I Gen­eral Mo­tors halts global re­treat


Gen­eral Mo­tors has called a halt to its global re­treat after pulling out of the In­dian and South Africa mar­kets, a down­grade to its sta­tus as a global player but a spur to its prof­itabil­ity.—

Gen­eral Mo­tors has called a halt to its global re­treat after pulling out of the In­dian and South Africa car mar­kets.

The US car­maker, whose brands in­clude Chevro­let, Cadil­lac and Buick, has been steadily with­draw­ing from weak or loss­mak­ing mar­kets and leav­ing Europe and Rus­sia, as well as In­done­sia and Thai­land.

The strat­egy down­grades its sta­tus as a global player but bol­sters GM’s core prof­itabil­ity, al­low­ing it to in­vest in new tech­nolo­gies and boost its fi­nan­cial health head­ing into an ex­pected down­turn in the US car mar­ket.

Mary Barra, chief ex­ec­u­tive, said the lat­est move was the last sig­nif­i­cant with­drawal by GM. “Glob­ally, we are now in the right mar­kets to drive prof­itabil­ity, strengthen our busi­ness per­for­mance and cap­i­talise on growth op­por­tu­ni­ties for the long term.”

GM will halt sales in In­dia by the end of this year, after which its In­dian man­u­fac­tur­ing plant will fo­cus on pro­duc­tion for Latin Amer­ica. In South Africa, it will stop sales and pro­duc­tion of Chevro­let cars by the end of the year and sell its fac­tory in the Port Elizabeth in­dus­trial hub to Ja­pan’s Isuzu.

GM is tar­get­ing oper­at­ing mar­gins of 9-10 per cent glob­ally by 2020, com­pared with 7.5 per cent last year.

Re­becca Lind­land, an an­a­lyst at Kel- ley Blue Book, said: “GM is no longer a global com­pany but it is a prof­itable one.

“For so many years they chased mar­ket share, but that’s not Mary Barra’s pri­or­ity: the pri­or­ity is fis­cal re­spon­si­bil­ity over brag­ging rights.”

While car­mak­ers such as Toy­ota and Re­nault have been ex­pand­ing their share of In­dia’s fast-grow­ing car mar­ket, GM has been strug­gling. It sold 25,823 ve­hi­cles in the year end­ing in March, 21 per cent down from the pre­vi­ous year, giv­ing it a mar­ket share of 0.9 per cent.

GM’s de­ci­sion to end pro­duc­tion in South Africa is a blow to Pre­to­ria’s drive to at­tract for­eign car­mak­ers through tax in­cen­tives and trade agree­ments with the US and Europe.

Daim­ler of Ger­many has formed an al­liance with Utah-based Vivint So­lar to pro­vide power stor­age for US homes, in the lat­est ex­am­ple of how car com­pa­nies are po­si­tion­ing them­selves for a shift to­wards elec­tri­fi­ca­tion.

The col­lab­o­ra­tion pits Daim­ler di­rectly against Elon Musk’s Tesla, which also of­fers bat­ter­ies for home power stor­age and so­lar power sys­tems through So­larCity, which it ac­quired last year.

In March Daim­ler set a tar­get of hav­ing at least 10 mod­els of elec­tric cars on the mar­ket by 2022, three years ear­lier than it had pre­vi­ously planned.

Boris von Bor­mann, US chief ex­ec­u­tive of Mercedes-Benz En­ergy, Daim­ler’s bat­ter­ies busi­ness, said so­lar power and res­i­den­tial stor­age were “es­sen­tial” for elec­tric ve­hi­cle own­ers to be able to cut their green­house gas emis­sions.

“It is all tied to­gether,” he said. “It’s not just the ve­hi­cle, but the full ex­pe­ri­ence for the cus­tomer switch­ing from a diesel to an elec­tric ve­hi­cle.”

Daim­ler last year launched a line of bat­ter­ies for home power stor­age, which are as­sem­bled in Ger­many, but so far they have been avail­able only in Europe. The launch of the bat­ter­ies in the US re­flects the fact that the com­pany sees it as a key mar­ket for elec­tric ve­hi­cles, Mr von Bor­mann said.

Vivint is one of the largest res­i­den­tial so­lar com­pa­nies in the US, but like the rest of the in­dus­try it has been go­ing through a dif­fi­cult pe­riod. To­tal in­stal­la­tion of new sys­tems dropped to 46 mega- watts in the first quar­ter, down from 55MWin the equiv­a­lent pe­riod of 2016.

Other lead­ing US rooftop so­lar providers have been of­fer­ing home power stor­age sys­tems. Tesla has its Pow­er­wall bat­tery, and Cal­i­for­nia-based Sun­run signed a deal last year with LG Chem of South Korea to pro­vide home stor­age.

The fall­ing cost of bat­ter­ies has made res­i­den­tial power stor­age an eco­nom­i­cally vi­able op­tion in some places. It is most at­trac­tive in states such as Cal­i­for­nia where cus­tomers are on elec­tric­ity tar­iffs that vary through the day, and can cut their con­sump­tion from the grid at more ex­pen­sive times.

David By­wa­ter, Vivint’s chief ex­ec­u­tive, said the com­pany had been look­ing for a part­ner so it could of­fer bat­ter­ies along­side its so­lar sys­tems and had talked to car man­u­fac­tur­ers and other com­pa­nies about a pos­si­ble al­liance.

Daim­ler’s bat­ter­ies are mod­u­lar, with 2.5 kilo­watt hour units that can be fit­ted to­gether to make a sys­tem with up to 20 kWh of stor­age. That sys­tem is ex­pected to sell for $13,000 in­clud­ing associated equip­ment, sys­tem de­sign and in­stal­la­tion. That com­pares to Tesla’s Pow­er­wall, which is on the mar­ket at $5,550 for a 14 kWh unit, but Tesla’s price does not in­clude in­stal­la­tion.

‘It’s not just the ve­hi­cle, but the full ex­pe­ri­ence for the cus­tomer switch­ing from a diesel to an elec­tric ve­hi­cle’

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