Steps to deal with slowing industry sales
General Motors (GM) has the highest market share in the US retail vehicle segment, which also reduces its risk profile. However, any possible downturn in the US auto market (FXD) could significantly affect the company’s business going forward.
During its second quarter earnings event, investors can expect GM’s management to highlight how it plans to deal with a downturn in the US auto sales.
Last year, GM accelerated its plans to explore other business areas such as ride-sharing and on-demand mobility services. While the revenues from these new businesses can’t be a replacement of the company’s primary revenue source, they may yield robust returns in the medium to long term.
What else to watch for
In December 2016, General Motors started delivering its all-electric vehicle (or EV), the Chevrolet Bolt, to customers. The Bolt was priced at $37,500, excluding government incentives, and it has a range of about 238 miles.
GM’s Chevrolet Bolt EV and Tesla’s (TSLA) Model 3 both are similarly priced mass-targeted EVs. Tesla has already announced its plan to begin the initial production of Model 3 in July. To compete with Tesla’s Model 3, GM could soon announce its next plan in the EV segment. Therefore, GM might update investors about its future plans in the EV segment during its 2Q17 earnings event.
Also, investors can expect an update on GM’s autonomous vehicles development program.
Auto companies such as GM, Ford (F), and Fiat Chrysler (FCAU) have accelerated their autonomous vehicle development programs in the last year. Please read Autonomous Vehicles: Latest Updates in 2017 to learn more.
Continue to the next part to learn how General Motors’ valuation multiples look before its 2Q17 earnings release.