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Despite Pandemic, GM Optimistic Of Demand In US And China And EV Profitability


06/16/2020


Despite Pandemic, GM Optimistic Of Demand In US And China And EV Profitability
A very positive note about the demand for new vehicles in the United States despite the raging novel coronavirus pandemic by the top executive of the US auto giant General Motors Co on Monday. The company also expressed its confidence of selling electric vehicles at a profit – particularly in the Chinese market.
 
Chief Executive Officer of the company Mary Barra, talking about the demand for new vehicles n the US said: "We're cautiously optimistic". This was said by while talking at a  virtual press event hosted by the Automotive Press Association.
 
"We're hopeful that we'll have a recovery because that's good for everybody," she added.
 
It has been more than two months that auto companies n the US have been forced to shut down their lants in the country because of the spread of Covid-19, the disease caused by the novel coronavirus. This has resulted into limited inventory for US auto dealers – specifically for in the stable of the high-margin pickup truck, a segment that is grossly dominated in the US market by GM, Ford Motor Co and Fiat Chrysler Automobiles NV.
 
It is expected that GM will be "running full out" at plants that make those popular vehicles "in the near term,” Barra said.
 
A sort of "profit desert" is being faced by all of the major global auto makers because the companies have been investing heavily in development of electric cars even as the ongoing preference of consumers is for gas powered vehicles, particularly in the US market, predicted Consultancy AlixPartners.
 
When she was asked to respond to this prediction, Barra said, "We are very excited with the portfolio of EVs we have coming. We are going to continue on that path," she said. "We have a strong future ahead and I don't see that desert."
 
There was a 14.5 per cent growth in the auto sales in May in the Chinese market compared to the same period a year ago, according to data from industry sources. That marked the second straight month of growth in sale of new vehicles in the market which is the largest vehicle market in the world as it seems to be recovering from the lows that the market hit because of the Covid-19 induced lockdown.
 
GM is already strategically positioned for sustained growth in the Chinese market because of the company’s lineup of vehicles, including its upcoming EV models, Barra said.
 
"I think we're going to be in a sweet spot where there is a growth opportunity in that market," she said. "We're looking for profit and volume growth in China."
 
(Source:www.channelnewsasia.com)