General Motors’ plans to close five North American plants, cut 15% of its staff, and halt the manufacture of several car models including the Cruz, raised questions from an Edmunds analyst about how the moves will affect GM Financial.
On Nov. 26, the OEM said it was making the cuts to improve near-term performance and set itself up for a future of electronic and autonomous vehicles. But the OEM also said it was taking steps to capitalize on the future of personal mobility.
“This big transition that GM is gearing up for is transportation as a service instead of a product,” Jeremy Acevedo, manager of industry analysis at Edmunds, told Auto Finance News. “There’s not going to be a huge need for [consumers] to finance vehicles if GM is maintaining vehicles as we move toward autonomous and electric vehicles,” he said.
The idea of having a fleet of vehicles that is wholly based on utilization as opposed to ownership taps into different areas of revenue, he added, including delivery services and ride-hailing. As for the immediate-term, GM is likely to “double down on sales of high-profit SUVs and use it as a middle ground to step up financing these lofty futuristic goals,” Acevedo said.
GM said it would shut operations at plants in Detroit; Oshawa, Ontario; Warren, Ohio; White Marsh, Md.; and Warren, Mich. GM expects cash savings of $6 billion by yearend 2020.