3 Aug 2012

Lower quarterly profit at GM

12:06 pm on 3 August 2012

General Motors has posted a reduced quarterly profit, after a slump in sales in Europe.

Income for the American carmaker fell 41% to $US1.5 billion in the three months to June compared with the same period a year ago.

GM's European operations lost $US361 million, though analysts are impressed the company managed to hold prices steady despite the weak economy.

But RBC Capital Markets analyst Joseph Spak says GM needs to cut the cost of building cars in Europe to combat slumping sales and aggressive deals offered by rivals such as Volkswagen.

GM has recorded 12 years of losses in Europe. It and has begun reducing the number of temporary and contract employees, and talking with unions about improving productivity and reducing costs and manufacturing capacity.