This Accounting Move Could Boost General Motors' Profits

The Chevrolet Cruze is General Motors' best-seller in Russia, and one of Russia's top-10-selling cars. In addition to the familiar sedan, Russian buyers can get a Cruze station wagon, or a hatchback like this one. Photo credit: General Motors.

General Motors  has had massive success in China, but it hasn't yet been able to duplicate that feat in Russia. Russians aren't yet buying cars with anything like the fervor of their Chinese neighbors, but GM has managed to stake out a solid position that should pay off once the Russian new-vehicle market starts to grow.

For a long time, GM considered Russia to be part of its Asian operation. But now it's moving Russia to Europe: Starting in January, GM's Russian sales -- and profits -- will be counted as part of its European business. 

GM has been struggling to end years of losses in Europe, and investors have watched carefully for signs of progress in the region. This move should help with Europe's turnaround -- but is it just an accounting trick? In this video, Fool contributor John Rosevear explains why this move makes sense -- and how it could boost GM's stock price over the next couple of years.

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Fool contributor John Rosevear owns shares of Ford and General Motors. You can connect with him on Twitter at @jrosevear. The Motley Fool recommends Ford and General Motors and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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