2 Revolutionary Developments That Should Change Your Investing Thesis on Ford and General Motors
Here's exactly what investors need to know about Ford and GM's path ahead with software-like margins and a rapidly growing overseas threat.
Ford and General Motors stand as two formidable players in the automotive industry. Ford is renowned for its attractive dividend, which currently stands at approximately 5%, and GM has been making strides by acquiring shares, thus reducing its share count and boosting its stock price. However, two significant developments loom on the horizon - one positive and one negative - that will shape the future of these companies.
One uplifting development is the growing emphasis on monetizing the software and digital services integrated into vehicles. GM has already begun this process by offering an eight-year subscription for its OnStar Basic service and a three-year subscription for Super Cruise-equipped vehicles, generating substantial revenue. Ford, on the other hand, is concentrating on monetizing its digital services through its commercial business, Ford Pro, which has become a cornerstone of its business strategy.
The looming threat comes from the rapid expansion of Chinese automakers, who are making significant inroads into the global market. Their technological advancements, reduced development time, and competitive pricing pose a serious challenge to traditional automakers. Despite this, Ford and GM have shown remarkable resilience and are poised to navigate these challenges.
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