Despite a hit from the semiconductor crunch in the fourth quarter, General Motors (GM) projected a highly profitable 2022 based on strong consumer demand in the face of rising inflation.
Profits fell in the final quarter of 2021 as GM saw global car sales sink. But the big US automaker still managed to notch a record $10-billion in annual profits as tight retail inventories lifted prices.
GM signalled it expects comparable profits in 2022 in spite of cost pressures in commodities, freight services and labour.
Executives cited robust consumer hunger for new vehicles, with pent-up demand for “several million” vehicles driving the market, according to Chief Executive Mary Barra.
“We expect to see strong pricing and that will continue in 2022,” she said in a conference call with reporters.
“We continue to have low inventory so those fundamentals are even more important than overall inflation from a vehicle price outlook,” said Barra.
Barra also said the semiconductor supply outlook was gradually improving, though she added the caveat that additional Covid-19 outbreaks or another disruption also looms as a possibility.
“This is our best estimate,” Barra said on a conference call with analysts. “This is what we think we’re going to be able to do.”
In light of this improvement in semiconductors, GM projected a 25-30% increase in an auto production in 2022. The automaker earned a profit of $1.7-billion fort he quarter ending December 31, down 38.7% from the final three months of 2020 as revenues dropped 10.5% to $33.6-billion.
