Welcome to the Daily 5 report for Thursday, Jan. 30.
No, it wasn't your imagination. No, you weren't living in an insular automotive industry echo chamber. Our industry really is the most disrupted of all industries. At least that's the conclusion of a comprehensive global survey of 3,200 executives conducted by consultancy AlixPartners.
As Pete Bigelow reports today, this year's survey marks the first time in the history of the consulting firm's annual disruption index that automotive has risen to the top of the list. The industry scored a 76.7 on the firm's 100-point scale, a 4.7-point jump from last year. Automotive eclipsed media and entertainment for the top spot, Bigelow reports.
AlixPartners found that 4 in 10 executives from automakers, suppliers and dealers expect their business model will change in the year ahead because of disruptive forces.
"There's such a monumental change in how business is being done," Stephen Tapley, a partner in AlixPartners' automotive industrial practice, told Automotive News.
Of course, the most profound change in the automotive world is technology.
Industry leaders continue to grapple with how to make new technologies accessible to the widest range of drivers — from early adopter tech nerds to technology hating luddites. To put it simply, can the industry keep one group of drivers from abusing technology, and can it successfully encourage others to use the technology at all?
A prime example: John Bozzella, the CEO of the Alliance for Automotive Innovation, said today the auto industry needs to better communicate the benefits and limitations of SAE Level 2 driver-assistance systems.
"We should call this technology what it is and not brand it what it isn't," Bozzella said. "In other words, recognize that it is not full self-drive."
Bozzella advocated for better technology education at SAE International's annual Government/Industry Meeting Jan. 30, held alongside the Washington auto show.
In other news, General Motors appears to be finally turning the corner on its all-important China business. Aided by cost cuts, improving sales and a fledgling turnaround, GM said this week its China operations were profitable in the fourth quarter of 2024, ending three straight quarterly losses on an equity basis, according to our story today from our China correspondent, Yang Jian.
CFO Paul Jacobson told analysts the company's income from equity stakes in two Chinese joint ventures tallied $17 million in the fourth quarter, excluding a $4 billion restructuring charge to cover an impairment and various other restructuring moves in China, where business has suffered in recent years. China at one point generated $2 billion a year in income for GM, but executives caution that those numbers won't happen again anytime soon, if ever.
Meanwhile, U.S. dealership group earnings are rolling in this week. Today, Asbury Automotive Inc. reported robust fourth-quarter results as its growth strategy kicked in. Net income surged 132 percent and revenue grew 18 percent. But the news wasn't all good: The retailer recorded $5 million in losses from stores damaged by Hurricane Milton last fall.
That's it for now. Have a great rest of your day.
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— Philip Nussel, online editor
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