost market share and increase vehicle
pricing in North America. The company expects to enhance profit
margins in the region to 10% in the next three or four years from
Meanwhile, the company has targeted break-even results in Europe
by 2015. In China, GM intends to improve margins by continuing
investing in Cadillac and rolling out its OnStar communications,
in-car safety system.
Recently, at an industry conference in Detroit, GM stated that it
expects modest growth in global auto sales in 2013 as
improvements in China and the U.S. will be offset by sluggish car
sales in Europe. The automaker predicted a 5% rise in industry
sales in the U.S. and international market each and European
market to shrink 4% in the year.
The company foresees pricing pressures to exist, particularly in
China and Europe. However, it expects that moderate market share
gain across the world, driven by new vehicle launches, will boost
its profit margins. GM plans to upgrade 70% of its global lineups
by the end of this year.
GM, a Zacks Rank #3 (Hold) stock, posted higher profits of $0.8
billion or 48 cents per share in the fourth quarter of 2012,
compared with $0.7 billion or 39 cents in the same quarter of
2011. However, earnings missing the Zacks Consensus Estimate by a
penny. The results excluded net gain from special items of $0.1
billion or 6 cents in the 2012-quarter and net loss from special
items of $0.2 billion, or 11 cents in the 2011-quarter.
Revenues in the quarter scaled up 3.4% to $39.3 billion, which
was higher than the Zacks Consensus Estimate of $38.6 billion.
Unit sales escalated 4.2% to 2.3 million vehicles. The automaker
occupied a market share of 11.5% during the quarter, down from
11.6% in the year-ago quarter.
GM expects to boost its top-line in 2013 with the help of new
vehicle launches. At the same time, the company believes cost
control measures will boost its bottom line growth. It expects
2013 capital expenditures to be at the 2012-level.
Few stocks that are performing well in the industry where GM
STRATTEC Security Corporation
). Both Gentherm and STRATTEC carry a Zacks Rank #1 (Strong Buy)
while Oshkosh retains a Zacks Rank #2 (Buy).
GENERAL MOTORS (GM): Free Stock Analysis
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