General Motors’ (GM) board has approved a 25% increase in common stock dividend, and a new $6bn share repurchase programme.

The automotive giant revealed that the dividend hike would commence with the next planned dividend in April 2025.

GM chair and CEO Mary Barra said: “The GM team’s execution continues to be strong across all three pillars of our capital allocation strategy, which are to reinvest in the business for profitable growth, maintain a strong investment grade balance sheet, and return capital to our shareholders.

“We are growing our business thanks to our broad, deep, and compelling portfolio of ICE vehicles and EVs. At the same time, we are investing our capital in a disciplined and consistent way to continue generating strong margins and cash flows.”

The new quarterly dividend rate of $0.15 per share marks rise of $0.03 rise from the previous quarterly dividend.

GM executive vice-president and CFO Paul Jacobson said: “We feel confident in our business plan, our balance sheet remains strong, and we will be agile if we need to respond to changes in public policy.

“The repurchase authorisation our board approved continues a commitment to our capital allocation policy.” 

With no expiration date, the share repurchase programme will be carried out in compliance with relevant securities laws and may be halted or terminated at the company’s discretion, the company said.

GM has also initiated a $2bn accelerated share repurchase (ASR) programme to expedite the buyback process.

Barclays and J.P. Morgan will execute the ASR programme, which is expected to conclude in the second quarter of 2025.

The total number of shares repurchased will be determined upon final settlement, based on the average daily volume-weighted prices of GM’s common stock during the programme’s term.

The company’s capital expenditure for 2025 is anticipated to range between $10bn and $11bn, inclusive of investments in battery cell manufacturing joint ventures.

Research and product development spending is projected to exceed $8bn.

With the ASR programme in place, GM will still have $4.3bn capacity available for additional share repurchases.

As of 31 December 2024, the company’s total shares outstanding were under one billion, with a weighted average of 1.055bn shares for 2024.

Recently, it was reported that GM decided to close its Shenyang plant in northeastern China, manufacturing Buick GL8 minivans and Chevrolet Tracker SUVs.

This move is part of a broader restructuring in China, where GM faces stiff competition from local manufacturers bolstered by government subsidies.