General Motors CEO Mary Barra (left) and GM president of North America Mark Reuss speak to the media during the company’s global business conference at the Milford Proving Grounds in Michigan yesterday. GM yesterday said its pre-tax global margins target is 9% to 10% by ‘early next decade’.

Reuters/Milford, Michigan

General Motors Co yesterday said it is targeting an increase in earnings per share to between $5 and $5.50 per share, from its goal of $4.50 per share this year.
The No 1 US automaker said it will increase its return to investors by stronger profit margins in China and North America, as well as operating efficiencies and share buybacks.
In an annual presentation to investors in the Detroit suburb of Milford, Michigan, GM said its pre-tax global margins target is 9% to 10% by ‘early next decade.”
The Detroit-based automaker, which reported a 12% rise in September sales, has had a difficult time convincing Wall Street of its value, as its shares have fallen below $30 recently, well short of its 2010 initial public offering of $33 per share.
GM said it will have revenue of $155bn this year as well as global margins of 6.8% and a 24% return on invested capital.
Shares rose 1.5% to $30.49 in early trading.
The company will save about $5.5bn in the next three years in efficiencies in manufacturing, administration and purchasing, which will pay for investments in technology and brand development.
The savings through 2018 will “more than offset” the technology and brand investments, GM said.
Some $2bn of the savings will be on materials GM uses for its vehicles, said Mark Reuss, the company’s global product chief.
GM chief executive Mary Barra said the company will develop its autonomous vehicle program by having its employees at its primary technical centre in Warren, Michigan drive a fleet of plug-in hybrid 2017 Chevrolet Volts.
“We will redefine customers and their personal mobility,” said Barra.
Barra spoke with Reuters about this effort earlier this week.
She said this effort “starts with connectivity” that will be used to advance its autonomous vehicles. It will also include an electric bicycle that the company expects to be sold in densely populated global cities.
Barra said GM executives will update investors on its plans in China and India later yesterday.
GM plans for 39% of its global sales to come from new or refreshed vehicles, up from 26% this year. It said that the share of those new vehicles will be 40% of its total sales in 2017, 31% in 2018, and 40% in both 2019 and 2020.
Barra said she has not had any further contact with Fiat Chrysler Automobiles. Several months ago, Fiat Chrysler CEO Sergio Marchionne sent Barra an e-mail saying he wanted the two companies to merge, a notion Barra has consistently said she and the company’s board of directors are not interested in.
GM said it expects $9bn to $10bn of annual free cash flow by 2020.
GM expects industry growth in China of 3% to 5% each year from 2014 to 2020. One of major reasons that GM shares have fallen recently is that its China sales are threatened by a general weakening of the world’s top auto market and No. 2 economy.
While the electric vehicle market has been pressured by low fuel prices in 2015, a lowering of the costs of EV battery cells will fall by 2022 to the threshold of $100 per kilowatt-hour that analysts have said will allow EVs to compete with vehicles fuelled by petroleum.
Currently, the cost of battery cells is about $145 per kWh.
Global auto sales industry-wide will grow by more than 50% to 130mn vehicles by 2030, from about 85mn now.
While GM, the No. 3 global automaker by sales, is not interested in merging with global No 7 automaker Fiat Chrysler, it expects to gain $2bn to $3bn in savings from developing technology with other automakers.