General Motors has given its European arm a vote of confidence, despite huge losses in 2012.
General Motors Europe posted a loss of more than 1.1billion in 2012, in stark contrast to its profitable North American parent company. However, GM's vice-president and chairman of the Opel supervisory board, Stephen Girsky, has confirmed that the manufacturer is 'committed to GM Europe and aims to have the company back to profitability by around 2015 or 2016.'
Girsky elaborated on the company's intentions, saying that there is a 10-year plan in place, which will result in 'billions' being invested and should result in 23 new products and 13 new engines by 2020.
Other key elements to GM's strategy include its alliance with PSA Peugeot Citroen, which also posted heavy losses in 2012. The two companies plan to build a number of commercial and passenger vehicles together, which will help to reduce the cost of parts and manufacturing.
Dr. Karl Neumann, president of GM Europe, admitted that this is critical, because 'we sold one million cars last year and that should have been enough to make a profit. We do have a big problem with product cost.'
GM's purchase of Ally Financial Inc, which was confirmed in February, is another key step in the process because it will allow for better, more competitive financing options across a larger number of European markets.
Girsky did confirm that the forecasts for profitability were based on 'conservative assumptions that the market would get slightly better. Of course, this is a living plan that we will have to adjust along the way.'