GM eyes autonomous cars as urban growth opportunities
General Motors Co. views autonomous vehicles and ride-sharing services as potential growth opportunities in major cities, according to North America CFO John Stapleton.
“If you look at our market share, where we are the weakest, it’s in the big city areas,” he said during a presentation Wednesday at Citi’s 2016 Industrials Conference in Boston. “In one aspect, I could view this as an opportunity for General Motors to grow our market share in the cities with autonomous vehicles.”
Crowded urban environments are expected to be the most popular areas for autonomous vehicles and ride-sharing. GM has invested more than $1 billion this year in autonomous vehicle technologies as well as shared mobility services such as Lyft Inc., and has launched its own Maven ride-sharing service.
“We do feel that the car sharing is going to significantly increase in the future,” said Stapleton, adding not all vehicles entering its Maven fleet are new vehicles. He said some are coming off two-year leases or out of rental fleets. “It’s almost you get a double benefit in some ways. That’s how we’re running the Maven business right now.”
Many industry analysts see ride-sharing as a gateway for autonomous vehicles. However, some speculate that the emerging trends will hurt auto sales.
GM forecasts auto sales in the mid-17 million units in the United States for the foreseeable future, according to Stapleton. He said autonomous vehicles will take some time to catch on, despite the automaker expecting 75 percent of its global sales will be “actively connected” vehicles by 2020. GM sells vehicles equipped with 4GLTE Wi-Fi connections and OnStar services.
Stapleton said GM is in a “very good” place overall, as it lowers its dependency on selling to daily rental fleets and records record profit margins. He said GM “remains confident” that it can deliver a 10 percent profit margin in 2016. GM’s break-even for sales is 11 million globally, down from 16 million in 2007, according to Stapleton.
GM shares on the New York Stock Exchange were trading midday Wednesday up 1.14 percent to $29.16.