Barra reaffirms GM commitment to new mobility ventures

General Motors won't revisit a merger or acquisition with Fiat Chrysler because it is intent on pushing forward into car-sharing rather than adding brands and vehicles in segments where it is already strong, CEO Mary Barra told analysts Wednesday in New York.

Barra and GM's board of directors studied the potential partnership earlier this year after Fiat Chrysler CEO Sergio Marchionne said his company will need additional resources to keep pace with the capital investment required to compete in an industry facing new entrants, technologies and business models.

"We feel the plan we are executing, especially as we try to disrupt ourselves in areas such as ride sharing and autonomous vehicles, is the strategy that is in the best interest of our shareholders," said Barra, speaking at the Barclays Global Auto Conference. "Why would we sacrifice our commitment to future mobility to double down on the past?"

Last month, Barra said GM has launched "Let's Drive New York," a small-scale service initially available to eligible residents of the Ritz Plaza, a 479-unit luxury apartment building at Times Square. The residents can reserve a vehicle and park in one of 200 parking decks across Manhattan that are owned by Icon Parking Systems. The fleet is small, with only eight Chevrolet Trax small crossovers and two Chevrolet Equinoxes, but GM expects to expand it.

In a separate project, GM next year will introduce a fleet of autonomous Chevrolet Volts on its Warren Technical Center campus for employee use. It also unveiled a concept electric bicycle as it expanded its efforts to provide alternative mobility options.

Separately GM 's joint fuel-cell work with Honda will produce a fuel-cell vehicle by about 2020.

Analysts and some investors worry that such ventures, while necessary to compete against new mobile-app based services such as Uber and Lyft, won't deliver the robust profits generated by large pickups  and SUVs that are again dominating the market for personally owned vehicles.

Could ride-sharing services slow U.S. car sales?

In her presentation, Barra said that GM earned a pretax and pre-interest global profit margin of 7.1% for the first nine months of 2015, up from 5.8% in the same period of 2014.

The automaker's goal is to earn between 9% and 10% globally by 2020 or shortly thereafter.

One analyst pressed Barra to describe more specifically how GM can maintain its financial results as markets evolve that don't require people to purchase individual vehicles priced between $25,000 and $80,000 each.

"For example, with ride-sharing, you can look at it and say there will be less cars used," Barra said. "Or you can look at it as opening new opportunities to reach people who are physically impaired or for one reason or another can't or choose not to drive. Sharing can potentially expand the market."

The U.S. new vehicle market is running at its strongest pace since 2000, and most forecasters are expecting an even better year in 2016. But at some point demand will level off or begin to decline before the end of the decade.

Barra: GM will lead self-driving revolution

Barra said history indicates that the typical downturn in the U.S. auto market has been about 25% from peak to trough. GM's goal is to remain profitable when the downturn comes. For example, it is trying to achieve $5.5 billion in cost reductions and efficiencies from its traditional business by the end of 2018.

Asked when hybrid and fully electrified powertrains will cost the same or less than an internal combustion gasoline engine, Barra said it remains quite a distance into the future.

"But it's not like one line (the cost of gasoline engines) is going up and one line (the cost of battery technology) is coming down," she said. "We're trying to improve the efficiency and lower the cost of our traditional engines. I do think a convergence in cost will happen, and we're going to see a full suite of applications depending on energy prices and the countries where we sell."

Contact Greg Gardner: 313-222-8762 or ggardner@freepress.com. Follow him on Twitter @GregGardner12.