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Non-Tech
General Motors -- GM
An SI Board Since March 2018
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5 4 0 GM
Emcee:  KyleLenn Type:  Moderated
How General Motors performed in 2017 and will perform in future?

Full-year 2017 record:

From General Motors, it showed that GM Financial EBT-adjusted of $1.2 billion, up 50 percent and revenues of $12.2 billion, up $3,2 billion.

Expectation -- opinions below from Finstead:

Positive:

1. For 2018, the company projects robust earnings, mainly on the back of strength in North America, China and South America, growth in GM Financial segment, and continued cost efficiencies.

2. The automaker strives to excel in its products and technology, expand the Chevrolet and Cadillac brands globally, grow its presence in China and boost the results of the GM Financial segment. Further, General Motors will focus on ensuring cost efficiency and expects to reduce costs by over $5.5 billion by curtailing purchasing, manufacturing and administration expenses from 2015 through 2018. This will offset the investments made toward the launch of new products, brand building, engineering and technology upgrades.

3. General Motors is increasing capacity investment in emerging markets to enhance its global sales. The company expects half of the global sales growth by 2030 to come from emerging markets. The company is trying to gain from growth in emerging countries via product launches and the new Wuling plant.

4. In October 2017, General Motors announced its plans to stop manufacturing gasoline and diesel in future and focus more on the development of electric vehicles. In line with the plan, it expects to roll out two new electric vehicles (EVs) in the next 18 months. In addition to that, General Motors will be adding 20 electric or hydrogen fuel cell vehicles in the market by 2023.

Negative:

1. The U.S. auto market is becoming more crowded each year. Hyundai, Tesla, and other firms may take more share over time from existing players such as GM.

2. General Motors has been forced to scale down or shut its manufacturing operations in some regions due to production constraints such as high costs and unfavorable currency translation effects. General Motors decided to stop vehicle and engine production, and cut down engineering operations in Australia by 2017 end due to the strength of the Australian dollar against the American dollar, high production costs, limited domestic market and stiff competition.

3. Low oil prices and currency controls in Venezuela have led to a deficiency of the dollar in the South American nation. As a result, the market remains quite challenging for General Motors.

4. The company is expected to face weak used car pricing, a challenging pricing environment in the United States and China as well as more pressure on commodity costs.

How do you think?

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