GM to concentrate resources on growth opportunities in North America and China
Developing autonomous driving technologies and ride-sharing services
In March 2017 PSA reached an agreement with GM to acquire the U.S. automaker's European operations (Opel/Vauxhall). GM also disclosed its plans to restructure international markets in May of the same year. It decided to cease sales of Chevrolet vehicles in India as well as manufacturing and sales in South Africa. By exiting from these unprofitable markets, GM will be able to focus its resources on growth opportunities in North America and China to drive stronger financial performance.
GM is pursuing development of autonomous driving technologies and ride-sharing services to lead the future of personal mobility. The automaker plans to make a new investment in its Cruise Automation subsidiary that is developing self-driving technologies and contribute to Nauto, a start-up company that uses artificial intelligence (AI) for developing self-driving assistance technologies. In addition, GM and Lyft, a leading ride-sharing company, are expanding their vehicle access program for potential ride-sharing service drivers.
GM's global vehicle sales for the first half of 2017 amounted to 4.69 million units, down 1.7% year-over-year (y/y). Sales in North America fell by 0.8% as GM strategically reduced less profitable daily rental sales while deliveries of SUVs increased. Volumes grew by 14.5% in South America, but sales in China and other regions decreased by 4.0%. The OEM recorded increased revenue and earnings before interest and taxes (EBIT) while net income declined by 11.4% to USD 4.3 billion. The drop in net income was primarily caused by short-term factors including the end of sales in India and transfer of operations in South Africa to Isuzu.
In July 2017 GM forecast that its 2017 earnings per share (EPS) will be USD 6.00-6.50 (USD 6.12 in 2016) owing to successful operations in North America and China, growth of financial businesses, and continuous efforts to reduce costs.
|2018 Chevrolet Traverse (Photo: GM)|
PSA: Acquisition of Opel from GM boosts PSA to second place in the European market (May 2017)
LMCA Client Alert: Analysis of the proposed acquisition of Opel by PSA (Feb. 2017)
North American International Auto Show 2017: U.S. OEMs (Feb. 2017)
U.S. OEMs expanding use of front pedestrian braking on new models (Aug. 2016)
GM: Strategies for the future of mobility (Jun. 2016)