Digital Gabe
Cutting Edge Commentary On All Things Media

GM Foretells The Future Of Auto

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Yesterday GM announced its plan to eliminate 15,000 positions in North America.  The downsizing immediately drew criticism from the auto unions and politicians alike.  Is GM diverting production to China to avoid the extra costs of Trump-era steel tariffs?  Or maybe they’re trying to shift their product mix away from sedans and towards trucks and SUVs, since most of the assembly lines targeted for layoffs manufacturer cars?  While these theories make for good headlines there’s a much larger transformation happening in the auto industry, and GM may just be a precursor of things to come.

The biggest issue facing auto manufacturers is a pivot away from selling vehicles which get you from point A to point B and towards mobility, which is transportation itself.  Fully functional autonomous driving is less than two decades away, and ridesharing companies have proven that consumers paying for transportation by the ride is a sustainable business model.  Put these two factors together and you might not even need to own a car by around 2040.

This realization is the reason GM is reorging now.  By reducing its legacy business model of manufacturing vehicles for private ownership GM can free up resources for investment in autonomous driving, electric vehicles, ridesharing tech, etc..  This may not be particularly comforting news for anyone working in or dependent on today’s auto industry, but it’s a realistic view of a category in flux.  In fact, I wouldn’t be surprised to see other OEMs follow GM’s lead over the next few years.

 

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