GM CEO sees U.S. auto market flattening, but room for growth

DETROIT (Reuters) - General Motors Co Chief Executive Officer Mary Barra said growth in the U.S. auto market will flatten out this year, although a strong economy and falling gasoline prices should sustain demand.

Barra, meeting with reporters on Thursday after a turbulent year dominated by a scandal over safety recalls, said she is "cautiously optimistic" about 2015. She cited strength in the United States and China, and said GM will have to adjust to weather "twists and turns" in other markets, including Europe.

Barra said she still expects GM Europe to achieve break-even performance in 2016, as she told investors last fall.

Barra said the No. 1 U.S. automaker expected industry sales in the world's second-largest auto market to finish at 16.5 million to 17 million vehicles, indicating flat to 3 percent growth. Barra said she expects 2015 U.S. sales will end "right in the middle of that range."

In China, GM's largest single market, Barra said GM's performance was "very, very strong" in 2014. GM improved sales in China by 12 percent in 2014 compared with the prior year, outpacing 7.5 percent expansion for the Chinese auto market overall.

The stronger U.S. dollar could be a challenge for GM "in certain circumstances," she said. "We have to work with the tools... and levers we have."

GM's strategy is to build vehicles "where we sell" to minimize the impact of currency shifts, she said. However, a weaker euro and Japanese yen could give a boost to European and Japanese automakers in competition with GM in the United States, China and other markets.

In the United States, which contributes the bulk of GM's profit, Barra said there was still room for growth because of the strong labor market, recovery in home prices and the recent drop in fuel prices.

U.S. industry sales rose about 6 percent last year to 16.5 million vehicles. [ID:nL1N0UK0HI] Coming out of the recession, U.S. industry sales grew from than 10 percent a year from 2010 through 2012 and about 8 percent in 2013. The industry last reached 17 million in annual sales in 2001.

Earlier this week, Toyota Motor Corp <7203.T> offered what it called a conservative 2015 U.S. sales forecast of 16.7 million vehicles. Ford Motor Co said it expected a range of 16.8 million to 17.5 million, including medium and heavy trucks, which typically account for 300,000 vehicles a year.

(Editing by Lisa Von Ahn and Matthew Lewis)

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