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  1. #1

    Default The Incredible Shrinking General Motors

    While we're enjoying record profits and record auto sales in the United States thanks to low gas prices and low interest rates, what concerns me in the long term is what's happening at GM.

    Just within the past 2 years, GM has exited:

    *Australia
    *Europe
    *Russia

    And there's now discussion about exiting Korea and South America.

    Mary Barra and Co. seems to be hell bent on cutting and running from most of their International Markets, to the point where soon it will only have operations in North America and China. This is a significant fall from grace of what was once the largest automaker in the world for decades.

    Something fishy's going on, but I can't put my finger on it. There has never been a company the size of GM successfully shrink its way to growth, and the few instances when other companies attempted to follow the same strategy simply to appease Wall Street (I.E. Hewlett-Packard and McDonnell Douglas), they all ended up failing and eventually being liquidated, split-up or phased out of existence.

    Given that Mary Barra and Co. doesn't seem to be overly concerned with scale or market share, what is GM going to do when the boom in China eventually comes to an end or another severe recession hits the US? Will it be bankruptcy 2.0 (and actual liquidation this time around)?

    http://www.autonews.com/article/2017...e-shrinking-gm

    http://www.businesskorea.co.kr/engli...presence-korea

  2. #2

    Default

    Are they profiting in the markets they are exiting?

    If they're unable to make a profit, it may make sense to scale back and concentrate on markets they understand better.

  3. #3

    Default

    Ford is doing the same thing. Concentrating on profitable, emerging markets like China, India, and of course North America. South America and Europe, including Russia, are just not profitable for them currently. They may be pulling out now for the foreseeable future, but I wouldn't be surprised to see them in those markets again someday.

  4. Default

    The other big thing GM is going through is re-aligning/imaging itself as a 'mobility company' vs. an automaker. Other companies are gravitating in the same direction. The game is about how many miles you move people, rather than how many cars you sell. Its about riders not drivers.

    A revolution in transportation has taken place [it just hasn't fully hit yet] and motor vehicles are becoming computers with wheels. Advances in robotics, ride-sharing apps and internet connectivity will equate to fewer personal cars.

    When I think of my situation with my wife, in the coming world do we really need two cars that sit idle probably 95% of the time? If I have quick access to a ride shared vehicle, human or robot driven, the savings become very attractive.

    As for GM ditching Europe, it makes sense. Opel has been a loser and drag on their bottom line for a long time. Better to sell and put the money in the new directions - mobility and clean energy transportation.

  5. #5

    Default

    I wonder if developers might start to shy away from making parking structures, as their long term use may be in question. Imagine a new downtown (not just Detroit, but anywhere) where far less space is dedicated to the storage of cars. Densities would increase in some areas, Detroit would be one of those areas that could benefit greatly from this. NYC not as much, as many folks have already resigned their cars.

  6. #6

    Default

    After Penn-Central dumped their losing railroad on the government Conrail, they became a very profitable real estate company. After Northwest Industries dumped their money losing Chicago & Northwestern Railroad on their employees, they became a very profitable company. Sometimes addition by subtraction works very well. Sometimes, it is a precursor to further failure (Sears Holdings?).

  7. #7

    Default

    Does anyone know how Toyota and VW are doing in these int'l markets recently?

  8. #8

    Default

    Quote Originally Posted by mikeg19 View Post
    Ford is doing the same thing. Concentrating on profitable, emerging markets like China, India, and of course North America. South America and Europe, including Russia, are just not profitable for them currently. They may be pulling out now for the foreseeable future, but I wouldn't be surprised to see them in those markets again someday.

    A lot of those countries place restrictions on outsiders also,Locking others out.

    Tata is or has joined with other countries flag ships to break into their countries,Fiat,Hyundai and they all are based like GM used to be In regards to what they offered,from two wheels up to 16,Tata owned Ducati and was selling it to the Chinese.

  9. #9

    Default

    Quote Originally Posted by 401don View Post
    Does anyone know how Toyota and VW are doing in these int'l markets recently?
    Volkswagen Is The New Global Sales Leader: What It Means

    At the forefront of the growth in Volkswagen’s impressive volume growth in 2016 was the 12.2% year-over-year increase in deliveries to China, its single largest market. Although the Chinese passenger vehicle market grew solidly last year, this was mainly as the government halved the 10% purchase tax on cars equipped with 1.6-liter engines or smaller engines in October 2015, in response to a period of slow growth in the country’s vehicle market. The year-over-over growth rate is expected to slow down in the new year in China, despite the government’s extension of the tax breaks into 2017. A slowdown in China sales could hamper growth in Volkswagen’s overall deliveries this year.
    With sales expected to have peaked out in the U.S., Toyota could continue to struggle to sell more vehicles. However, losing the global sales crown to Volkswagen in 2016 doesn’t mean all that much for either company. While one focuses on higher profitability, the other is grappling still with the aftermath of its biggest scandal ever.

  10. #10

    Default

    Quote Originally Posted by 48307 View Post
    I wonder if developers might start to shy away from making parking structures, as their long term use may be in question. Imagine a new downtown (not just Detroit, but anywhere) where far less space is dedicated to the storage of cars. Densities would increase in some areas, Detroit would be one of those areas that could benefit greatly from this. NYC not as much, as many folks have already resigned their cars.
    Unfortunately, that will make the roads almost twice as congested. A car will need to make the trip twice to drop off and pickup a person at work.

    Also I don't think you will be saving money by getting rid of vehicles due to families going from 2 cars down to 1. There will need to be enough vehicles on the road to manage the surges during rush hour. Children who can't drive now will be taking these things to school. You think the car drop off line at the elementary school is bad now. Wait until kids start taking automated cars to schools.

    Self driving cars are going to add to the number of vehicles needed in this country. Every time we've made vehicles simpler to use we greatly increase the number of vehicles on the road.

    When you can sleep or work in your car on the way to work, it will allow people to have longer commutes putting more cars on the road for longer periods of time.

  11. #11

    Default

    We will also need to create traffic control software for places like drop off lanes and parking garages. Something that can take control of the cars while in those location. Think of it like air traffic control at the airports.

    How is a policeman going to pull over an automated car?

  12. #12

    Default

    Quote Originally Posted by ndavies View Post
    Unfortunately, that will make the roads almost twice as congested. A car will need to make the trip twice to drop off and pickup a person at work.

    When you can sleep or work in your car on the way to work, it will allow people to have longer commutes putting more cars on the road for longer periods of time.
    The ideal seems to be that the driverless cars will operate as livery not private cars and be cheap enough to supplant a private car for most.

    You join the car service. A car picks you up at home, drops you off at work and then goes to the next member. If you stay late at work you use your phone to push your pickup time out by an hour. The cars get cleaned and maintained during extended downtime. Plus there are other services with cars running around taking fares as taxi's do now.

    Much less reason to own a private car if that scenario can be achieved. Which, it probably will be eventually.

  13. #13

    Default

    Thanks, but I was asking how other automakers, i.e. VW and Toyota, are doing in these markets where GM is struggling i.e. Australia, Russia, South America and Europe.

  14. #14

    Default

    Quote Originally Posted by Shai_Hulud View Post
    The ideal seems to be that the driverless cars will operate as livery not private cars and be cheap enough to supplant a private car for most.

    You join the car service. A car picks you up at home, drops you off at work and then goes to the next member. If you stay late at work you use your phone to push your pickup time out by an hour. The cars get cleaned and maintained during extended downtime. Plus there are other services with cars running around taking fares as taxi's do now.

    Much less reason to own a private car if that scenario can be achieved. Which, it probably will be eventually.
    The problem is the same problem that public transit has. You need to build capacity for the peak demand (rush hour) periods that will be unprofitably sitting around during non-peak periods.

  15. #15

    Default

    Quote Originally Posted by Hermod View Post
    The problem is the same problem that public transit has. You need to build capacity for the peak demand (rush hour) periods that will be unprofitably sitting around during non-peak periods.
    Maybe they can deliver things when not delivering people.

  16. Default

    I don't foresee the peak demand situation being any more of an issue that it is now. Lessen it is more likely. Self-drivers offer a multiplicity of solutions to lessen that situation. Beyond being able to pick up pools they can respond immediately to traffic conditions to find alternate routes without tuning into WWJ traffic on the eights.

    Parking cost savings alone could justify their costs. They will be able to pick the cheapest places to park, even free places, once their human cargo is delivered, not to mention offering door to door pick up and drop off convenience. Additionally they could be sent on shopping pick-up missions or released during working hours to earn their owners cab fares.

  17. #17

    Default

    Quote Originally Posted by ndavies View Post

    How is a policeman going to pull over an automated car?
    The same way a technician services a downed machine. We don't treat the machine like it has an ill intended conscience, it just needs some attention. It is also safe to say that a run away autonomous vehicle will have the same chance of causing damage as a misbehaving assembly line robot. Very rarely does anyone get hurt. Personally, I don't fear the technology one bit.

  18. #18

    Default

    Opel in Europe lost 20 billion over 17 year which is why GM sold it. GM also exited Russia in 2015 due to the ruble falling and a 23% drop in sales. Russia also invaded Ukraine in 2014. The geopolitical risk was high with Russia. GM is losing money in South Korea and the geopolitical risk seems very high with N Korea. Snaggle Puss -Exit stage right!

    https://qz.com/914573/after-losing-2...ll-to-peugeot/

  19. #19

    Default

    Quote Originally Posted by ndavies View Post
    Children who can't drive now will be taking these things to school. You think the car drop off line at the elementary school is bad now. Wait until kids start taking automated cars to schools.
    That's why I've been working on the Kidapult (tm). Your kids, in their foam-lined container, will be ejected from the self driving car, and captured by the school. It won't even need to slow down. The drop off line will be a thing of the past.

  20. #20

    Default

    Quote Originally Posted by archfan View Post
    That's why I've been working on the Kidapult (tm). Your kids, in their foam-lined container, will be ejected from the self driving car, and captured by the school. It won't even need to slow down. The drop off line will be a thing of the past.
    Kind of like parenting.

  21. #21

    Default

    Quote Originally Posted by Shai_Hulud View Post
    The ideal seems to be that the driverless cars will operate as livery not private cars and be cheap enough to supplant a private car for most.

    You join the car service. A car picks you up at home, drops you off at work and then goes to the next member.

    This still means there are a lot of cars driving around empty (as taxis do now). While the cars are on the way to the next member,.. they are empty.

    Shared car schemes mean less need for parking garages,.. and more need for roads.

    Of course this also requires that most people are fairly poor (or live in NYC),. and live in tiny apartments,... and don't have any children. (Something the gov't is working on,.. making people poor, and more dependent on gov't)

    If you own a home,. you need to haul stuff.

    If you have children,.. you need a car with child seats that are correctly adjusted for the size of your children,.. and perhaps baby gear, sports equipment, some jackets and hats. Bottles of water,....

    Every trip has to be carefully planned out also. No leaving that big thing you need to return in you trunk until the next time you go by Costco.

  22. #22

    Default

    Quote Originally Posted by ndavies View Post

    How is a policeman going to pull over an automated car?
    Spike strips. No problem.

  23. #23

    Default

    Quote Originally Posted by Bigdd View Post
    This still means there are a lot of cars driving around empty (as taxis do now). While the cars are on the way to the next member,.. they are empty.

    Shared car schemes mean less need for parking garages,.. and more need for roads.

    Of course this also requires that most people are fairly poor (or live in NYC),. and live in tiny apartments,... and don't have any children. (Something the gov't is working on,.. making people poor, and more dependent on gov't)

    If you own a home,. you need to haul stuff.

    If you have children,.. you need a car with child seats that are correctly adjusted for the size of your children,.. and perhaps baby gear, sports equipment, some jackets and hats. Bottles of water,....

    Every trip has to be carefully planned out also. No leaving that big thing you need to return in you trunk until the next time you go by Costco.
    When you took the bus and streetcar downtown to Hudson's, Kern's, and Crowley's, there was no provision for strollers. It was "march or die" for the kids then (pet peeve, seeing an 8 year old in a stroller in the mall).

  24. #24

    Default

    Quote Originally Posted by Bigdd View Post
    This still means there are a lot of cars driving around empty (as taxis do now). While the cars are on the way to the next member,.. they are empty.

    Shared car schemes mean less need for parking garages,.. and more need for roads.

    Of course this also requires that most people are fairly poor (or live in NYC),. and live in tiny apartments,... and don't have any children. (Something the gov't is working on,.. making people poor, and more dependent on gov't)

    If you own a home,. you need to haul stuff.

    If you have children,.. you need a car with child seats that are correctly adjusted for the size of your children,.. and perhaps baby gear, sports equipment, some jackets and hats. Bottles of water,....

    Every trip has to be carefully planned out also. No leaving that big thing you need to return in you trunk until the next time you go by Costco.
    Parents with small children, I'll concede would probably need a personal car. However, they wouldn't need a car for every adult in the house as is the case now.

    Hauling and shopping trips are minor logistical issues that are easily overcome as people who live in walking cities do everyday. Yes, there's an American fixation on owning products appropriate for what you do 5% of the time as opposed to what you do 95% of the time, which is why I see F-250's empty and untrailered rolling down the road every day. Which, coincidentally, probably has a lot more to do with why most of us are broke rather than a sinister conspiracy.

    Yes, there are scale and cultural issues to overcome, and it won't be today or tomorrow, but overcome they will be.

  25. #25

    Default

    Can you imagine hacking into 10,000 computerized cars at once and force them to do something ill advised?

    To me half of the fun of owning a car is actually driving it,the down side is when others get in the way.

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