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GM Remains Optimistic After Brexit
General Motors Co. hasn’t changed its 2016 projections for Europe and the U.S. following last week’s vote by Great Britain to leave the European Union.
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General Motors Co. hasn’t changed its 2016 sales projections for Europe and the U.S. following last week’s vote by Great Britain to leave the European Union.
It will take several months to fully assess the impact of the referendum, GM chief economist Mustafa Mohatarem tells reporters in Detroit. He says the company will wait for England to name new leaders and set rules for the transition process before it makes any forecasting adjustments.
GM still expects its European operations to be profitable this year, which Mohatarem notes would be the first time in more than 15 years. The carmaker’s two plants in England, which accounted for 13% of Opel and Vauxhall vehicles built last year, are running at near capacity. But Mohatarem says output could be increased if currency exchange rates remain favorable to export more vehicles to EU countries.
GM also is sticking with its bullish forecast that calls for record industry sales in the U.S. of 17.6 million light vehicles this year. If anything, Mohataram says, the Brexit vote could have a positive effect in the U.S. because he believes it's less likely that the Federal Reserve will raise interest rates this year.
U.S. light vehicle sales are up 1.2% through May, according to Autodata Corp.
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