General Motors President Dan Ammann recently sat down with reporters to go over the automaker’s business performance in 2014 and expectations for the coming year. The takeaway: GM is doing well, but 2014 was certainly challenging.
Ammann, 42, previously served as GM’s CFO and assumed the President position in January of this year when Mary Barra was appointed Chief Executive Officer. He expects “more of the same” next year from a U.S. auto market that has been growing slowly, while bracing for continued soft demand in other parts of the globe.
“It’s been more downsides than upsides this year,” Ammann said in an interview with Reuters. “I’d say the U.S. has been a little better than we’d planned, but South America has been more challenging and Europe has been a little slower.”
The updates on GM’s performance in the world’s largest markets — the U.S., China, Europe, and South America — are as follows.
Ammann noted that the U.S. auto market, which is the world’s second largest after that of China by volume, has been stronger than the overall economy, he noted.
New vehicle sales in the U.S. are expected to reach 16.4 million units in 2014, up from 15.6 million in 2013. Industry analysts and other automakers see that number jumping to 17 million or more in 2015. Ammann sees a similar scenario in 2015.
The U.S. has “been on a slow, steady recovery out of a very deep trough a few years back,” he said. “I don’t see it growing enormously from here, but it doesn’t feel overly stretched to me either.”
He also added that the company’s base-line expectations are for U.S. interest rates to rise slowly over time.
Ammann noted that competition in China was “intense” in 2014 and that sales growth there is slowing. He did, however, emphasize that the market is still strong, while maturing.
GM and its joint venture partners sold their 3 millionth vehicle in China on November 14th, 2014. The milestone was reached nearly a month earlier than in 2013, representing the shortest amount of time in history that the 3 million mark was reached.
Amman said that Europe has been “a little softer in this later part of this year than we would have said six months ago.”
The automaker still expects a profit in the region in 2016, the first time in more than a decade.
Most recently, GM posted a 5.7 percent year-over-year drop in sales volume in the European Union in October 2014 due to the discontinuation of the Chevrolet brand in the region. But Opel-Vauxhall, which are now GM’s only mainstream brands in the region, posted an 11 percent year-over-year increase during the same timeframe.
Ammann noted that South America has been a “very difficult place to do business”, adding that Venezuela especially remains unpredictable with its fluctuating currency rates.
Adding to GM’s challenges in 2014 is the infamous ignition switch recall, which prompted a volte-farce of the company’s safety recall procedures, operations, and processes. When asked about GM’s handling of recalls related to defective ignition switches, Ammann said that GM is pleased with how attorney Kenneth Feinberg is supervising the program to compensate victims for deaths and accidents linked to the faulty parts.
On Monday, Feinberg added two more deaths to his list of those eligible for compensation, raising the total approved by him to 35.