Detroit Three's results for first half of 2012
GM and Ford report profit decline due to significant losses in Europe
This Report outlines the business results by the Detroit Three (GM, Ford, and Chrysler) in the first half of 2012 (January to June) and future activities. Detroit Three had steadily improved their business performance in 2010 and 2011, but due to significant losses in Europe and the rapid decline of profits in South America (Ford also suffered losses in Asia Pacific and Africa), in the first half of 2012, GM's EBIT-adjusted (Earnings Before Interest and Tax-adjusted) fell from USD5 billion a year earlier to USD4.3 billion and Ford's Pre-tax Profit declined from USD5.4 billion to USD3.6 billion.
The Detroit Three have enjoyed strong sales in the U.S. market, a major source of their profits. GM expects the volume of the 2012 U.S. light vehicle market to be 14 to 14.5 million units. Yet, the market share of the three OEMs, which grew in 2010 and 2011, declined from 47.1% to 45.0% in the January-July period of 2012 (Chrysler boosted its market share).
GM says that, even if it loses some of its market share, it will not maintain its share by boosting production and incentives as it did before it filed for Chapter 11, and that it will maintain profitability by enhancing its product competitiveness (In the first half of 2012, GM's EBIT-adjusted in its business in North America grew by 4.4% y/y to USD3,656 million).
Ford intends to fully promote "One Ford Plan" including in Europe and Latin America. It also announced in August that it would introduce the "Global One Manufacturing System".
In Europe, GM and Ford are said to announce full-scale restructuring plans in the near future.
Since sales in North America account for 90% of Chrysler's total sales volume, the OEM was not much affected in Europe and South America as GM and Ford were affected. Chrysler's sales in the U.S. grew by 27.7% in the January-July period of 2012, steadily improving its performance. In June 2012, Chrysler launched the Dodge Dart, which is the first model that it jointly developed with Fiat. It will introduce multiple models that it is jointly developing with Fiat in North America starting in 2013.
| GM: posts record net income of $7.6 billion in 2011 (Mar. 2012)
Ford: sales goal for 2015 projected to be eight-million vehicles (Jun. 2012)
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