MILFORD, MI – The backbone of General Motors’ business is in North America, but company officials say they expect the global marketplace to play a crucial role in the coming decade, despite recent softening in the Chinese market and struggles in Europe.
Matt Tsien, president-GM China, says the Chinese market is “maturing,” but he predicts growth of 3%-5% annually industrywide, equaling about 1 million additional sales per year, through 2020. GM will focus on less-mature regions of the country where big growth is expected, will diversify product away from core sedans by adding SUVs, MPVs and luxury offerings, will increase financing opportunities and will offer alternative propulsion vehicles. GM plans 10 new products for China by 2020, Tsien says.
A key initiative is the introduction of the Cadillac CT6, with Super Cruise autonomous-driving technology, vehicle-to-vehicle communication and plug-in hybrid electric vehicle capability, says Johan de Nysschen, Cadillac president. Tsien notes the China-built CT6 PHEV will have a 31-mile (50-km) range and 100 mpg fuel-economy rating (2.2L/100 km).
In Europe, the all-new Opel Astra is leading GM’s “strongest product pipeline ever,” says Opel Group CEO Karl-Thomas Neumann, leading to a return to profitability for GM in Europe in 2016. Adding OnStar across product lines will improve customer relationships, further growing the business by putting more than 1 million connected vehicles on the road in Europe by the end of 2017, he says.
Finally, while GM’s share in the North American market is off by 0.1 percentage point through July at 17.3%, Alan Batey, president-GM North America, says the numbers reflect a successful focus on profitability by cutting fleet sales by three percentage points while gaining 0.4 percentage point in the retail marketplace. GM tells investors it expects a 10% profit margin going forward.
“In North America, clearly we are seizing the strong market and using it to build our retail business,” says Mary Barra, GM CEO.
Q & A: GM Leadership
Following the daylong briefing for investment analysts, GM executives fielded questions from analysts and journalists. A few highlights:
- Mark Reuss, executive vice president and head of global product development, purchasing and supply chain, addresses the remaining technical challenges in the way of putting autonomous vehicles on the road. “The biggest challenge is, No.1, working with regulatory bodies to create the protocol for V2V (vehicle-to-vehicle) communication. Then, how does an autonomous vehicle deal with changing situations that require a decision? The mapping part of this is key, but then how do you deal with a changing environment? The holy grail of this is a knowledge-based system in which the car can learn based on the environment and changes in that environment. That’s the greatest challenge.”
- Does autonomous mobility have better chances in certain vehicles and in certain regions? Any vehicle featuring alternative propulsion is a good candidate for autonomous technology, Reuss says, and a lot of more-mature cities that need better mass-transit but don’t have the funds to invest in large transit projects will be early adopters. GM President Dan Amman adds that regions with low car-ownership likely will be early adopters.
- When will GM’s market share begin to grow again? Amman notes the company’s market penetration growth has been meteoric in China and is up in Europe. Also gaining, he notes, is GM’s retail share in the U.S.
- Has GM asked any former Volkswagen employees now on the GM payroll to provide insight into the VW emissions situation? Barra says that while GM has a number of employees from other industries and from VW, she considers them all “high integrity people. Beyond that, I’m not going to comment.”
