SINGAPORE (Dec 3): In a sweeping transformation to prepare for a future of electric and self-driving cars, General Motors, the world’s top automaker, last week moved to shut down five North American plants, laying off 14,000 people, by the end of next year. The factories to be shuttered not only made internal combustion engine-based passenger cars but also the hybrid Chevy Volt. In their place, GM is adding capacity at plants that will make its pure-battery electric car Chevy Bolt, and throwing more money at Cruise, its driverless car unit, in San Francisco.
The move by CEO Mary Barra is clearly a sign of the times. GM has been undergoing a makeover for nearly a decade since it was rescued by US taxpayers at the height of the global financial crisis in 2008. The auto behemoth has been gradually exiting the manufacturing of lower-margin passenger cars in North America to focus on higher-margin sport utility vehicles (SUVs), pickups and trucks. Among the Big Three US automakers, GM has also been the most aggressive in its China strategy and its focus on the future — electric and driverless cars. Barra’s strategy has been to concentrate on “zero crashes, zero emissions and zero congestion”, the euphemism for electric, autonomous and ride-sharing.
Here is how the global auto business is changing. Over 82 million passenger cars, including SUVs but excluding trucks, pickups and buses, will be sold around the world this year. China is the biggest market with sales of about 24.6 million cars projected for this year. The US is a distant second with 17 million, Western Europe 14.6 million and India 2.4 million. Global car sales are forecast to decline for the first time since 2009. This year, Americans will buy 200,000 fewer cars than they did in 2017, and the Chinese car market — the engine of growth — is screeching to a halt. Auto sales in China have dropped for five months since May and are likely to be down this year for the first time in over two decades. The only segment of the market that is growing is electric cars. That’s pure-battery electric cars, not hybrids such as the Toyota Prius. EV sales globally topped 1.3 million in the first nine months of the year with just over 50% of electric car sales being in China. A total of 1.9 million electric cars are likely to