In an investors’ meeting in Detroit, General Motors CEO Mary Barra admitted the company is facing disrupting elements from outside the industry. These include the likes of Apple, Google and many start-ups in electric and alternative drive systems.
Her answer to the disruptors was "There is no question this industry is being disrupted. But we are a disruptor as well. We are disrupting ourselves.”
This reply is similar to an earlier response rejecting a merger call by Fiat Chrysler Automobiles’ (FCA) chief Sergio Marchionne when she said that GM would not welcome a merger, adding “We are merging with ourselves.” The issue resurfaced briefly in the latest investors’ meeting and her answer to the question of whether she had heard from FCA lately was “No, I haven’t.”
The conference discussed many aspects of GM strategy going forward, including connectivity, electric technology and economy of scale. The company has 19 years of experience with the OnStar system which now has a smartphone app that can start the car remotely and carry out many functions. This app was used 50 million times in the first half of this year compared to 33 million times in the whole of 2013. GM is planning other uses for the system including future car sharing and e-rentals.
Similarly, GM had an early start with electric vehicles and is now working on reducing costs of batteries for the Chevrolet Bolt set for a 2016 launch. On scale, the company aims to reduce costs by $5.5 billion by the end of 2018. It also has a number of strategic partnerships — not mergers — including one with Honda on fuel-cell technology that would lead to commercially viable vehicle by 2020.
It looks like GM is on the right track to meet future challenges without need for mergers but would need to convince the markets that it is seriously capable of dealing with outside disruptors and most importantly able to disrupt itself too.
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* Adel Murad is a senior motoring and business journalist, based in London.
Email: [email protected]
