GM: Finally turning a corner?
General Motors' Chevrolet brand vehicles are seen on a sales lot as the company announces a 2 billion dollar quarterly profit on November 10, 2010 in Pembroke Pines, Florida. The profit is the third consecutive profitable quarter for the company and it may have its first full-year profit since 2004.
STEVE CHIOTAKIS: General Motors today reported its profit nearly doubled in the 2nd quarter -- thanks to higher prices on its cars and trucks. Some analysts believe GM may've made a turn from its unprofitable days of the past. Dennis DesRosier is an auto industry analyst, and he's with us this morning from Toronto. Hi, Dennis.
DENNIS DESROSIER: Yes, hi, thank you very much.
CHIOTAKIS: You got it. It sounds like GM's profits were pretty strong. It was able to charge higher prices, why is that?
DESROSIER: They've got themselves leaned out a little bit and they're producing vehicles that consumers like. When you do that, you can charge a little bit more. Five quarters in a row of profits for GM, and they're coming together. I still think there's a lot of work to do from a market perspective, and within the company. They're far from being entirely out of the woods, but five quarters of profits is nothing to sneeze at.
CHIOTAKIS: How did that gas price increase, affected, do you think, the sales? Obviously they did well despite it, right?
DESROSIER: Well, they did. Gas prices and the size of vehicle is directly proportional. You can go in month-in and month-out, and if gas prices start to go up, people buy smaller vehicles. Gas prices come down, people buy larger vehicles.
CHIOTAKIS: You think the Japan quake had any impact -- or will have any impact?
DESROSIER: Oh, absolutely. Japan probably cost the North American and Japanese manufacturers a million units of sales -- easily. Now some of those consumers are just gonna hang in there and wait for their Japanese product -- but I'll bet you about half of them, perhaps, you know, left the Japanese brand, and went over to other companies. Ford was the biggest beneficiary of that, I believe. But, sure, GM would have benefited as well, and Chrysler.
CHIOTAKIS: Dennis DesRosier is an automotive industry consultant. Thank you.
DESROSIER: Thank you very much, take care.