Latest / Bloomberg Intelligence / P&L: Volvo Will Start Producing Cars in U.S. by Mid-2018

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P&L: Volvo Will Start Producing Cars in U.S. by Mid-2018 · Bloomberg Intelligence

• 0:04
  Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm Pim Fox.
• 0:08
  Speaker 1: Along with my co host Lisa Abramowitz. Each day we
• 0:11
  Speaker 1: bring you the most important, noteworthy, and useful interviews for
• 0:14
  Speaker 1: you and your money, whether you're at the grocery store
• 0:16
  Speaker 1: or the trading floor. Find the Bloomberg P L Podcast
• 0:20
  Speaker 1: on iTunes, SoundCloud and at Bloomberg dot com. I want
• 0:28
  Speaker 1: to bring in Lex Curse, the maker. So I pronounced
• 0:31
  Speaker 1: that right? Yes, I fabulous. He is President and CEO
• 0:35
  Speaker 1: of Volvo Cars of North America here at the North
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  Speaker 1: American International Auto Show. Um, Lex, what has surprised you
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  Speaker 1: about this show? Just looking in general? Has anything? Um?
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  Speaker 1: I think what you what you see here is is
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  Speaker 1: the trends, which is going on, more pickup trucks, more
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  Speaker 1: SUVs and UH and autonomost drive is the um let's say,
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  Speaker 1: it's the hot words out today. Yeah, but is that
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  Speaker 1: from demand from consumers or is it for auto companies
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  Speaker 1: to feel like they've got a toe hold in what
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  Speaker 1: could come perhaps in the next decade. No. I think
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  Speaker 1: we as automotive manufacturers, we need to be a little
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  Speaker 1: bit ahead of the of the gang, and we strongly
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  Speaker 1: believe at least I speak for Volvo. We we have
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  Speaker 1: a very clear vision by twenty twenty nobody should be
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  Speaker 1: killed or seriously injured in a Volvo car, and autonomous
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  Speaker 1: drive is a very important ingredient of of of reaching
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  Speaker 1: that target. So I think it's it's driven where the
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  Speaker 1: automotive industry is going in the future. Let's talk about
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  Speaker 1: Volvo cars. You did what about a half a million
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  Speaker 1: at last last year? We we had a we had
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  Speaker 1: a third in a row record, a year in a
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  Speaker 1: row record for five and thirty four thousand units. Okay,
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  Speaker 1: five thirty four thousand units. Let's look at the sort
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  Speaker 1: of breakdown of those units and what you see for
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  Speaker 1: the future. Uh, the Let's start with what you're going
• 2:03
  Speaker 1: to unveil or trying to unveil today. What is up
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  Speaker 1: with this T eight hybrid drive train with a combined
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  Speaker 1: combustion engine. Now we have we have the EXCE ninety
• 2:15
  Speaker 1: and that is the the T eight. It's an electrical
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  Speaker 1: motor and it's a force clinder force clinder engine. So
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  Speaker 1: you have the best out of two worlds. You can
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  Speaker 1: drive electric and you can drive with your regular combustion engine.
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  Speaker 1: What will show today is is another step in what
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  Speaker 1: we again, I'm talking about autonomous drive. Um, we will
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  Speaker 1: start a project in Sweden end of this year where
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  Speaker 1: we hand over one cars too regular customers who are
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  Speaker 1: going to experience what autonomous drive means in their daily life.
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  Speaker 1: And that's the This isn't Goldenburg, Sweden? Where where where
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  Speaker 1: the Volvo headquarter is? What about in the US? I mean,
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  Speaker 1: how concerned are you lex about the political backtrap and
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  Speaker 1: interfering with Volvo's plans to unveiled both autonomous cars as
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  Speaker 1: well as manufactured things in the cheapest possible manner. Um,
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  Speaker 1: let me take a step back. We we have decided
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  Speaker 1: to build a factory in the United States because of Trump.
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  Speaker 1: That was far before President Electron came in came into
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  Speaker 1: the picture. We decided this is in South Carolina. This
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  Speaker 1: is in South Carolina. We decided that two years ago
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  Speaker 1: we will start producing cars mid two thousand eighteen. We
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  Speaker 1: built that factory in the United States because we wanted
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  Speaker 1: to be in the United States. Of course, Mexico was
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  Speaker 1: an option. There are other places where we could go.
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  Speaker 1: We wanted to be here because Volver has been here
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  Speaker 1: for sixty years. So it has nothing to do with
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  Speaker 1: with with the existing discussion. The discussion is about autonomous drivers.
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  Speaker 1: We believe in something as much we believed in producing
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  Speaker 1: cars in the United States, we believe in autonomous drive.
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  Speaker 1: But do you think that from a regulatory standpoint that
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  Speaker 1: you will be allowed to test autonomous cars in a
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  Speaker 1: way that you'll need to be able to do so
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  Speaker 1: in the United States the way that you are saying, sweet, Well,
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  Speaker 1: that's a good question. And I think that the NIZA
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  Speaker 1: has released a report or proposal in in in in
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  Speaker 1: July or August where they try to come to a
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  Speaker 1: solution on a from a federal perspective, ALMO allowing manufacturers
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  Speaker 1: to test and because that's a prequisite you you we
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  Speaker 1: can't sell cars which you can't drive from California to Arizona.
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  Speaker 1: You have to stop. So I think that's a prequisite
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  Speaker 1: for the autonomous drive. Yes, just quickly, you're gonna be
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  Speaker 1: importing a car into the United States that's made with
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  Speaker 1: your partner Geely in China. We are we are, we
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  Speaker 1: are currently yes, we are currently already importing cars from
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  Speaker 1: China into the United States. Tell people just what the
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  Speaker 1: model is and what it's it. We we we we
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  Speaker 1: we we we imported the sd S sixty since since
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  Speaker 1: since one and a half year, and we are a
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  Speaker 1: global company. We have factories all over the world, and
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  Speaker 1: we import and export cars out of the US in
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  Speaker 1: the future and into the US from different places in
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  Speaker 1: the world. Might be the way for other automakers to
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  Speaker 1: do it as well. Thanks very much, Lexa kursen Maker's
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  Speaker 1: He is the senior vice president America's President chief executive
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  Speaker 1: for Volvo. We are ready for some transformation and we
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  Speaker 1: have two gentlemen that can help us. Kevin Tynan is
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  Speaker 1: our senior autos analyst for Bloomberg Intelligence. He can be
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  Speaker 1: followed on Twitter at keV tyn in ten and also
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  Speaker 1: joining us is David Welch, our Detroit bureau chief for
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  Speaker 1: Bloomberg News. David Welch, I want to start with you,
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  Speaker 1: because first I want to thank you for having us
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  Speaker 1: here in Detroit and showing us the hospitality of the
• 5:52
  Speaker 1: bureau and arranging for a very nice dinner last night.
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  Speaker 1: Thank you. What is the biggest theme we We've been
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  Speaker 1: going back in fourth year, whether the theme is autonomous driving,
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  Speaker 1: is it hybrid vehicles, or is it just or is
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  Speaker 1: it just really I'm gonna get to the Honda truck
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  Speaker 1: in a second. But is or is it trucks? What's
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  Speaker 1: the theme for you? Well, the market is always trucks,
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  Speaker 1: That's what everybody's buying. Um. But what I find interesting,
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  Speaker 1: honestly is the number of cars and evs that are
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  Speaker 1: here in an era when gas is cheap, No one
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  Speaker 1: is really buying either one of of those, whether it's
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  Speaker 1: electric cars or passenger cars. Um. And the Trump era
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  Speaker 1: is only gonna husher in more of that. He's drill,
• 6:33
  Speaker 1: baby drill, He's franc baby frank. Um. You know, he
• 6:36
  Speaker 1: wants to bring cold back. He wants cheap energy of
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  Speaker 1: every kind, which which means gasoline will be cheap for
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  Speaker 1: as far as the eye can see. And people buy
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  Speaker 1: big stuff. But at this show, we've got a new
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  Speaker 1: BMW five series and Mercedes E Class when that markets
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  Speaker 1: down this year. We've got a new camera you know
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  Speaker 1: that that has head here in five years, right, Um?
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  Speaker 1: And you've got uh many has plug in hybrid. You
• 7:01
  Speaker 1: know who's gonna I mean, I'm a mini owner, but
• 7:02
  Speaker 1: you know i'm the guy. Um, So it was you.
• 7:06
  Speaker 1: You're You're the one. You were the statistic on the
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  Speaker 1: far chart. You know, Kevin, do you agree I mean
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  Speaker 1: what I mean? And also, why do you think that
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  Speaker 1: these automakers are rolling out and sort of advertising their
• 7:17
  Speaker 1: sedans and their mid sized cars in an era where
• 7:20
  Speaker 1: the truck is king. Yeah, and and we're basically unwinding
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  Speaker 1: car demand and car supplied. There's still significant segments. There's
• 7:29
  Speaker 1: still a lot of univolume that goes to those segments,
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  Speaker 1: but it is declining every year. So I think what
• 7:34
  Speaker 1: you're getting can you just put that into perspective and
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  Speaker 1: how much has the car segment declined is a proportion
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  Speaker 1: of overall sales? Well, if you look at the top
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  Speaker 1: three segments by volume as as we lay them out,
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  Speaker 1: compact crossover suv is the largest for the first time
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  Speaker 1: last year, UH, compact car and midsize car would be
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  Speaker 1: two and three, and those had formerly been the largest
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  Speaker 1: segments as as recently as UH those two segments combined,
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  Speaker 1: the car segment we're down in roughly eight percent last year.
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  Speaker 1: Now keep in mind this is a record year in volume,
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  Speaker 1: and car sales were down on midsize and compact while
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  Speaker 1: the compact crossover suv segment was up, so even outperformed
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  Speaker 1: basically a little bit better than flat market. You have
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  Speaker 1: a situation where you can't sell cars. Can't sell cars
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  Speaker 1: except if you've got big promotions, low cost financing, sure
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  Speaker 1: sure leasing. We're seeing record leasing levels also, which is uh,
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  Speaker 1: we're finding creating affordability as average transaction prices are at
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  Speaker 1: record highs as well. But it's also aligning the driver
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  Speaker 1: with the technology cycle. We're seeing new technology every year.
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  Speaker 1: A nice thirty six month lease aligns with what's new
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  Speaker 1: and what's coming. But I keep seeing that there are
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  Speaker 1: a leases for a lot longer and for the actual
• 8:53
  Speaker 1: loan business is taken you out in terms of years
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  Speaker 1: to the point where I don't know whether there being
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  Speaker 1: more rubber or left on the tires by the time
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  Speaker 1: you turn it back. That's a FAIG concern right now,
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  Speaker 1: because resale values have also been going uh down. So David,
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  Speaker 1: why do you think, uh, is this just basically a
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  Speaker 1: PR push then to sort of give a sort of
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  Speaker 1: environmentally friendly uh sort of face to auto companies um
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  Speaker 1: with what they're showing versus the trucks that they're selling. Yeah,
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  Speaker 1: there's well, there are a couple of reasons that you're
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  Speaker 1: seeing a lot of evs plug in hybrids and that
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  Speaker 1: sort of thing I don't auto show one is they
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  Speaker 1: want to talk to regulators. We're doing the right thing,
• 9:29
  Speaker 1: because that's these vehicles are regulatory. You got that, got
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  Speaker 1: the cafe standards, right, I mean yeah, And you've also
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  Speaker 1: got a requirement in California that you have a certain
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  Speaker 1: percentage of your sales and it's not insignificant. Has to
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  Speaker 1: be zero emissions, nothing out of the tail play that
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  Speaker 1: typically means an electric car or and you get partial
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  Speaker 1: credits for a plug in hybrids. They have to make them,
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  Speaker 1: so they're putting them up there to make that statement.
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  Speaker 1: The other thing you have to remember, too, is the
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  Speaker 1: vehicles that we're seeing today, we're planned and developed. There
• 9:56
  Speaker 1: were designers and engineers on the sketch board in two thousands,
• 10:00
  Speaker 1: well when gas was three six gallon. Obama was talking
• 10:03
  Speaker 1: about much tougher, tougher fuel economy rules and Donald Trump
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  Speaker 1: was every reality TV star, So it was a very
• 10:10
  Speaker 1: different world. When these vehicles are on the drawing board,
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  Speaker 1: and now they're coming to market and the market is
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  Speaker 1: much much different than it was back then. We've seen
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  Speaker 1: three and a thousand, five and a thousand years of
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  Speaker 1: growth and it's mostly been SUVs and trucks, but the
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  Speaker 1: stuff they were developing when all that started was much
• 10:26
  Speaker 1: more thrifty. So, Kevin, would you agree with that sort
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  Speaker 1: of lens to put on this that A lot of
• 10:31
  Speaker 1: what we're seeing in terms of the electric vehicles and
• 10:34
  Speaker 1: the a ton of striving in the midsized cars, a
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  Speaker 1: lot of that was produced in an era when people
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  Speaker 1: believed that we're moving to a more fuel efficient standard. Sure,
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  Speaker 1: And what I think automakers are doing is looking out
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  Speaker 1: whether it's five, fifteen, twenty years and saying, let's assume
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  Speaker 1: this endgame is electrification and working backwards. And I think
• 10:56
  Speaker 1: what's different now than the pre bankruptcy period was that
• 11:00
  Speaker 1: they're involved in the development of that technology. Rather than
• 11:03
  Speaker 1: pushing what they want to the market and saying you'll
• 11:06
  Speaker 1: come and you'll buy it. They're involved in that investment,
• 11:10
  Speaker 1: and then it's able to be scalable. So if if
• 11:12
  Speaker 1: electric vehicle penetration goes from three to five to ten
• 11:17
  Speaker 1: to fifteen to forty, whatever it winds up being, they
• 11:19
  Speaker 1: can scale up with. If it doesn't happen, those vehicles
• 11:22
  Speaker 1: can go to the lift fleet, the uber fleet in
• 11:26
  Speaker 1: low low cost leases and they hit their their cafe
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  Speaker 1: and their emissions requirements. That way free to sell as
• 11:34
  Speaker 1: many trucks as they want. On the other side of
• 11:35
  Speaker 1: the equation, there's something we haven't talked about here that's
• 11:38
  Speaker 1: hugely important, and that's China. So China is now the
• 11:41
  Speaker 1: biggest car mark in the world, and the air quality
• 11:44
  Speaker 1: in its major city's is is just unbreathable. So they
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  Speaker 1: are really giving big incentives and big requirements for plug
• 11:52
  Speaker 1: and hybrids, and over the last twelve day two months
• 11:54
  Speaker 1: they've started to go from plug and hybrids being good
• 11:57
  Speaker 1: enough to incentives for battery electric fields just just pure
• 12:00
  Speaker 1: electric cars. And in some cases you know that the
• 12:05
  Speaker 1: company are the government owned companies get massive incentives for
• 12:10
  Speaker 1: buying these cars, and those guys lose money, but that
• 12:12
  Speaker 1: the government props them up. So they're buying a lot
• 12:15
  Speaker 1: of these vehicles that that lose money um for the
• 12:19
  Speaker 1: people who sell them, but the Chinese wanted and as
• 12:21
  Speaker 1: long as the Chinese want this, you're going to have
• 12:24
  Speaker 1: to make them globally, and car makers tend to engine
• 12:27
  Speaker 1: your global fleets of vehicles that they build and sell,
• 12:29
  Speaker 1: So real quick, do you think next year you're going
• 12:31
  Speaker 1: to see the same number of electric vehicles more more,
• 12:34
  Speaker 1: more China leading the charge. Thank you so much both
• 12:36
  Speaker 1: of you for joining us. UH. Kevin Tynan, senior auto
• 12:39
  Speaker 1: analysts for Bloomberg Intelligence and Detroit Bureau chief David Welch,
• 12:43
  Speaker 1: thank you so much. You get more perspective on this incredible,
• 12:57
  Speaker 1: massive floor that we're sitting on with lots of cars
• 13:00
  Speaker 1: in all sorts of positions. I saw one hanging from
• 13:02
  Speaker 1: a wall. I want to bring in Sam Slaughter, chairman
• 13:04
  Speaker 1: of the North American International Auto Show, UH with us
• 13:08
  Speaker 1: here in Detroit. So can you give us some perspective
• 13:11
  Speaker 1: on how this show compares to previous years in terms
• 13:14
  Speaker 1: of scope, a number of attendees, and the types of offerings.
• 13:18
  Speaker 1: Well as far as scope goes. We've added the whole
• 13:21
  Speaker 1: automobility section downstairs, which really speaks to the technology that's
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  Speaker 1: coming in our cars. That a lot of it's here,
• 13:27
  Speaker 1: but we're getting all the way up to autonomous self
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  Speaker 1: driving cars and and that's really the thing to talk
• 13:31
  Speaker 1: about at the show this year. There's a lot of
• 13:33
  Speaker 1: technology here. You can see it even in this play
• 13:35
  Speaker 1: boost right behind they're doing this simulated drive and cars
• 13:39
  Speaker 1: actually moving the way a car would actually move in
• 13:42
  Speaker 1: the track, but it's virtual. Do you think that we're
• 13:44
  Speaker 1: going to see true autonomous vehicles gained some popularity in
• 13:48
  Speaker 1: the next decade? And if so, how to what degree?
• 13:50
  Speaker 1: I mean, how how much will the perpetration be? Yeah,
• 13:53
  Speaker 1: you know, John kraft Trek was here yesterday, the Google
• 13:56
  Speaker 1: autonomous driving guy, and and and they've created this new
• 13:59
  Speaker 1: company called way Bow, and they actually have this price
• 14:01
  Speaker 1: of pacifica that does drive by itself. And they've logged
• 14:05
  Speaker 1: three million miles on the actual vehicle, but five billion
• 14:08
  Speaker 1: miles virtually. And so they're really, uh, they're they're they're
• 14:14
  Speaker 1: perfected it in such a way that, in his words,
• 14:17
  Speaker 1: you know, you can't get close with autonomous driving. It
• 14:19
  Speaker 1: has to be perfect. And so yes, I think you're
• 14:22
  Speaker 1: gonna see increasing self driving capabilities, whether it's fully autonomous
• 14:26
  Speaker 1: or not. I think you're gonna see more and more
• 14:28
  Speaker 1: self driving capabilities. But someday, you know, it could all
• 14:31
  Speaker 1: be self driving. The one thing I don't think it
• 14:34
  Speaker 1: can be, at least yet, is it can't be self cleaning.
• 14:37
  Speaker 1: And the reason I bring that up is because I
• 14:39
  Speaker 1: know that you started off your real love of automobiles
• 14:43
  Speaker 1: by washing cars at the dealership that you subsequently But
• 14:48
  Speaker 1: that's correct. Yeah, and I can still detail a card
• 14:50
  Speaker 1: just so you know. So that's something that you can't automate.
• 14:53
  Speaker 1: And you cannot automate I wish you could. All right, Well,
• 14:56
  Speaker 1: then let's talk about the automation and the detail because
• 14:59
  Speaker 1: you've had to learn a lot of of terms in
• 15:00
  Speaker 1: the last let's say five years. If I had said
• 15:02
  Speaker 1: led ar to you five years ago, what would you
• 15:05
  Speaker 1: have said. I would have no clue. I would have said,
• 15:06
  Speaker 1: as it's something to eat, I don't know. Yeah, So
• 15:08
  Speaker 1: tell people about what it is and maybe just give
• 15:10
  Speaker 1: us let's say the five most important things that people
• 15:13
  Speaker 1: ask for when they're looking for a car and they
• 15:15
  Speaker 1: want this new technology. Well, they're not asking for lighter
• 15:18
  Speaker 1: yet because nobody knows what it is. But what lightar
• 15:20
  Speaker 1: does is it really can see in the dark, in
• 15:24
  Speaker 1: the bright sun, in the snow, and it's really gonna
• 15:28
  Speaker 1: enable self driving things to happen. But you know that
• 15:31
  Speaker 1: technology is coming. Right now, I'm driving a car right now,
• 15:34
  Speaker 1: a gmc Acadia that has adaptive cruise control. You set
• 15:37
  Speaker 1: the cruise at seventy miles an hour. Somebody cuts in
• 15:40
  Speaker 1: front of you to pass a truck, your car slows
• 15:42
  Speaker 1: down automatically, it speeds up automatically, a panic stop and
• 15:45
  Speaker 1: it stops. So there's a lot of things that we're
• 15:48
  Speaker 1: seeing right now in our car, So customers are starting
• 15:50
  Speaker 1: to ask for those kinds of things. Do you think
• 15:53
  Speaker 1: that the first adopters for autonomous cars will really be
• 15:57
  Speaker 1: the ride sharing services? And how much have you seen
• 16:00
  Speaker 1: sort of an increase in representatives from the ride sharing company. Yeah,
• 16:04
  Speaker 1: that's that's a great question, Lisa, And and that some
• 16:07
  Speaker 1: of these ride sharing companies are are participating in the
• 16:09
  Speaker 1: Auto Show for the first time ever with with automobility,
• 16:12
  Speaker 1: And yes, I think that's where the most natural application
• 16:16
  Speaker 1: for it is. The other natural application for his long
• 16:18
  Speaker 1: haul trucking. That's where you know guys getting trucks and
• 16:22
  Speaker 1: they have to drive for eight hours and they have
• 16:23
  Speaker 1: to take eight hours off. Well, the autnos driving truck
• 16:27
  Speaker 1: doesn't have to take time off. So you still might
• 16:29
  Speaker 1: have a driver to keep it clean, to unload and load,
• 16:32
  Speaker 1: but that driver can take his nap while the truck
• 16:34
  Speaker 1: is still making its progress across the country. So have
• 16:37
  Speaker 1: you seen the number of regulators attending this conference also increasing?
• 16:40
  Speaker 1: Just as a result of some of the prospects of
• 16:42
  Speaker 1: trucks barreling at uh, you know, but eighty miles per
• 16:46
  Speaker 1: hour without a driver without a driver. Yeah, you know,
• 16:48
  Speaker 1: that's so interesting you ask that question, because I think
• 16:50
  Speaker 1: that's a whole, you know, wave of of litigation and
• 16:54
  Speaker 1: planning that we haven't had yet. Is you know, right
• 16:56
  Speaker 1: now you and I make a decision where they're going
• 16:58
  Speaker 1: to hit the baby or hit the tree. Right, well,
• 17:01
  Speaker 1: but hopefully not choice. You're going to have to make it.
• 17:06
  Speaker 1: But how do you program that? And who programs that?
• 17:09
  Speaker 1: And then who's responsible for what happens when that accident happens.
• 17:13
  Speaker 1: The good thing about autonomous driving vehicles and all the
• 17:15
  Speaker 1: safety features is we're gonna have a lot fewer accidents,
• 17:18
  Speaker 1: and the ones we have are gonna be bumps, not collisions.
• 17:21
  Speaker 1: Tracking devices that will be in cars to allow not
• 17:25
  Speaker 1: only your family, but perhaps law enforcement or regulatory bodies
• 17:30
  Speaker 1: him really paranoid and do you have something to hide?
• 17:33
  Speaker 1: I mean, are you worried about being But one of
• 17:37
  Speaker 1: the things that I found most interesting is that the
• 17:39
  Speaker 1: information that is garnered from the Tesla automobiles, that is
• 17:42
  Speaker 1: all compiled and used by Tesla in order to then
• 17:46
  Speaker 1: create the next iteration of whatever it is they're trying
• 17:49
  Speaker 1: to accomplish, right, And that's one of the things that
• 17:51
  Speaker 1: this technology, the technology actually learns from its own experience,
• 17:55
  Speaker 1: and that's that's kind of an amazing thought in and
• 17:57
  Speaker 1: of itself. But you know, the days of being anonymous anymore.
• 18:01
  Speaker 1: I mean, you can't be in a Walmart parking lot
• 18:02
  Speaker 1: without being on camera. And now everybody's gonna know where
• 18:05
  Speaker 1: you're going when you're going, how fast you got there? Uh,
• 18:08
  Speaker 1: my bank denied a credit card charge because it said
• 18:11
  Speaker 1: I drove too fast across the state of Michigan on
• 18:13
  Speaker 1: my way to my cottage and I got gas here
• 18:16
  Speaker 1: and I stopped to get groceries there and they wouldn't
• 18:18
  Speaker 1: take my credit card. I guess I have a lead foot.
• 18:20
  Speaker 1: But wow, we learned something new about you. Sorry, you
• 18:23
  Speaker 1: have a lead foot and your your bank is schooled
• 18:26
  Speaker 1: at you. I think, Well, thank you so much for
• 18:28
  Speaker 1: being with us. I'm sure it took months and months
• 18:31
  Speaker 1: of planning, So thank you so much. Sam Slaughter, chairman
• 18:34
  Speaker 1: of the North American International Auto Show. Here on the
• 18:38
  Speaker 1: show floor. All right, we are broadcasting from the North
• 18:51
  Speaker 1: American International Auto Show and Our guest now is Alan Batty.
• 18:54
  Speaker 1: He is the executive vice president and president of North
• 18:57
  Speaker 1: America for General Motors. Alan, thank you very much for
• 19:00
  Speaker 1: being with us. Before we get to the cars, I
• 19:03
  Speaker 1: want people, if you can, just to give them a
• 19:05
  Speaker 1: very small capsule shot of your career to highlight the
• 19:08
  Speaker 1: notion that this is a global business. And while we
• 19:12
  Speaker 1: spend a lot of time and we will spend a
• 19:14
  Speaker 1: lot of time talking about where products are made, your
• 19:16
  Speaker 1: career I think highlights how global the business is and
• 19:20
  Speaker 1: that's not going to change anytime soon, at least anytime soon. Yeah,
• 19:25
  Speaker 1: thank you for that. Nice too nice to be on. Um. Yeah,
• 19:28
  Speaker 1: I actually started in the industry thirty seven years ago. Um,
• 19:32
  Speaker 1: I've actually worked in eight countries around the world. Um,
• 19:36
  Speaker 1: countries like Korea, the Middle East, all over Europe, Australia.
• 19:41
  Speaker 1: So yeah, I have a very China perspective, and you
• 19:43
  Speaker 1: have spent a lot of time in China actually on
• 19:45
  Speaker 1: the board of our joint benches there. So sticking with
• 19:49
  Speaker 1: that kind of global theme, do you expect that going forward,
• 19:53
  Speaker 1: China is going to account for a bigger proportion of
• 19:57
  Speaker 1: business that General Motors does internationally? I mean, do you
• 19:59
  Speaker 1: think that the international market will account for more and
• 20:02
  Speaker 1: more relative to US consumers. Well, you know, the automotive
• 20:05
  Speaker 1: industry at General Motives is really about building where we sell.
• 20:09
  Speaker 1: So most of the vehicles that we sell in China
• 20:11
  Speaker 1: are made in China. Most of the vehicles we sell,
• 20:14
  Speaker 1: for example, in North America are made in North America. Obviously,
• 20:17
  Speaker 1: moving vehicles around the world, the logistics of that is
• 20:20
  Speaker 1: very expensive. So yeah, China is a very very big market,
• 20:23
  Speaker 1: biggest in the world today, coming off of a very
• 20:26
  Speaker 1: strong two thousand and sixty, we expect seventeen to be
• 20:29
  Speaker 1: strong and gain so and and sort of to to
• 20:32
  Speaker 1: speak to my colleague David Welch's point earlier in the program,
• 20:36
  Speaker 1: he was saying that in China there's a very big
• 20:38
  Speaker 1: emphasis on electric vehicles, much more so than here in
• 20:42
  Speaker 1: the US. Are you seeing that as far as you know,
• 20:45
  Speaker 1: Are you seeing that represented in the mix of cars
• 20:47
  Speaker 1: that you are selling in China? Yeah, David's correct. I
• 20:51
  Speaker 1: would say that the future is going to be electric.
• 20:53
  Speaker 1: I would say we're just beginning on that journey. UM.
• 20:56
  Speaker 1: And obviously in China, UM, the regulatory environment is stipulating
• 21:01
  Speaker 1: that we have to have a large proportion our vehicles
• 21:04
  Speaker 1: which are electric and providing electric forms of transportation. So
• 21:10
  Speaker 1: it is going to dramatically change, um the landscape over there.
• 21:13
  Speaker 1: We think we're well equipped UM to be able to
• 21:16
  Speaker 1: adapt and to pivot into that environment. But yes, it's
• 21:19
  Speaker 1: going to look very different in the future. The Bolt,
• 21:22
  Speaker 1: the Chevy Bolt, and the Chevy Bolt e V. Tell
• 21:25
  Speaker 1: us about both of those, and congratulations. I know the
• 21:27
  Speaker 1: Chevy Bolt was named North American Car of the Year. Yeah,
• 21:31
  Speaker 1: so thank you for that. Yeah. The Bolt ev UM
• 21:34
  Speaker 1: is a vehicle now that we actually bought it here
• 21:36
  Speaker 1: a year ago UM as a concept and said that
• 21:38
  Speaker 1: we would launch it in two thousand sixteen. At the time,
• 21:41
  Speaker 1: we were saying two hundred miles of range at thirty
• 21:44
  Speaker 1: thousand dollars after government subsidies. We actually over delivered on that.
• 21:48
  Speaker 1: We delivered a vehicle with two hundred and thirty eight
• 21:50
  Speaker 1: miles of range UM and we executed it at thirty
• 21:53
  Speaker 1: thousand dollars after government subsidies. The really important thing is
• 21:56
  Speaker 1: I think winning their motor trained carver the year, then
• 21:59
  Speaker 1: winning North America can carver the year. It's not just
• 22:01
  Speaker 1: a great electric car, it's a great car period and
• 22:04
  Speaker 1: so we're very, very proud of the team for executing
• 22:07
  Speaker 1: that vehicle and it gives us a leadership position. So
• 22:09
  Speaker 1: who is the buyer of this car at this point? Yeah,
• 22:12
  Speaker 1: that's that's a great question. So the reason the thirty
• 22:15
  Speaker 1: thousand dollars is so important is that is at the
• 22:18
  Speaker 1: price of this car. And just to be clear, this
• 22:21
  Speaker 1: is a long range electric vehicle and the objective is
• 22:24
  Speaker 1: to be in an affordable price. Correct. And the reason
• 22:26
  Speaker 1: thirty thousand dollars is important is that hits the midpoint
• 22:29
  Speaker 1: of the US consumer today. So the midpoint of the
• 22:32
  Speaker 1: range where people are buying is thirty thousand dollars, So
• 22:35
  Speaker 1: it's right into the mainstream market. That's why it's so important.
• 22:38
  Speaker 1: And who's going to buy this vehicle? Um, we think
• 22:41
  Speaker 1: that with that amount of range, it takes range anxiety
• 22:44
  Speaker 1: off the table. We think there could be a widespread adoption.
• 22:48
  Speaker 1: Do you think about how many automobile companies and how
• 22:51
  Speaker 1: many offerings there are. I believe there were over three
• 22:53
  Speaker 1: hundred combinations you could get this year alone, and of
• 22:57
  Speaker 1: course not everyone is a big seller. Do you see
• 22:59
  Speaker 1: any consuler station increasing in the automobile industry? Um, that's
• 23:03
  Speaker 1: a that's a board question. I would say a general motors,
• 23:07
  Speaker 1: we're actually consolidating with ourselves were we were a big,
• 23:10
  Speaker 1: big global company, but in fact in the past we've
• 23:13
  Speaker 1: operated putty independently from each other. But going back to
• 23:17
  Speaker 1: the that's that's still relate to let's say the Buick division,
• 23:20
  Speaker 1: which really is a success story in China. That's a
• 23:24
  Speaker 1: great example. So you know, the things that we're doing
• 23:26
  Speaker 1: in the US, like the bold E v Um, we're
• 23:29
  Speaker 1: able to then use that and transfer that knowledge and
• 23:32
  Speaker 1: technology to give it global scale. And so no, I
• 23:35
  Speaker 1: don't think there's anything on the cards right now from
• 23:37
  Speaker 1: our perspective, but we're doing a lot of work to
• 23:39
  Speaker 1: make sure around the world that we're staying as common
• 23:42
  Speaker 1: and as as as similar as we possibly can. You know,
• 23:44
  Speaker 1: we've talked to a number of analysts who said that
• 23:46
  Speaker 1: the auto industry just in general has been plateau ing
• 23:49
  Speaker 1: after a number of years of pretty rapid growth over
• 23:51
  Speaker 1: the next three years. Do you expect some kind of
• 23:54
  Speaker 1: decline or do you think that we're just going to
• 23:56
  Speaker 1: stay at the sort of plateau. Yeah. I always smile
• 23:58
  Speaker 1: when people say it's plateauing. It's plateau ing at the
• 24:01
  Speaker 1: highest level we've ever seen. Last year was another all
• 24:04
  Speaker 1: time record, not a bad time exactly. So look as
• 24:08
  Speaker 1: we look into seventeen, we think the market is going
• 24:10
  Speaker 1: to be very strong again. Um, it will either be
• 24:12
  Speaker 1: another record, it will be very close to it. So
• 24:15
  Speaker 1: we're expecting a very very strong two thousand side. And
• 24:17
  Speaker 1: do you think that it will be largely composed of
• 24:19
  Speaker 1: trucks the way that it has been Obviously trucks and
• 24:22
  Speaker 1: SUVs have obviously been driven by the lower fuel prices.
• 24:26
  Speaker 1: We expect fuel prices to stay pretty much where they
• 24:28
  Speaker 1: are today through seventeen. So yes, we think that you'll
• 24:31
  Speaker 1: see that continued growth. All right, Thank you so much.
• 24:34
  Speaker 1: Alan Beatty, executive and vice president president of North America
• 24:38
  Speaker 1: of General Motors, here with us at the International Auto
• 24:42
  Speaker 1: Show in Detroit. Thanks for listening to the Bloomberg P
• 24:51
  Speaker 1: and L podcast. You can subscribe and listen to interviews
• 24:54
  Speaker 1: at iTunes, SoundCloud, or whatever podcast platform you prefer. I'm
• 25:00
  Speaker 1: him Fox, I'm out there on Twitter at him Fox.
• 25:03
  Speaker 1: I'm out there on Twitter at Lisa Abramo. It's one
• 25:06
  Speaker 1: before the podcast. You can always catch us worldwide on
• 25:09
  Speaker 1: Bloomberg Radio