GM Europe President: Market Won't Return To Pre-Crisis Level Anytime Soon

General Motors Co.'s (GM) European division could reach break-even in 2011, excluding restructuring costs, if the sales improvement seen towards the end of last year continues, but demand for new cars in the region isn't expected to return to pre-crisis level in the forseeable future.

GM Europe president Nick Reilly told reporters at the North American International Auto Show the division needs a sales volume of around 1.3 million vehicles to operate profitably in this relatively low market.

He said sales came in just under 1.2 million vehicles last year, which is roughly flat compared to 2009. Reilly cited a difficult start into last year as reason for what he described as "a pretty average" year in 2010 in terms of sales, noting that sales and market share improved in most European countries towards the end of last year.

In 2009, GM skipped the sale of its European Opel and Vauxhall brands to Canadian auto parts maker Magna International Inc. (MGA, MG.T) and decided to finance the wide-ranging turnaround program itself. Reilly reiterated that restructuring costs last year were around EUR1 billion, but declined to comment on the anticipated costs to be booked this year.

GM Europe posted a $559 million loss in the third quarter last year and $1.2 billion loss in the January-to-September period, making it the firm's only money-losing region.

As part of GM's latest turnaround effort in Europe, Reilly plans to lift market share, ramping up exports and broadening the product line-up to lure new customers.

-By Christoph Rauwald, Dow Jones Newswires; [phone]; [e-mail]