Automakers have been hit with a one-two punch in Europe due to flagging auto sales that have dropped off to their slowest pace since 1994 and a price war in the industry that has cut into already tight margins.
Still, not all overseas markets will cause automakers to bleed profits. Seymour said emerging markets, such as Brazil, China and India, “should be, not only for GM, but for all automakers the place to focus.”
But, the ongoing China economy slowdown theme could also play out in GM earnings later this week, says Seymour. He predicts the automaker will likely prove that China, especially the country’s luxury auto market, has been “very, very soft in the second quarter.”
“The outlook for the second half of the year is much better, but to think that GM has a straight run in China to glory is definitely not accurate at this point,” he said.
GM’s upcoming release follows Honda Motor’s earnings report, which fell shy of analysts’ forecasts on Tuesday. Still, the Japanese automaker posted profit that was eight times as high as last year, when the company was hit hard by an earthquake and a tsunami.
— Written by CNBC.com's Katie Little. Follow Katie Little on Twitter @katie_little.
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Tim Seymour owns shares of General Motors.