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GM challenges Tesla

General Motors Co plans to launch a series of electric vehicles in 2021 that will cost less to develop and build, and will furthermore, make a profit for the U.S. No. 1 automaker, Chief Executive Mary Barra told investors earlier this week.

Mary Barra at the 2017 GM Annual Stockholders Meeting

Her plans demonstrate an aggressive electrification strategy and direct challenge to electric vehicle specialist Tesla Inc, which is struggling to get its more affordable Model 3 launched.

“We are committed to a future electric vehicle portfolio that will be profitable,” Barra said at the Barclays Global Automotive Conference in New York.

Electric and autonomous vehicles will underpin the future of transport; however, Tesla and other manufacturers are still trying to understand how to gain a profit from them.

GM is looking to break through this by creating an all-new electric vehicle family that will accommodate multiple sizes and variations, to be sold by different GM brands in the United States and China, Barra said.

GM’s cost reduction efforts on electric vehicles revolve around the creation of a cheaper new battery system.

By 2021 the company aims to make its lithium-ion batteries less than $100 per kilowatt-hour, instead of the current $145 per kilowatt-hour battery. This would bring the overall cost of electric vehicles closer to gasoline-engine equivalents.

GM announced that the batteries would be able to hold more energy and charge quicker. With the aim to boost the kilometre range to more than 483 km with the new batteries.

GM’s new electric vehicle platform will act as a base for at least nine derivatives, ranging from a compact crossover to a large seven-passenger luxury sports utility vehicle and a large commercial van.

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Canadian workers strike against GM

A tentative agreement has been made with striking workers at the CAMI assembly plant in Ingersoll, Canada, according to a statement from vehicle manufacturer General Motors.

Some 2,500 workers at the plant in southern Ontario, walked off the job on September 18, after the automaker decided that the factory would not be delegated as the lead production site for the Chevrolet Equinox model in North America.

“These members have shown incredible courage and strength by standing up for good jobs and a secure future for their families and their community,” says Jerry Dias, president of Unifor National.

The automaker had threatened to ramp up the production of the SUVs at two plants in Mexico.

The assembly plant strike is Canada’s first since 1996.

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GM to increase focus on EVs

General Motors has said it will combine operations outside of China and North America into a new organization based in Detroit, in an attempt to further scale back its operations that are losing money, and increase their presence in the EV market.

Automotive News reports that GM said it will combine the leadership of its Southeast Asia, India and Oceania operations, with its South American operations, effective January 1 next year. The new company will be led by Barry Engle, currently GM executive vice president and president of GM South America.

GM CEO Mary Barra.

On Monday GM outlined plans to add 20 new battery electric and fuel cell vehicles to its global lineup by 2023, financed by robust profits from sales of gasoline-fueled trucks and sport utility vehicles in the United States and China.

GM’s Latin American and Asia/Pacific operations both lost money in 2016, excluding profits from GM’s operations in China.

“Our strategy (is) to refocus our traditional business operations to free up the resources and financial power needed to really step into the next chapter of the automotive industry,” Stefan Jacoby, executive vice president of GM’s International Operations told Reuters.

GM has shrunk its international operations over the past five years, ceasing manufacturing in Australia and Indonesia entirely, while restructuring its Thai operations. The car maker is also reducing its presence in India.

GM has also sold its European unit Opel, to French automaker Peugeot SA.

 

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Ford, GM defy September predictions in United States

General Motors and Ford have exceeded analysts’ expectations in the United States with increased share prices and sales for the month of September.

General Motors chief economist Mustafa Mohatarem said all the key US economic indicators point toward continued economic growth and stability, while in addition, regions devastated by the recent hurricanes will continue to recover, helping spur new and used vehicle sales.

Reuters reports that the seasonally adjusted annualized rate of U.S. car and light truck sales in September rose to 18.57 million units from 17.72 million units a year earlier, according to Autodata Corp, which tracks industry sales.

According to car makers and dealers, much of the September gains follow the devastating hurricanes that have swept the southern part of the country. Replacing cars will boost U.S. new and used auto sales through at least November, according to industry consultants.

Shares of General Motors rose, up 2.7 per cent yesterday, while those of Ford gained 1.8 per cent, after both car makers reported better than expected sales for September.

 

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Holden launches Aussie ride-sharing trial

General Motors has announced over the weekend that it will test its car-sharing operation, Maven, in Australia in conjunction with Uber.

“We are testing the adoption of one Maven product – Maven Gig – in Australia through a pilot program in Sydney renting Holden cars to Uber drivers,” communications director at GM Holden, Sean Poppitt, said in a statement.

In March, GM began an in-house car-sharing scheme in Melbourne for employees who needed to use a vehicle for a short period of time, or who wanted to test different models in the Holden line-up.

Maven Gig is a GM programme which allows drivers to rent vehicles on demand for one-off jobs such as deliveries and ride-sharing.

In the US, drivers can borrow a Chevy Bolt for $311 per week. It’s not known which Holden model is being used in the Sydney pilot.

Currently, the firm operates in San Diego, and in May, GM said it would launch Maven in San Francisco and Los Angeles later this year.

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Opel CEO resigns

Opel CEO Michael Lohscheller

Opel is losing its CEO just two months after being sold by General Motors to the PSA Group.

Karl-Thomas Neumann resigned on Monday, and Reuters reports that Volkswagen is rehiring the executive, who formerly worked as a division manager.

“The prospects are good that he will move to Volkswagen,” said Bankhaus Metzler analyst Juergen Pieper. “He’s one of Germany’s most distinguished car managers and VW is in great need for excellent people.”

“Under Neumann’s leadership we have made enormous progress in turning around Opel,” said GM president Dan Ammann. Neumann, who took the reins in 2013, is credited for turning around Opel’s fortunes and restoring its image and reputation. The next CEO will be current finance chief Michael Lohscheller.

GM announced the sale of struggling car maker to the PSA Group for $3.3 billion in March 2017. The deal was reached on the condition that Opel reach an ambitious two per cent operating margin in 2020, up to six per cent by 2026.

The sale of Opel includes the British-made Vauxhall marque. While Opel currently manufactures the GM-owned Holden Commodore and Astra, the Australian brand was not part of the sale, and  existing supply agreements will continue.

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US car sales mixed in May

General Motors reported a decline in sales for May, down one per cent to 237,364 units. Sales of the GMC Sierra ute fell 8.2 per cent to 16,200 and sales of the GMC Canyon were down 26.3 per cent to 2,477 units.

US sales also dropped one per cent for Fiat Chrysler, down to 193,040 units, with Jeep sales down 15 per cent.

Ford, however, reported an increase in sales, up 2.3 per cent to 240,050 units, with its F-Series ute up 12.8 per cent.

Sales were mixed for the Japanese car makers. Toyota saw a 0.5 per cent drop to 218,248 units, driven by a 17.3 per cent decrease in Toyota and Lexus-branded cars.

But Nissan reported a three per cent sales increase in may to 137,471 units, which the car maker attributed to rising demand for crossovers and SUVs. Sales for Honda grew 0.9 per cent to 148,414 vehicles.

Sales have typically been strong for SUVs on the back of low oil prices and growing economic optimism. In April, however, the segment fell for the first time in 11 months, and remained soft in May.

The Wall Street Journal reports that seasonally-adjusted annual sales in the US ending May 2017 is expected to fall to approximately 16.5 million, well down on the 17.3 million sales in the year ending May 2016.

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Venezuela authorities seize GM plant

General Motors has immediately ceased its operations in Venezuela after a judicial seizure of its assets on Wednesday.

Local authorities took control of the plant, which was established in 1948, and seized company assets, including vehicles, the car maker said in a statement.

The seizure, dubbed illegal by General Motors, follows a week of heavy protests in Venezuela. Falling oil prices, the country’s main export and backbone of its economy, has brought in a heavy and ongoing economic recession.

According to General Motors, their Venezuelan division employs 2,678 factory operators and oversees 79 dealers, with a service network of over 3,900 further workers.

General Motors will ensure that separation benefits to employees will be paid “as far as the authorities permit”, and plans to undertake further legal action within and outside of Venezuela.

Dealers will continue to provide aftermarket services and parts for local customers.

The car industry in Venezuela has recently plummeted, following a lack of raw materials due to stagnant local production and widespread economic depression, and Reuters says many plants are barely producing at all.

Ford has already abandoned its interest in Venezuela. In 2015, the car maker wrote off all investments and undertook an $800 million pre-tax writedown.

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Tesla briefly most valuable US car maker

Tesla briefly surpassed General Motors overnight to become America’s most valuable car maker, based on market capitalisation. This comes after Tesla eclipsed Ford last week to take the number-two spot.

Shares in Tesla jumped 3.7 per cent this morning following a stock upgrade by analysts and predictors. 

At its highest point of (US)$313.73, the company was worth $73.45 billion, fractionally higher than General Motors’ capitalisation of $73.43 billion.

Tesla’s high stock price, considering its production numbers and past profits, has ignited debate that the electric car maker is overvalued.

GM is expected to earn $12.9 billion in profit this year, and according to Reuters, Ford is predicted to turn over $9.05 billion in profit.

Comparatively, Tesla is expected to lose over $1.37 billion.

GM also sold over 10 million cars to customers around the world last year, while Tesla delivered just under 80,000 vehicles, with the order books full and the entry-level Model 3 scheduled to roll out in late 2017.

“Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate,” Piper Jaffray analyst Alexander Potter said in a statement after his firm upgraded their stock forecast.

Ford president Joe Hinrichs seemed less convinced of the value of optimism when speaking to reporters overnight. “Cashflow should determine what the value of a company is and our cash flow has been pretty good lately,” he said. At the end of the day, we run the business to serve our customers.”

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France closes Opel investigation

French regulator DGCCRF closed its investigation into diesel emissions by Opel cars overnight and said it would take no further action against General Motors.

The probe “did not bring to light any evidence of fraud,” the government bureau said in a statement.

Questions around Opel (and its British counterpart Vauxhall) have been swirling since the Volkswagen scandal first broke in September 2015. In October 2015, German environmental group Deutsche Umwelthilfe claimed that testing showed the 1.6-litre diesel Opel Zafira exceeded 2014 EU emissions thresholds under certain circumstances.

The following May, a joint investigation between Der Spiegel and German news programme monitor suggested a number of Zafira and Insignia diesel models to contain devices that would deactivate filtration systems.

The German transport ministry demanded answers from General Motors and Opel, who vehemently denied any wrongdoing. In response, Opel published a lengthy report explaining how and why the software uncovered by the investigation was technically legal under EU emissions regulations.

Last month, Opel was sold to PSA Group, which includes the Citroen and Peugeot marques, as GM sought to extricate itself from its struggling European holdings.

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FCA merger snubbed by GM, VW

Fiat Chrysler CEO Sergio Marchionne’s attempts to discuss a merger with larger car makers have been rebuffed by both VW and GM in the wake of PSA’s acquisition of Opel.

On Tuesday, Marchionne said the sale would create pressure on VW, which could prompt the German car maker to sit down with Fiat Chrysler.

VW CEO Matthias Mueller dismissed the claim at the Geneva Auto Show, telling Reuters that the company was too busy with the fallout of the emissions scandal. “We’re not ready for talks about anything,” Mueller said. “We have other problems.”

The German inquiry into the VW emissions scandal is in its final days, with German chancellor Angela Merkel set to testify amid controversy over her close relationship with former CEO Martin Winterkorn and ongoing friction with US environmental authorities.

Marchionne has been a long-term advocate for mergers between car makers, which would share the costs of research and development in the effort to produce cleaner, more technologically advanced vehicles.

“You need to achieve scale or we will end up delivering an incredibly poor return and margins on this business. We need to fix this,” he said.

Mueller’s rejection of a merger follows a similar dismissal from GM, after Marchionne said the American car maker was his preferred choice.

“We weren’t interested before, and we’re even less interested now,” GM President Dan Ammann told reporters in Geneva.

Fiat Chrysler lags behind other car makers in Europe, with a market share of seven per cent and an operating margin of 2.5, below most of its rivals.

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