> A car is a high-margin item, so the impact of even a handful of consumers choosing not to buy must be huge, right?

From GM's latest 10-K filing[1], quickly distilling the past 3 years of consolidated income statements down to its Automotive ex. GM Financial stream:

| (US$ Millions) | 2022 | 2021 | 2020 |
|-------------------|---------|---------|---------|
| Revenue | 143,975 | 113,590 | 108,673 |
| Cost of Sales | 126,892 | 100,544 | 97,539 |
|-------------------|---------|---------|---------|
| Adj Gross Profit | 17,083 | 13,046 | 11,134 |
| Adj Gross Margin | 11.9% | 11.5% | 10.2% |
|-------------------|---------|---------|---------|
| SG&A | 10,667 | 8,554 | 7,038 |
|-------------------|---------|---------|---------|
| Adj EBITDA | 6,416 | 4,492 | 4,096 |
| Adj EBITDA % | 7.4% | 7.5% | 6.5% |

...and Ford for the sake of comparison[2], distilling down to Automotive ex. Ford Credit and Mobility steams:

| (US$ Millions) | 2022 | 2021 | 2020 |
|-------------------|---------|---------|---------|
| Revenue | 148,980 | 126,150 | 115,894 |
| Cost of Sales | 134,397 | 114,651 | 112,752 |
|-------------------|---------|---------|---------|
| Adj Gross Profit | 14,583 | 11,499 | 3,142 |
| Adj Gross Margin | 9.8% | 9.1% | 2.7% |
|-------------------|---------|---------|---------|
| SG&A | 10,888 | 11,915 | 10,193 |
|-------------------|---------|---------|---------|
| Adj EBITDA | 3,695 | (416) | (7,051) |
| Adj EBITDA % | 2.5% | (3.3%) | (6.1%) |

There are at least two major underlying markets at play here: manufacturer-dealer and dealer-consumer.

Recent Bureau of Labor Statistics research paints a colorful picture of market dynamics from 2007-2019[3] where post-GFC increase in domestic competition and the rising cost of manufacturing forced dealers to "innovate" as a way of offsetting new car sales margin decline, which set the stage for 2019-2022[4] where manufacturers largely internalized an outsized supply chain squeeze while dealers gouged the shit out of consumers. So when you say "high-margin", I think you're looking in the wrong bucket.

Then there's GM Financial segment sitting on a $65.322B retail finance receivables portfolio[5] of which 27.2% are sub-680 FICO consumers, and carrying $96.854B of debt[6]...nevermind rising interest rates, increasing layoffs, and a looming credit crunch. Remarks like:

>> In 2021, GM Financial redeemed $1.5 billion in aggregate principal amount of 5.20% senior notes due in 2023. The redemption resulted in a $105 million loss on the early extinguishment of debt.

...buried in page 76 of the fine print suggests internal bleeding damage control.

> How does this business decision make sense?

It doesn't make sense because you're thinking about it from the perspective of consumer optionality based on today's trend, not as a publicly traded business balls deep in competition looking forward.

Considering GM's top 2 selling vehicles are trucks[7] (Silverado = 33.8% of 2022 Chevy units sold; Sierra = 46.7% of 2022 GMC units sold)---and speculating on the retention quality of consumers who would readily classify CarPlay integration as "not negotiable", choosing to overweight an accessory feature that X competitors may also offer over other characteristics/intangibles salient to GM products---I begin to question both the net value prop and opportunity costs being wholesale handed over to Apple.

[1] https://www.sec.gov/Archives/edgar/data/1467858/000146785823...

[2] https://www.sec.gov/Archives/edgar/data/37996/00000379962300...

[3] https://www.bls.gov/opub/mlr/2022/article/automotive-dealers...

[4] https://www.bls.gov/opub/mlr/2023/article/automotive-dealers...

[5] https://www.sec.gov/Archives/edgar/data/1467858/000146785823...

[6] https://www.sec.gov/Archives/edgar/data/1467858/000146785823...

[7] https://www.caranddriver.com/news/g39628015/best-selling-car...