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GM
is expected to report a 7.7% drop in second-quarter net income,
while Ford is expected to post a 10% drop in profit, according
to data from LSEG. GM is scheduled to report its results on
Tuesday and Ford the following day.
The cyberattack-induced outage at CDK forced the retail
technology provider to shut down a key software system used at
more than 15,000 U.S. car dealerships in June, a major sales
month in the industry.
Dealers are estimated to collectively lose about $1 billion
because of the outage, according to consultancy firm Anderson
Economic Group.
A slowdown in growth of EV sales is also making it harder for
automakers such as GM and Ford to boost volumes to levels where
they can drive down costs and hit profitability sooner.
"It can't be expected that established vehicle manufacturers,
who need to make similar investments that a start-up would in
vehicle design and manufacturing facilities, could turn a profit
immediately," said Sam Fiorani, vice president at research firm
AutoForecast Solutions.
Legacy American carmakers are also seeing their EV ambitions
being throttled by cutthroat competition from Chinese EV makers
and Tesla, which have triggered a price war globally.
GM last week declined to reiterate its previously announced
forecast that it would have one million units of EV production
capacity in North America by the end of 2025.
Ford had also outlined plans to use a Canadian plant it had
earmarked for a future electric vehicle to instead build larger,
gasoline-powered versions of its flagship F-Series pickup truck.
Ford previously said it would delay the launch of its new
three-row EVs that would be built at its assembly complex in
Oakville, Ontario to 2027 from 2025. Both Detroit automakers
also reported slower sales growth for the quarter earlier this
month.
Evercore ISI analysts said they remain positive on GM,
particularly over Ford, and expect the Detroit automaker to
guide towards the upper end of their prior full-year forecast.
Investors will look for more details on EV plans as both
automakers have cited consumer demand as a cause for pushing out
forecasts for those vehicles, as well as comments on the impact
of outage at CDK.
(Reporting by Nathan Gomes and Nora Eckert; Editing by Anil
D'Silva)
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