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By Nathan Gomes and Joseph White
(Reuters) – Top executives at General Motors and Ford on Tuesday offered an upbeat outlook for the U. S. auto market and its profit plans, while demand from U. S. customers remained strong.
GM Chief Financial Officer Paul Jacobson said car sales in March “looked strong” after a strong February, while GM’s incentives waned.
“Overall, it’s been a very, very smart start to the year and we’re pleased with our trend,” Jacobson said. GM had planned a 2 percent to 2. 5 percent price cut, but this year, GM hasn’t noticed any value. reduction. ” Demand is pretty strong,” Jacobson said.
Ford Chief Financial Officer John Lawler reaffirmed the company’s full-year profit outlook of $10 billion to $12 billion. “Things are pretty good” in the U. S. market and costs are holding up longer than expected, he said.
However, demand for electric cars is “much lower than anticipated,” Lawler said. Ford has scaled back production plans for its electric cars and will “match capacity to demand,” he said.
Lawler said Ford has a team of “offices” running a new cheap EV architecture that can serve as the basis for sedans, SUVs and pickup trucks, providing the interior area of a mid-length Explorer SUV in a vehicle the length of a smaller Escape on the outside.
The low-cost vehicle program, designed to compete with China’s BYD and Tesla, is key to reversing losses at Ford’s vehicle unit, which are expected to be $5 billion this year, he said.
Ford’s electric vehicle business will eventually have to “stand on its own” and generate profits to secure long-term investments, Lawler said.
GM shares rose 1. 3 percent, while Ford fell 2 percent.
Former U. S. automakers, which rely heavily on sales of giant pickup trucks and SUVs, have been stuck on increased spending such as electrification of their lines and volatile demand for battery electric vehicles.
GM also expects to achieve its goal of reaching an annualized production rate of between 200,000 and 300,000 electric vehicles by the end of the year.
GM has had to contend with expenses and hurdles similar to those of its Cruise self-driving unit. “We still see a lot of promise in this sector,” Jacobson said.
At Ford, Lawler said the automaker will leverage demand for its hybrid models “as a component of that bridge over the next five years. “
By contrast, Chrysler’s parent company, Stellantis, announced earlier this month that it would lay off about 400 U. S. workers in an effort to cut costs, power and boost its plans to produce electric vehicles.
(Reporting by David Shepardson in New York, Joseph White in Detroit and Nathan Gomes in Bengaluru; editing by Pooja Desai, Keith Weir and Nick Zieminski)