GM says new models will account for 30% of sales by 2007

The carmaker, which made a $3.8bn first quarter loss amid falling US sales, said it was making "rapid" progress on a plan to cut annual costs by $6bn.

Looking further forward, GM said it expected costs as a share of revenues to fall dramatically by 2010.

The US car giant has faltered in the face of fierce competition from Asian rivals and changing consumer tastes.

GM is depending on new models to boost performance, with new cars and trucks accounting for 30% of sales by 2007.

Cost focus

Some analysts have warned that GM could face the threat of bankruptcy unless it brings its costs under control and reduces recent heavy losses.

Everyone at GM is focused on executing our plan to realize the structural and material cost reductions this year Rick Wagoner, GM general executive

GM reached a landmark agreement with unions last year to cap healthcare costs and other benefits, saving it $1bn a year.

Chief executive Rick Wagoner said GM was making good progress on reducing its costs.

"Everyone at GM is focused on executing our plan to realize the structural and material cost reductions this year and achieve additional cost reductions in 2007," he said, ahead of an analyst meeting.

GM was aiming to reduce costs as a share of revenue to 25% by 2010 from 34% currently, Mr Wagoner added.

Improvement expected

This could be achieved by developing more cars outside the US, harmonising technical platforms and reducing staff-related liabilities.

"This would significantly enhance GM's earnings power and financial flexibility and reduce our business risk," he stressed.

Mr Wagoner said he expected to see an improvement in the financial position of GM's US business this year.

However, he said GM would not be issuing any financial forecasts.

This was due to uncertainty about the timing of the healthcare agreement and potential liabilities relating to the collapse of parts supplier Delphi, in which GM is a shareholder.