GM: Strategies for the future of mobility
Investing in autonomous vehicles and ride-sharing services
2016/07/04
- Summary
- Investment in advanced technologies to shape the future of personal mobility
- GM’s sales performance: European sales outperform industry growth in first quarter of 2016
- GM’s Q1 2016 performance: net income reaches USD 2 billion, breaking even in Europe
- New model launch plans in North America
- New growth strategy for China (2016-2020)
- GM restructures operations in Thailand and Indonesia; downsizes business in Russia
- Partnership with Honda for FCVs; collaborating with Isuzu for light truck supply
- Recall issue: compensation investigations completed; Government requires USD 900 million penalty
- Production forecast by LMC Automotive: GM’s global production to reach 8.35 million units in 2019
Summary
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 2017 GMC Acadia (North American International Auto Show 2016) |
With the dust settling on its recall issues, GM reported improved profits in 2015, and has maintained strong results in the first quarter of 2016. The continued success of its core automotive business is enabling the automaker to invest in advanced technology and innovations that will help shape the future of personal mobility.
The fields that are important for leading this transformation include connectivity, autonomous driving, car-sharing and electrification. In 2016, GM launched a new car-sharing service under its own brand, and entered into a strategic alliance with the ride-sharing company Lyft. Moreover, GM revealed a plan to acquire Cruise Automation which is developing autonomous vehicle technology.
GM’s 2015 global unit sales increased by 0.3% year-over-year (y/y) to 9.96 million units, marking a record high for the third consecutive year. Strong sales of pickups and SUVs in North America and high demand for luxury cars and SUVs in China offset stagnant sales in South America and Russia. While revenue fell by 2.3% y/y, adjusted EBIT (earnings before interest and tax) increased from USD 6.5 billion the previous year to USD 10.8 billion and net income grew from USD 2.8 billion to USD 9.7 billion. Both adjusted EBIT and net income hit record highs. While unit sales decreased by 1% in the first quarter of 2016, the company maintained strong results as revenue increased by 4.3%, and adjusted EBIT-adjusted and net income improved significantly compared to the first quarter of 2015.
GM expects that its results will improve in 2016 driven by significant vehicle launches, improved efficiency in core operations, and a continued emphasis on growing its adjacent businesses. The adjusted EBIT for the year is expected to improve, and adjusted earnings per share (EPS) is projected to be USD 5.25-5.75 compared to USD 5.02 in 2015.
Related report
North American International Auto Show 2016: U.S. OEMs (Feb. 2016)
Beijing Motor Show 2016 (Part 1) European OEMs: Automakers Strengthen China-Exclusive Model Lineups (May 2016)
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