General Motors Company
(
GM
) announced that it will start manufacturing its first plug-in
hybrid version of Cadillac, ELR, in the later half of 2013. The
company will assemble the vehicle at the Detroit-Hamtramck
Assembly plant that also produces another hybrid, Chevrolet Volt
and its European version Opel/Vauxhall Ampera, and Australia/New
Zealand version, Holden Volt.
Cadillac ELR will be equipped with four-cylinder gasoline engine
generating power once the batteries are exhausted. It is a
production version of Cadillac Converj concept car, unveiled at
the Detroit auto show in 2009. The introduction of ELR is
believed to be GM's step toward its commitment of delivering
electric vehicles with advanced technology.
However, GM did not provide any update on the mileage of Cadillac
ELR, which will operate much like the Volt. The 2013 Volt travels
38 miles on full charge and has a full driving range of 380
miles. It delivers 98 miles-per-gallon.
Recently, GM suspended production of Volt for 4 weeks possibly
due to weak sales of the vehicle. However, GM refuted the
argument, stating that the temporary shutdown was caused by
retooling for the production of newly designed 2014 Chevrolet
Impala at the plant in early 2013.
General Motors will invest $35 million for the production of
Cadillac ELR, bringing the total investment at the plant to $561
million since December 2009. The company expects sales of
Cadillac to increase two fold from 147,000 vehicles in 2010 in
the U.S. Together with 10 new models including Cadillac ELR, the
company expects to occupy top position in the U.S. luxury auto
market.
In the second quarter of 2012, General Motors registered a 41%
decline in profits to $1.49 billion or 90 cents per share from
$2.52 billion or $1.54 in the corresponding quarter of 2011.
However, reported earnings per share exceeded the Zacks Consensus
Estimate by 15 cents.
Total revenue fell 4.5% year over year to $37.60 billion in the
quarter, missing the Zacks Consensus Estimate of $37.98 billion.
The decline in profits and revenues was attributable to
strengthening of U.S. dollar against most of the major currencies
as well as weak macroeconomic conditions globally, especially in
Europe and South America.
Detroit, Michigan-based General Motors is the largest automobile
manufacturer in the world and one of the 'Big Three' U.S.
automakers. However, like its competitor
Ford Motor Co.
(
F
), the company's significant exposure to troubled Europe has
adversely affected its operations.
Currently, General Motors retains a Zacks #3 Rank, which
translates into a short-term Hold rating and we have a long-term
Neutral recommendation on the stock.
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