Growth Strategies and Market Positioning in Automotive Retail

Current Market Trends in Automotive Retail

GM's Chevrolet and GMC full-size pickups saw a 3% sales increase and a 1.8-point market share gain, while overall U.S. vehicle sales dropped. Ford noted slower-than-expected electric vehicle adoption and pricing pressures. Tesla highlighted the cyclical nature of vehicle sales, indicating market volatility.

"We grew our combined Chevrolet and GMC full-size pickup sales by 3% year-over-year and grew our retail market share 1.8 points to 43.8% with much lower incentives than our closest competitors whose sales were down." --- (GM, earning call, 2024/Q1)

"RECENT DEVELOPMENTS Electric Vehicle Market Although we continue to invest in our electric vehicle strategy, we have observed lower-than-anticipated industrywide electric vehicle adoption rates and near-term pricing pressures, which has led us, and may in the future lead us, to adjust our spending, production, and/or product launches to better match the pace of electric vehicle adoption." --- (F, sec filing, 2024/Q1)

"Further, sales of vehicles in the automotive industry also tend to be cyclical in many markets, which may expose us to increased volatility as we expand and adjust our operations." --- (TSLA, sec filing, 2024/Q1)

"Our total vehicle sales in the U.S., our largest market in North America, were 0.6 million units for market share of 15.4% in the three months ended March 31, 2024, representing a decrease of 1.0 percentage point compared to the corresponding period in 2023." --- (GM, sec filing, 2024/Q1)

"As expected, a loss in the range of [$5 billion to $5 billion] (ph) for Model e, driven by continued pricing pressure and investments in new vehicles, and for Ford Blue, EBIT of $7 billion to $7.5 billion, reflecting a balanced market equation and also cost efficiencies offsetting higher labor and product costs." --- (F, earning call, 2024/Q1)

Impact of Digital Transformation

Digital transformation is driving significant opportunities in the automotive industry, particularly in ICE and Pro business segments. Companies like Ford and GM are leveraging technology to enhance vehicle capabilities and integrated services, viewing digital transformation as a strategic shift rather than just a profit-making opportunity.

"No. Because the biggest opportunity for us in this digital transformation in the industry is our ICE business, our Pro business." --- (Ford, conference, 2024/05/30)

"And so we're going to continue to look at that and just continue to strengthen the team because in a company when you look at how every industry is being transformed by technology, we are not only facing the technology transformation, but we're in this generational propulsion on what the vehicle can do." --- (GM, conference, 2024/05/30)

"You can't just look at the digital transformation as like, I can make some money." --- (Ford, conference, 2024/05/30)

"But we can do it globally. So that's 1. Compete where you know the customers really well because for software innovation, which we haven't really talked about, and all the digital transformation of our industry, which is most exciting for me, integrated services, that's where you can win." --- (Ford, conference, 2024/05/30)

Enhancing Customer Experience

GM and Ford are enhancing customer experience by delivering new products, increasing capacity, focusing on customer demand, and offering diversified software and physical services. GM's Ultium-based EVs ensure customers face no trade-offs, while Ford emphasizes its unique global lineup.

"supplemented in subsequent reports we file with the SEC, include, among others, the following: (1) our ability to deliver new products, services, technologies and customer experiences in response to increased competition and changing consumer needs and preferences; (2) our ability to timely fund" --- (GM, sec filing, 2024/Q1)

"And we're doing everything we can to increase our capacity for our customers. It's very frustrating for them. John Murphy: Great. Thank you very much." --- (F, earning call, 2024/Q1)

"And we're just going to stay focused on where the customer demand is at. We feel we've got really strong products that, as Paul mentioned, we're growing share." --- (GM, earning call, 2024/Q1)

"No one has this kind of lineup in our business globally. The third key area is the diversification and the completeness of our software and physical services experiences for our customers." --- (F, earning call, 2024/Q1)

"So I feel much better about that. And as Paul said, we're seeing good progress with our Ultium-based EVs because they are purpose-built and they do have -- there's -- customer's not making a trade-off." --- (GM, earning call, 2024/Q1)

Competitive Landscape and Positioning

GM acknowledges the shifting market landscape due to Chinese OEMs, while Tesla aims to exceed supplier competitiveness and leverage AI for faster product launches. Ford focuses on accelerating progress to close competitive gaps. GM also emphasizes long-term competitive positioning with a strong balance sheet.

"So we think, clearly, that market has shifted and the landscape has shifted from -- with the capability of the Chinese OEMs." --- (GM, earning call, 2024/Q1)

"As Lars said, we think it will be exceed the competitiveness of suppliers by the end of this year and then we'll continue to improve." --- (TSLA, earning call, 2024/Q1)

"And so we need to get our pace of progress to accelerate beyond where our competitors are to start to close that gap. But we're going to continue to do that. And then you've obviously had" --- (F, conference, 2024/06/11)

"We continue to monitor and evaluate opportunities to strengthen our competitive position over the long term while maintaining a strong investment-grade balance sheet." --- (GM, sec filing, 2024/Q1)

"our approach to autonomy is scalable and that accomplishments in artificial intelligence, along with leveraging our existing production lines to get our next generation products to market faster, are essential to achieving our mission." --- (TSLA, event transcript, 2024/06/13)

Sustainability Initiatives

Automotive giants like GM, Tesla, and Ford are intensifying their sustainability efforts. GM is focusing on supply chain sustainability and corporate citizenship, while Tesla aims for a fully sustainable global economy and considers integrating sustainability metrics into executive compensation. Ford is advancing with a highly sustainable EV assembly plant in Europe.

"Item 7 on our agenda is a shareholder proposal requesting a report on sustainability risk in the company's supply chain." --- (GM, event transcript, 2024/06/04)

"The goal is to give people hope that there is a path to a fully sustainable global economy, that we are on that path, that we are accelerating that path, and that so long as we don't get complacent about it, it will happen." --- (TSLA, event transcript, 2024/06/13)

"Our first EV dedicated plant in Europe & one of our most sustainable and efficient assembly plants globally." --- (F, Twitter, 2024/06/04)

"We plan to execute our strategy with a steadfast commitment to good corporate citizenship through more sustainable operations and a leading health and safety culture." --- (GM, sec filing, 2024/Q1)

"Let's move on to the 6th stockholder proposal, which is an advisory vote regarding adopting targets and reporting on metrics to assess the feasibility of integrating sustainability metrics into senior executive compensation plans." --- (TSLA, event transcript, 2024/06/13)

Financial Performance and Growth Metrics

Ford and GM utilize key financial metrics like ROIC and EV profitability to gauge performance. Ford's Model e segment saw a significant drop in revenue and EBIT, while their hybrid business grew by 36%. GM's focus on EV profitability and performance-based compensation metrics underscores their strategic priorities.

"Return on Invested Capital (“ROIC”). We analyze total Company performance using an adjusted ROIC financial metric based on an after-tax, rolling four-quarter average." --- (F, sec filing, 2024/Q1)

"Further, our Board of Directors uses certain of these, and other measures, as key metrics to determine management GENERAL MOTORS COMPANY AND SUBSIDIARIES performance under our performance-based compensation plans." --- (GM, sec filing, 2024/Q1)

"Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Ford Model e Segment First Quarter Key Metrics 2023 2024 H / (L) Wholesale Units (000) 12 10 (3) Revenue ($M) $ 707 $ 115 $ (592) EBIT ($M) (722) (1,320) (598) EBIT Margin (%) (102.1) % (1,145.9) % (1,043.8) ppts Change in EBIT by Causal Factor (in millions) First Quarter 2023 EBIT $ (722) Volume / Mix (12) Net Pricing (548) Cost 34 Exchange (63) Other (9) First Quarter 2024 EBIT $ (1,320) In the first quarter of 2024, Ford Model e’s wholesales decreased 20% from a year ago to 10,000 units." --- (F, sec filing, 2024/Q1)

"We expect full year Cruise expenses to be around $1.7 billion. Let's move now to one of the most important metrics we're focused on, EV profitability." --- (GM, earning call, 2024/Q1)

"Our growth in the first quarter in hybrids is a good example. We grew 36%, we think the full year would be 40%, we're now approaching 400,000 units of volume for our hybrid business." --- (F, earning call, 2024/Q1)