- Munger says long-lasting cars, cultural shifts pressure demand
- Industry shows signs of being `very commoditized,' Munger says
Charles Munger, the vice chairman at Warren Buffett’s Berkshire Hathaway Inc., said General Motors Co. faces pressure from rivals in a market that may contract.
“It may be a very good investment, but the auto industry is about as brutally competitive an industry as I’ve ever seen,” Munger, 92, said Wednesday when asked about the GM stake built by Berkshire money manager Ted Weschler. “The auto industry is not a cinch.”
GM Chief Executive Officer Mary Barra has been seeking to turn around the automaker after it was forced to recall millions of cars, sparking legal battles against the company. The stock has plunged 19 percent this year, after slumping about 3 percent last year and 15 percent in 2014.
Munger said cars last a long time, reducing demand for new sales. Speaking at the annual meeting of his Daily Journal Corp. in Los Angeles, he also said that changes in culture may limit auto ownership.
The industry has shown signs of being a “very commoditized, difficult, super competitive market,” Munger said. “And it may shrink one of these days.”
“If all the cars run around without drivers, it’ll be bad for Geico,” Munger said, noting that he thinks that change will happen quite slowly.