GM sets record in second quarter: European operation leads way while strong growth is reported in Latin America

GENERAL Motors Corporation, the world's biggest car manufacturer, yesterday reported record second-quarter profits of dollars 1.9bn, more than double the dollars 889m for the same period last year.

The profits came as a result of strong vehicle sales both in the US and internationally, together with the effects of a cost-cutting drive. Total sales stood at dollars 40.4bn, an increase of 11.4 per cent over the second quarter of 1993.

GM's international automotive profits rose to dollars 543m from dollars 306m, due mainly to a significant increase in profits for its European operations, though Latin American results were also strong. Its car and truck market share in Europe rose from 12.5 to 12.8 per cent.

In Western Europe, sales of Opel-Vauxhall cars rose by 7.2 per cent in the first half of the year, and the company said capacity expansion was planned to meet demand for the Opel Corsa model. Production at the Eisenach factory in Germany is soon to be increased by 640 cars a day, with three shifts operating. Together with cars built at Zaragoza in Spain, GM will then be making 2,400 Corsas a day.

Net margins internationally improved from 4.6 to 7.5 per cent. GM said: 'The margin levels achieved in our international sector reflect continued skilful cost- cutting and strong market performance despite the somewhat weak economic conditions in Europe.'

North American operations had net income of dollars 723m compared with a loss of dollars 33m in the second quarter of 1993. GMAC, GM's finance subsidiary, had income of dollars 216m, down from dollars 285m.

Net margins in North America were 2.7 per cent, though GM said this was well short of its target of 5 per cent. GM's share of the total US vehicle market was 33.1 per cent for the second quarter, down slightly from 34.8 per cent for the same quarter in 1993.

But GM said it had been short of inventory for some popular models and forecast that its market share would be flat for the year.