General Motors 3Q16 Earnings Call Notes

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General Motors (GM) Q3 2016 Results

We recognize that the industry is increasingly competitive

“However, given the recent increased interest in industry incentive and inventory levels, I’d like to spend a few additional minutes to share our view. Cleary, we recognize the industry is increasingly competitive, especially as consumer preferences are shifting away from sedans and more towards SUVs and trucks. We’ve remained absolutely committed to our disciplined retail-focused go-to-market strategy, and we have demonstrated that by managing supply and demand, and through disciplined pricing.”

Making progress with autonomous

“Sure. We are making great progress on the autonomous development. As I mentioned, we have a fleet now running, not only in San Francisco, but also in Scottsdale, so 30 vehicles on the road. And that’s important because it’s not just the miles, but it’s really the experiences and the scenarios that they continue to learn every day and I’m very pleased with the team’s performance.”

Autonomous will begin with ride sharing because it can be geo-fenced

“As we look at launching autonomous into the marketplace, we believe it will first happen in a controlled environment, in a ride-sharing environment, hence the alliance that we did with Lyft, as well as the work that we’re doing with Maven. But as we see it going into ride sharing, that’s because it will be geo-fenced, you’re going to have limitations with speed and other limitations, and that’s why the ownership will stay with the company in these first models as we continue to learn.”

Safety is top concern

“And so, that path is very much on track, but I will say what is going to gate our launching of autonomous vehicles into the marketplace for consumers is safety. And we are working very hard with the experience that we have to do that in the safest manner possible because it does then really address the issues that we have of over 90% of fatalities in today – in today’s U.S. streets are human error. ”

China is going to lead in the penetration of electric vehicles

” we believe that China is going to lead in the penetration of electric vehicles into the market, and that’s why we’ve announced that we have 10 new energy vehicles coming out. I would say we’re also the only OEM that actually manufactures batteries in-country right now. Clearly, we have the strength of the products that we have available to sell globally, with the second generation Volt as well as the Bolt EV and the Ampera-e, along with many other electrified products in China.”

Charles K. Stevens – General Motors Co.

Industry in China running stronger because a purchase tax incentive, but that could go away next year

“Obviously, this year the industry is running stronger than we expected, because of some uncertainty around the purchase tax incentive, if that was to end and the government was to announce an end to that, our planning assumption would be that – there could be some volatility in maybe the first quarter and second quarter of next year, but then we would still expect the industry to continue on that growth path towards 30 million units and as we’ve talked before, a little bit more volatile growth pattern and in the kind of low single digit range over the next number of years, again it really depends on what’s announced from the government’s perspective, we have no insight on that”

Truck buyers are the most loyal of any customer

“truck buyers are the most loyal of any customer. The loyalty rates of truck buyers are north of 60% and generally you are in the 50% range, so that’s first, you are dealing with that aspect.”