Yahoo Finance Ford and General Motors Look at the Industry’s Future
Key Takeaways from General Motors’ Global Business Conference
Industry future
As discussed in the previous part, automotive companies are facing a new set of challenges from autonomous driving, car sharing, and electric vehicles. In its global business conference, Mary T. Barra, General Motors’ CEO, noted, “Those facts are the realities of today. Some may find it daunting, but we look at it and see real opportunity.”
General Motors (GM) plans to launch its all-electric model Bolt in 2017. The car, which may be priced around $30,000 after federal incentives, is estimated to have a 200-mile range. The Bolt would compete with the Tesla Model 3, and the above chart shows how the GM Bolt compares with the Tesla Model 3. Currently, GM forms 0.55% of the iShares Russell 1000 Value ETF (IWD).
Competition
However, not all of the players in the automotive industry seem to perceive much of a threat from these evolving technologies. We don’t hear much from other leading companies, including Ford (F), on these evolving designs.
In its 2Q15 earnings conference call, Ford’s response to whether it sees Uber, Apple and Google as potential competitors was, “We’re always looking at the business environment and we’re seeing folks like Uber, who knows what Apple is going to do or Google is going to do.” However, the company did acknowledge that some of these companies could be its competitors in the future.
Electric vehicles
Fiat Chrysler (FCAU) does not seem overly excited by electric vehicles. According to a Reuters report, Sergio Marchionne, Fiat’s CEO, spoke at the Brookings Institution in May 2014 and seemed to discourage customers from buying the Fiat 500e electric car. Marchionne noted, “I hope you don’t buy it because every time I sell one it costs me $14, 000.”
On the other hand, Tesla (TSLA) sees electric vehicles as the future of the global automotive industry. Elon Musk, Tesla’s CEO, feels Tesla’s sales could grow at a CAGR (compounded annual growth rate) of 50% over the next ten years.
Before we explore what GM is doing to prepare for the future of its industry, let’s look at how the company is managing its traditional business. In the next few parts of this series, we’ll see how GM is playing the mainstream automotive market.
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