DETROIT & WILMINGTON, Del. - General Motors Co. (NYSE: NYSE:GM) has announced a partnership with Barclays US Consumer Bank, designating Barclays as the sole issuer of GM's Rewards Mastercard (NYSE:MA) and Business Mastercard in the United States starting in the summer of next year.
The collaboration aims to enhance customer loyalty and engagement for GM, which boasts the largest customer base among U.S. automakers and has topped industry loyalty rankings for nine years running, as reported by S&P Global Mobility. The GM credit card program, established in 1992, is one of the longest-running cobrand credit card initiatives in the country.
The partnership will allow GM Rewards cardmembers to earn and redeem rewards on GM's product lineup, including new electric vehicles, vehicle servicing, and accessories. Barclays and GM are preparing to relaunch the card with new benefits and exclusive experiences for cardmembers.
GM's Executive Vice President and CFO, Paul Jacobson, expressed enthusiasm about the partnership, highlighting the potential to reward loyal customers, particularly in the context of GM's expansion into electric vehicles. Denny Nealon, CEO of Barclays US Consumer Bank, echoed this sentiment, emphasizing the opportunity to create a leading credit card product that delivers value for customers and supports GM's business objectives.
The deal is part of Barclays' strategy to expand its credit card portfolio in the U.S. by partnering with top American brands, a plan that was outlined in February. As part of the agreement, Barclays will acquire the card program's receivables from the current issuer next year.
Current My GM Rewards cardmembers will continue to earn rewards until the transition, at which point they will receive instructions for activating the new GM card issued by Barclays. The cards will remain part of the Mastercard network, offering additional benefits to cardmembers.
This partnership is based on a press release statement and is part of GM's broader efforts to lead in transportation innovation and transition to an all-electric future.
In other recent news, General Motors (GM) continues to make strides in its operations and financial outlook. Evercore ISI maintains an Outperform rating for GM, highlighting the automaker's robust earnings projection for 2024, which surpasses the current consensus. This optimistic outlook is attributed to an anticipated decrease in electric vehicle (EV) losses and a potential increase in variable profit growth. The firm also acknowledged GM's efforts to streamline its operations, leading to profitability improvements in non-T1 products.
Recent developments reveal GM's commitment to the EV market with the launch of the GM Energy PowerBank. This home energy storage solution targets EV owners, offering a way to store and transfer solar energy. RBC Capital has upheld its Outperform rating on GM shares, noting the company's leading EV strategy and efforts to reduce battery costs.
Amid these positive developments, GM faces potential challenges. Former President Donald Trump has proposed imposing tariffs well over 200% on vehicles imported from Mexico, which could significantly impact the automotive industry. Additionally, United Auto Workers (UAW) President Shawn Fain has expressed concerns about potential job losses if Trump revokes the Inflation Reduction Act and its provisions for EV investments. Despite these uncertainties, GM continues to demonstrate resilience and adaptability in the face of evolving market conditions.
InvestingPro Insights
General Motors' partnership with Barclays for its rewards credit card program aligns well with the company's strong financial position and market performance. According to InvestingPro data, GM's market capitalization stands at $53.8 billion, reflecting its significant presence in the automotive industry.
The company's focus on customer loyalty through this credit card initiative is supported by its solid financial metrics. GM's revenue for the last twelve months as of Q2 2023 reached $178.09 billion, with a revenue growth of 4.93% over the same period. This growth trajectory suggests that GM's strategies, including the new credit card partnership, are contributing to its overall financial health.
InvestingPro Tips highlight GM's strength in the market. The company is trading at a low P/E ratio of 5.42 relative to its near-term earnings growth, indicating potential undervaluation. This could be particularly attractive for investors considering GM's expansion into electric vehicles and its efforts to enhance customer engagement through initiatives like the Barclays partnership.
Moreover, GM's profitability is noteworthy. The company has been profitable over the last twelve months, and analysts predict continued profitability this year. This financial stability provides a solid foundation for GM to invest in customer-centric programs like the rewards credit card.
It's worth noting that InvestingPro offers 9 additional tips for GM, providing investors with a comprehensive view of the company's prospects. These insights can be valuable for those looking to understand the full impact of GM's strategic moves, including this new credit card program, on its long-term financial performance.
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