GM raises car prices and eyes production cut after Brexit impact on sterling
Vauxhall cars owner General Motors (GM) has pushed up UK prices and is eyeing a production cut in Europe as its grapples with the impact of the Brexit-hit pound.
The US motor giant behind Chevrolet and Cadillac more than doubled net income to 2.77 billion US dollars (£2.3 billion) in the third quarter, but suffered a 100 million US dollars (£82.4 million) blow from the slump in sterling.
The firm said it had to raise UK car prices by 2.5% on October 1 after the EU referendum result caused the British car industry to hit a "speed bump" .
GM warned that if the pound continues to flag throughout the rest of this year then it could take an earnings hit of around 300 million US dollars (£247 million) in the fourth quarter.
It said its European arm was on course to break even before the Brexit vote, but may now struggle to meet its full-year profit targets for the region.
Speaking to the Financial Times, chief financial officer Chuck Stevens would not rule out a possible capacity cut in Europe. He added: "We are prepared to take whatever action is necessary to put Europe back on the path."
Revenues hit a record 42.8 billion US dollars (£35.3 billion) in the three months to the end of September 30, boosted by its cost-cutting strategy and a strong performance in China.
US motor sales have started to slide after hitting a record 17.5 million last year, but GM seems to be unaffected by the slowdown.
The company expects the strong performance to continue through the fourth quarter and is pencilling in pre-tax earnings to come in at the high end of previous forecasts of 5.5 US dollars (£4.5) to 6 US dollars (£4.9) per share.