Profits at General Motors plunged by 58 per cent to $255 million in the fourth quarter of 2001 due to higher marketing costs and cuts in production as a result of the weakening US economy.
"Our performance in 2001 was quite strong considering all the challenges we faced, and we intend to continue building momentum throughout the coming year," GM chairman Mr Jack Smith said in a statement.
GM shares closed yesterday at $49.96 on the New York Stock Exchange. GM shares have outperformed those of its closest rival, Ford by about 55 per cent since September 11th.
GM said profits from its core North American automotive operations fell to $392 million in the fourth quarter from $979 million a year earlier.
The net price GM receives on the average sale of a vehicle in North America fell by 1.5 per cent in the fourth quarter, reflecting the high costs of the zero per cent financing program.
In addition, GM cut new vehicle production in North America by five per cent during the fourth quarter.
Due to the weaker results in 2001, GM said it will not issue profit-sharing payments to its hourly workers in the United States and will not pay annual incentive awards to GM executives.
GM's total sales and revenues in the fourth quarter rose to $45.95 billion from $45.00 billion in the same quarter a year ago.