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Europe proves thorn in GM's side as profits tumble

General Motors has reported a 74% drop in second quarter profits, caused by lower US vehicle sales and losses from overseas operations, with Europe proving one of its toughest markets.

Profits from GM's North American vehicle business were more than halved to $521m, compared to $1.41bn in the second quarter a year ago.

New cars sales in its domestic market were down 12%.

But the company has been implementing measures to compensate for falling demand, by taking steps to cut its US production by 13% and cutting stock build-up.

GM's operations outside of the US racked up losses of $111m, excluding the $133m charge for the restructuring of its Japanese affiliate Isuzu Motors.

The European business performed worst of all, losing $154m in the second quarter compared to a profit of $166m during the same three months a year earlier.

The company management said that the results were considered to be healthy considering the tough market conditions.

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