Thursday, May 5, 2011

GM Sees Highest Earnings in More Than 10 Years

General Motors posted its largest quarterly profit in more than 10 years, thanks to fuel-efficient cars and smaller SUVs that have become more popular as gas prices have risen steadily. 
GM said Thursday its earnings were $3.2 billion, or $1.77 per share, in the first quarter. 
GM's Detroit rivals, Ford and Chrysler, also have posted strong earnings as the U.S. auto industry is recovering from its near-death experience of a few years ago.  
GM got a lift from its new small car, the Chevrolet Cruze, and from crossover SUVs such as the Chevy Equinox and GMC Terrain, which offer better fuel economy than traditional large SUVs. Revenue was up 15 percent to $36.2 billion, thanks to a 25 percent gain in U.S. sales and a 10 percent hike in China, GM's biggest market. Experts say GM's sales are likely to carry it back to the top of the world auto industry, a position it lost to Toyota. 
The funny thing about this is the U.S. automakers used to claim that there is no way they could be profitable making fuel-efficient vehicles. Never mind the fact that their Japanese rivals were kicking their rear ends by doing just that. 
Now, it seems, the U.S. companies finally get it. If you want to have success in the auto industry, give customers reliable cars that are fuel-efficient and suit their lifestyle needs.

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