Opel CEO affirms goal of posting a profit in Europe in 2016

STUTTGART (Reuters) -- Opel CEO Karl-Thomas Neumann affirmed that the European arm of General Motors will return to profit in 2016, as continued growth in southern or central Europe would help offset a slump in Russia sales.

GM is ending sales of Opel and mainstream Chevrolet cars in Russia and will idle its plant in St. Petersburg in response to plunging sales. Demand has been hit by economic sanctions and the weaker Russian currency.

"We can make up for that," Neumann told a congress in Stuttgart on Thursday. Sales in Germany, Spain, Portugal and Poland were ahead of expectations, helping to offset the drop in sales in Russia, he said.

GM has made a turnaround of its European business, where Opel CEOs have come and gone in rapid succession, a top priority after racking up some $18 billion in losses over a dozen years.

Neumann has said he wants to return Opel to profit by 2016 at the latest and to raise the business's operating return on sales to 5 percent by 2022, based on earnings before interest and tax (EBIT).

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