General Motors’ first-quarter earnings shrank almost 90 per cent, with improved automotive operating profits more than offset by heavy subprime mortgage losses at GMAC, the financial services group in which the carmaker has a 49 per cent stake.

Rick Wagoner, GM chief executive, described the quarter as one of “continued progress” in the group’s turnround plan. However, the earnings fell well short of analysts’ expectations and the shares ended the day 5.3 per cent lower at $30.70.