Mary Barra, CEO of General Motors, has said that the company’s international operations still need further work.
In the wake of the sale of Opel and Vauxhall to PSA, the parent company of Peugeot and Citroen, Barra told journalists, including those from Automotive News: “There’s a little bit more work that we’re doing in the international markets. Our overall philosophy is that every country, every market segment has to earn its cost of capital.”
During the call, the company presented a chart (below) about where it might reduce investment with North American cars and ‘select’ international markets the only sections highlighted for cuts. Barra told reporters that profit potential and franchise strength would be key factors in determining where cuts will be made.
That said, one large component of the General’s overseas profile is its South American business. Although its operations there are running at a significant loss due to a severe economic downturn, that region will actually receive greater investment as management sees its franchise value there as being high.
Barra and Dan Ammann, president of General Motors, have refused to comment on which programs, models or, potentially, brands will be pared back, given less attention or axed.
At the recent Geneva motor show, Ammann told CarAdvice and other publications that Holden is a “strong franchise … in a good position in the market”, and that General Motors is “100 per cent committed to the business in Australia and New Zealand”.
The company could choose cut back investment in certain market segments, such as city cars and large sedans, both of which are faring poorly at the moment in the US. The General could also save money by stretching out model life cycles or delaying updates.
Ammann added, “We expect those architectures [we introduced recently] to carry us far into the future”.
Freed up resources will be spent on the all-important pickup truck and SUV segments, Cadillac, China, GM Financial, and self-driving vehicles.