GM CEO: Company plans new models, more sales in China

General Motors CEO Mary Barra told investors yesterday that GM plans a raft of new models and a big push to sell more cars in China to drive profits in coming years, as the biggest U.S. automaker tries to shift the spotlight from a mishandled recall of older small cars.

Barra needed to reassure investors that GM has a strong plan going forward. The stock has dropped about 18 percent this year. Yesterday, it rose 1.7 percent to close at $32.49.

GM recalled 2.6 million small cars worldwide earlier this year to fix faulty ignition switches that are now blamed for at least 23 deaths nationwide. Barra said suppliers have built all the replacement switches, but only about 1.2 million small cars have had the repairs so far.

GM has admitted knowing about the problem for a decade, but only recalled the cars this year. The switches can cause the engine to stall, deactivating the air bags.

Barra said GM still expects to pay out $400 million to $600 million to compensate ignition switch crash victims. The company has hired compensation expert Kenneth Feinberg to pay victims.

The plan Barra outlined yesterday emphasizes growth in China. GM plans to invest $14 billion through 2018, including five new assembly plants to support estimated sales of about 5 million per year. Last year the company sold nearly 3.2 million vehicles in China, compared with 2.8 million in the U.S.

GM hopes Chinese car buyers embrace Cadillac, the luxury brand that has struggled in the U.S. despite earning numerous awards.

GM expects China to become the world's largest luxury car market later this decade, and plans to introduce nine new Cadillacs there over the next five years.

New models also figure prominently in GM's strategy. The company said it expects 27 percent of its global sales to come from new or freshened models next year. That figure rises to 47 percent by 2019 as it accelerates new model rollouts.