GM to pay first dividend since 2008

By BBC

GM has benefited from the ongoing recovery in the global car market (FILE)

US carmaker General Motors (GM) said it will resume dividend payments, capping a remarkable turnaround since its 2009 bailout by the US government.

It will pay a dividend of 30 cents per share, the first since July 2008.

GM filed for bankruptcy at the height of the global financial crisis and was rescued after the government pumped in billions of dollars.

But the firm has since seen a strong recovery, led by a jump in sales in key markets such as the US and China.

On Tuesday, the firm said it sold 9.71 million vehicles in 2013, an increase of 4% on the year before.

“This return to shareholders is consistent with our capital priorities, and is an important signal of confidence in our plans for a continuing profitable future,” Dan Ammann, GM’s chief financial officer, said in a statement.

‘Exceedingly well’

GM, like other global car makers, has benefited from the ongoing recovery in the global car market.

Car sales in key markets such as China and US have been rising – recovering from the slump seen in the years following the global financial crisis.

According to data released over the past few days, auto sales in China, the world’s biggest car market, jumped 14% in 2013 to 21.98 million vehicles.

Sales in the US – the world’s second-biggest market – are also expected to have hit 15.6 million units last year – up from 10.4 million units 2009.

Analysts said that GM had been able to tap into the growth in both the emerging as well as developed economies, which had helped boost its recovery.

“They are doing exceedingly well in countries like China and India, as they have come with models that are better suited for developing markets,” Vivek Vaidya, an auto analyst with consulting firm Frost & Sullivan told the BBC.

Mr Vaidya added that a recovery in demand for pick-up trucks and similar vehicles in the US had also helped GM.

“They are currently winning on all fronts.” he said.