GLOBAL ECONOMIC AND AUTO INDUSTRY OUTLOOK

THE GLOBAL ECONOMY IS HEALTHY

AND THAT’S GOOD FOR AUTO SALES

2

3.7% 3.5% 3.6%

2.4%2.0%

1.7%

4.7% 4.5% 4.9%

-4%

-2%

0%

2%

4%

6%

8%

10%

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

GLOBAL GROWTH REMAINS HEALTHY

Source: International Monetary Fund

World

Advanced Economies

Emerging &Developing Economies

IMF Forecast

Real GDP Growth

Y/Y (Pct.)

INFLATION REMAINS CONTAINED…

CPI Inflation versus Central Bank Target

Y/Y % Change

Inflation

Inflation Target

Inflation Target Range

Sources: National Central Banks, Haver Analytics; Calculations: GM Economics Team

0%

2%

4%

6%

8%

…ALLOWING FOR BROADLY ACCOMMODATIVEMONETARY POLICIES

5

Central Bank Policy Rates (%)

Sources: National Central Banks, Haver Analytics. Calculations: GM Economics Team

-0.10 0.00

0.75

1.50 1.75 1.752.38

3.00

4.35

6.006.50 6.75 6.50

7.50

8.25

-2

0

2

4

6

8

10

THE U.S. ECONOMY HAS REACHEDTHE SPEED LIMIT

6

-4%

-2%

0%

2%

4%

6%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

THE U.S. ECONOMY IS STRONG

Sources: National Central Banks, Haver Analytics. Calculations: GM Economics Team

Real GDP Growth

Year Over Year

0%

4%

8%

12%

16%

20%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: Bureau of Labor Statistics

UNEMPLOYMENT IS AROUND HISTORIC LOWS

Jan. 20194.0%

Unemployment Rate

U-6 Unemployment Rate

Jan. 20198.1%

Unemployment Rate

Pct.

Labor Force Participation Rate

Source: Bureau of Labor Statistics

LABOR FORCE PARTICIPATION RATE IS RECOVERINGDESPITE DEMOGRAPHIC HEADWINDS

62%

63%

64%

65%

66%

67%

2006 2008 2010 2012 2014 2016 2018

JAN. 2019:

63.2%

SEP. 2013:

63.2%

TAX REFORM = SIGNIFICANT FISCAL STIMULUS

-300

-200

-100

0

100

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Estimated Budget Effects of Tax Reform

Billions of Dollars, Fiscal Years

Source: Joint Committee on Taxation

Individual

Business

International

Total

U.S. INFLATION IS MODERATE, THE FED IS PATIENT

Source: Federal Reserve Board

Fed Funds Rate

Core PCE Inflation

Fed Inflation Target

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

0%

1%

2%

3%

4%

5%

0 5 10 15 20 25 30 35 40 45

Months After Start of Rate Hike Cycle

Current

1994-95

2004-06

1999-2000

Cumulative Change in Policy Rate During Cycle

Sources: Federal Reserve Board, Haver Analytics; Calculations: General Motors

RATES ARE RISING MORE SLOWLY THAN IN PAST CYCLES

100

105

110

115

120

125

130

Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19

…CONTRIBUTING TO A STRENGTHENING USD

Source: Federal Reserve Board, Haver Analytics

13

Nominal Broad Trade-Weighted Value of the USD

January 1997 = 100

USD Depreciation

USD Appreciation

400%

450%

500%

550%

600%

650%

700%

40%

60%

80%

100%

120%

140%

1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018

Ho

use

ho

ld N

et

Wo

rth

as

% o

f D

PI

Ho

use

ho

ld D

eb

t a

s %

of

DP

I

HOUSEHOLD BALANCE SHEETS ARE IN GOOD SHAPE

Source: Federal Reserve Board

Household Debt as % of DPI Household Net Worth as % of DPI

CONSUMER SENTIMENT IS HIGH

University of Michigan Consumer Sentiment Index

Source: University of Michigan

40

50

60

70

80

90

100

110

120

1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017

HOUSEHOLDS PLANNING TO BUY A VEHICLE STILL HIGH, BUT OFF 2017 PEAK

16

Source: The Conference Board

Plans to Buy a Vehicle Within 6 Months

10%

11%

12%

13%

14%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

12-month moving average, Pct.

17

76%

31%

1%

46%

23%24%

0%

20%

40%

60%

80%

100%

1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017

Car Crossover/SUV Truck

SHIFT FROM CARS TO CROSSOVERS & SUVS ACCELERATES

Market Share (Pct.)

Sources: GM Sales Reporting System

2018

20,000

24,000

28,000

32,000

36,000

40,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Car Crossover/SUV/Truck

Price Increase from 2009Car: 12%Crossover/SUV/Truck: 32%

Average Expenditure on Vehicles, $

TRUCK AND CROSSOVER SPENDING KEEPS RISING

Sources: Bureau of Economic Analysis

2018 U.S. AUTO SALES NEAR RECORD HIGH: 17.7M2019 CONSENSUS: 17.2M

19

8

10

12

14

16

18

20

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

US Industry SAAR (Mil.) US 6-mma SAARU.S. Industry SAAR

Sources: GSRA

0

4

8

12

16

20

1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011

TheRoaring Twenties

Great Depression

First Oil Shock

Second Oil Shock

The GreatModeration

1991 S&L CrisisThe GreatRecession

Auto Sales, Million Units

Sources: Bureau of Economic Analysis; Shading Indicates Recession

LONG-TERM, U.S. AUTO SALES CONTINUE TO TREND UP

CHINA’S SLOWING GROWTH IS STILL AMONG THE FASTEST

IN THE WORLD

21

CHINA’S ECONOMY CONTINUES RAPID BUT SLOWING GROWTH

0%

2%

4%

6%

8%

10%

12%

14%

16%

2006 2008 2010 2012 2014 2016 2018

Real GDP Growth (%) Share of GDP

Source: China National Bureau of Statistics

Manufacturing Industry

Service Industry

35%

40%

45%

50%

55%

2006 2008 2010 2012 2014 2016 2018

CHINA’S GOVERNMENT HAS DRIVEN DELEVERAGING,ATTACKING SHADOW BANKING

China Debt as % of GDP Change In Loans Outstanding, Y/Y (%)

Source: Bank for International Settlements, People's Bank of China

50%

100%

150%

200%

250%

300%

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18

Ye

ar-

ove

r-Y

ea

r C

ha

nge

Bank Lending Shadow Bank Lending Corporate Bonds

20

22

24

26

28

30

-30%

-20%

-10%

0%

10%

20%

30%

40%

Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19

Re

tail

Sa

les,

Mil

lio

n U

nit

s

Re

tail

Sa

les,

Y/Y

(%

)CHINA AUTO SALES SHOWED Y/Y GROWTH IN JANUARY AFTER FALLING FOR SIX MONTHS

Retail Sales, Y/Y (%)

Retail Sales 12-mo rolling sum

Source: GM Global Sales Reporting

-100

200

500

800

-3.0 0.0 3.0 6.0 9.0

Re

al G

DP

Gro

wth

(B

illi

on

s)

Real GDP (Y/Y % Change)

EU

U.S.

Indonesia

India

Argentina

China

Countries below include Germany, Canada,

Mexico, Japan, Brazil, and others

G20 Countries; Real GDP=Bubble Size

CHINA REMAINS THE MOST POWERFUL ENGINE OF GLOBAL GROWTH

LET’S LOOK ATTHE RISKS

26

KEEP CALMWE STILL

HAVEOIL

0

50

100

150

200

250

1985 1989 1993 1997 2001 2005 2009 2013 2017

OIL PRICES LIKELY TO REMAIN MODERATEIN THE LONGER TERM

NOV.1985

JUN. 2005

236 Months

WTI (Real, 1985 = 100)

Source: Energy Information Administration

GLOBAL DEBT LEVELS LIMIT CAPACITY TO MANAGE A RECESSION

0 50 100 150 200 250

China

Germany

Canada

U.K.

France

U.S.

G7 Average

Italy

Japan

2007 2018

General Government Gross Debt

G7 Countries and China, % of GDP

Source: International Monetary Fund

45% growth

TARIFF STATUS (as of 2/17) IMPORTS COVERED ($ Bil.)

Solar Panels, Washing Machines In Effect $10

Steel and Aluminum In Effect $45

Tariffs on China In EffectUnder Consideration

$250$267

Automobiles and Auto Parts Under Investigation $360

TARIFFS POSE DOWNSIDE RISKS TO GLOBAL ECONOMY

Comparison of Trump Administration Tariffs by Import Value

Source: Peterson Institute of International Economics, U.S. Bureau of Economic Analysis

NAFTA MATTERS MOSTMEXICO IS THE #1 IMPORT SOURCECANADA IS THE #1 EXPORT DESTINATION

Mexico $53.4 $3.7

EU28 $47.8 $9.3

Germany $23.6 $5.7

Canada $44.6 $27.0

Japan $43.7 $0.0

Korea $15.7 $1.5

Rest of the World $4.8 $24.7

Imports Exports

TotalSource: Peterson Institute of International Economics

Total Car and Truck Trade B I L L I O N S O F U S D

$210.2 $66.2

GLOBAL ECONOMIC OUTLOOK

Global growth remains healthy, but has slowed modestly.

The U.S. economy grew rapidly in 2018, and we expect above-trend growth in 2019. Amid rising risks and uncertainty, the Fed is pausing.

China’s economy has been slowing due to government-driven deleveraging. In the face of U.S. tariffs, the Chinese government is now taking measures to support growth.

Oil prices should remain moderate, barring adverse geopolitical events.

Key risks to global growth: Rising protectionism and policy errors.

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THANK YOU

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