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Home » GM Gets Ready for a Post-Car Future

GM Gets Ready for a Post-Car Future

May 29, 2018
Fortune

According to American Heritage magazine, in 1900 health officials in Rochester, N.Y., estimated that the city’s 15,000 horses produced enough manure to make a 175-foot-high, one-acre-round pile every year. By 1930 the American horse population had dropped to 19 million. And by 1960 the country had just 3 million horses. The horse had been fully displaced as the dominant mode of transportation by a new technology that was both more powerful and less prone to produce manure — the horseless carriage, a.k.a., the car.

A century later, the question facing automakers like General Motors and Ford is whether their horseless carriages are about to go the way of the horse. We may well have reached, or even passed, “peak car.” A record 17.5 million passenger vehicles were sold in the U.S. in 2016, but that number dipped to 17.2 million in 2017, and it could fall under 17 million this year. Fewer teens and twenty­-somethings get their driver’s licenses: While 92 percent of 20-to-24-year-olds were registered in 1983, just 77 percent were in 2014.

Alternatives to ownership are taking off. In 2017, Uber provided 4 billion rides worldwide. The new generation of passengers has embraced ride-sharing — in cities where Lyft has launched its Line service, 40 percent of its rides are shared by two or more passengers. And gauged by myriad announcements and breathless media coverage, a world of shared electric, autonomous cars — a technology with all the promise of those first “horseless vehicles” — is just around the corner.

A world that buys fewer cars seems to pose a challenge, to say the least, to a traditional auto manufacturer like General Motors. For almost a century, GM has engaged in a single process: building cars and selling them to individuals. It will continue to do that in the short term, but the long term is much less clear. Predicting the ultimate shape of this evolving mashup of auto manufacturers, chipmakers, ride-share network operators, and autonomous software providers is immensely difficult. As Mike Ramsey, an analyst at research firm Gartner who follows this space closely, tells me: “There are a lot of unknowns.” One thing that everyone acknowledges, inside and outside of GM: The 110-year-old automaker’s halcyon days are long gone, and the future is up for grabs.

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KEYWORDS Automotive Business Strategy Alignment Global Supply Chain Management High-Tech/Electronics Industrial Manufacturing North America Pharmaceutical/Biotech sustainability Technology
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