Please welcome General Motors Treasurer and Vice President of Investor Relations, Rocky Gupta.
Good morning. I'm Rocky Gupta, Treasurer and Vice President of Investor Relations. I'd like to welcome you to the 2019 General Motors Capital Markets Day. Our press release and presentation materials are available on the GM investor relations website. We're also broadcasting this event via webcast. On the agenda today, you will hear from several of our top leaders who will be sharing our business strategies and our outlook for 2019. We will take a short break after Dan Ammann presents, followed by our financial outlook and a Q&A session. Before we begin, I need to go over some housekeeping. First, safety is a top priority at GM. Please take a moment to look at where the exits are located, so that in case of an emergency, you can get to them quickly. Note our forward-looking statements.
All of the discussions today, including the Q&A, will be governed by this language. It's my pleasure to introduce our Chairman and CEO, Mary Barra.
Well, good morning, everyone. Welcome. It's really great that you're with us here today. I really am looking forward to and appreciate the opportunity to update you on our ongoing work to position GM for long-term success as we continue to aggressively take the necessary steps to make our business more agile, resilient, and profitable. We will discuss our strategy and share our guidance for 2019 and give you a glimpse into the future. This morning, Mark Reuss will provide a deeper look into the dramatic transformation underway in global product development to improve efficiency, quality, and speed to market. He will also share the next chapter of our full-size truck story, reveal our new global vehicle family strategy, reinforce our commitment to Cadillac, and provide more details on our EV strategy.
Matt Tsien, President of China, will talk about the strong foundation for success that we have built in China. He will also talk about the current business environment and the long-term growth potential we continue to see in the world's second-largest economy. Dan Berce from GMF will cover the outstanding performance and strategic benefits of GM Financial as it approaches full captive. Dan Ammann will update you on Cruise and the race toward deploying world-changing autonomous vehicle technology. Cruise is focused on developing a profitable business model for AVs as we move to capitalize on the enormous business opportunity that also supports our mission to create a safer, better, and more sustainable personal mobility future. Dhivya Suryadevara will take us through our financial priorities, the unique aspects of the truck market and the truck market dynamics, and our 2019 outlook.
Also with us today from the General Motors leadership team are Alan Batey, who's the President of North America and Head of Global Chevrolet, Barry Engle, our GM International President, and Steve Carlisle, President of Cadillac. The events of 2018 remind us that our transformation remains a very dynamic process that requires we consistently act with speed and discipline. We will continue to strengthen our core business and aggressively leverage our technology and business expertise to reinvent this industry. We hope you leave here today confident that regardless of the external factors affecting our industry, we have the right strategy to leverage growth opportunities, maximize profits, and improve our performance through the cycle, all to create shareholder value. Because of the actions we have been taking for several years, General Motors enters 2019 leaner, more agile, and positioned to win.
We have demonstrated time and again that we are willing to make tough and strategic decisions to not only meet our commitments, but to secure the company's future. We are not just transforming a company. We believe we have the resources and the resolve to lead the transformation of personal mobility. When we look at the industry today, we see a continuing strong U.S. total industry sales in the low 17-million-unit range. In 2018, we sold more than 1 million crossovers in the U.S. alone and led the industry in total pickup truck sales for the fifth consecutive year. We believe the market in China is well-positioned for long-term growth, even with the recent challenges facing the industry and the economy. We expect 2019 industry sales to be in line with 2018 levels of a nearly 27-million unit market.
China, in 2019, will launch more than 20 new or refreshed models. In addition, we have a very resilient business model in China, and we will continue to remain agile to quickly respond to the changing market dynamics. However, if we step back, we also recognize that there are a number of systemic industry issues that must be confronted if the future of transportation is to be transformed. Things like long product development cycles, excess industry capacity, the need to respond quickly to market preferences changing, and a changing regulatory and trade environment, in addition to pressures on the business results due to volatile commodity costs and FX in certain global markets. At GM, we have been working to look ahead and around corners to address and solve these issues, and we will continue this very proactive focus because we know time is not our friend.
In November, we announced several actions that we are taking to address these issues to reduce structural costs and to generate cash. These were difficult decisions because they impacted people and they impacted communities. We are taking these steps while the company is strong and the economy is strong, and we believe that we have job opportunities for most of the hourly employees in the U.S. and the plants impacted, provided they can relocate. To give you a little more detail on that, in the United States, we are able to provide 2,700 positions to the 2,800 impacted hourly workers. Over 1,500 have already volunteered for these openings, and 700 have already been reassigned to plants. These are plants that have vehicles that are in growth segments.
In GM Canada, we are also supporting the impacted plant employees, working on retraining with local colleges, working with our dealers and more than 20 local employers who have expressed interest in hiring these experienced employees. We will also provide outplacement services to the impacted salaried employees. Our actions build on the previous steps we have taken to position General Motors for the future and the comprehensive business strategy we shared with many of you in 2015. Right now, we are taking actions to consolidate work and talent and compressing our global product development campuses to drive efficiency and to drive speed. We are aligning our product portfolio and manufacturing capacity with customers' preferences for crossovers, SUVs, and trucks over passenger cars focused in the United States. We are transforming our workforce through salaried and executive reductions as we move to an all-electric future.
These actions are also helping us fund the race to lead in the EV and AV technology development, as automakers and tech companies alike compete to unlock new and potentially lucrative revenue streams through mobility services. Let's step back for a moment and look at our core business. While we continue to strengthen and leverage our recent investments in all new crossover SUV and truck architectures, going forward, we will prioritize future vehicle investments in our next-generation battery electric vehicle programs. We are already seeing the benefits of our all-new full-size trucks, our strongest product franchise, and a $65 billion high-margin business. We will realize a full year of benefits from our new light-duty pickups while we introduce all new heavy-duty pickups later this year and gear up for full-size SUV production.
Along with the ongoing launch of the Cadillac XT4, the Chevrolet Blazer SUV, we will introduce the Cadillac XT6 luxury SUV to the portfolio. Over the next 13 months, we will also begin to roll out our all-new global family of compact cars and crossovers to replace several legacy architectures and capture growth in key global markets. We'll start this year in China, then move to Brazil, and then Mexico, and eventually expand to 40 countries across the globe. We expect this modern connected family of Chevrolets and Buicks that will be popular with not only customers and dealers, but also improve transaction prices and overall profitability. These new vehicles also signal that we are still committed to offering the right vehicles in the right markets where we can realize a strong return on our investment.
At the same time we're preparing to launch this global family in China, we also are benefiting from the investment in Cadillac, which is posting record sales and gaining significant share in China's growing luxury segment as more customers gravitate to upscale vehicles. We are fully committed to Cadillac, both in China and in North America, and we are confident about the future portfolio as we work hard to restore its standing as a true luxury brand. One way we'll do this is through technology and innovation. Today, we are announcing that Cadillac will be General Motors' lead electric vehicle brand. This means the first model from our all-new battery electric vehicle architecture will be a Cadillac. Mark will give you a glimpse of Cadillac's strong future. Beyond Cadillac, we are also satisfying the needs of customers through our premium high-margin Denali and Avenir models.
Together, they are contributing to industry-leading transaction prices, even in competitive segments. On average, Denali and Avenir models make up about 1/4 of GMC and Buick volume, with Denali on over half of all Sierra heavy duties and Yukons. Looking at international markets, we are starting to see some of the benefits of our actions in Korea. We are on track with our restructuring plan, and these actions have placed us on a path to enterprise-level profitability. In South America, as you all know, we have restructured the business in recent years and lowered our break-even point by 40%. With Chevrolet as the market leader, we are well-positioned to leverage improvement in the macro environment. However, the business climate there remains a challenge, particularly in Brazil and Argentina, our largest markets in the region. This is driving unacceptable losses that need to be addressed.
We've begun work with key local stakeholders, dealers, suppliers, unions, and government officials to take all necessary actions to generate acceptable returns in the near term or to consider other options. Finally, we continue to focus on less cyclical growth opportunities and adjacencies like GMF, customer care and after sales, and OnStar. With more than 6 million retail customers and industry-leading loyalty rates, GM Financial remains well-positioned for continued profitable growth. In both our core and future mobility initiatives, every business decision we make supports our vision for a world with zero crashes, zero emissions, and zero congestion. We have acknowledged that this is a very ambitious vision, and it will not be achieved overnight. We are already working to continuously improve the safety and efficiency of our products.
These include driver-assist safety technologies that give customers a glimpse of a self-driving future, as well as fuel-saving engines and lighter vehicles. Autonomous and electric vehicles will deliver important societal benefits that support our vision by dramatically reducing collisions and lowering emissions. That is why we are so passionate about getting them to the customers as quickly as possible. You can see that passion today as we build upon the groundbreaking Chevrolet Bolt EV technology to create the next generation EVs that are attainable, desirable, and profitable. We are fully committed to an all-electric future. We are developing this new architecture using consumer insights we have gleaned from our research. We have learned that the sweet spot for range is 300 miles. Styling is a leading consideration. Customers want a variety of vehicle sizes; they don't want to compromise, and charging infrastructure is important.
A substantial number of our new EVs will be sold in China, the world's largest EV market, where government policies encourage rapid adoption. The U.S. market also figures heavily into our commitment to zero-emission vehicles, and we have asked for policy support to speed their rate of adoption. Recently, we called for a national zero-emission vehicle program to support a 50-state solution, promote the success of the U.S. auto industry, and preserve U.S. industrial leadership. Last month, with Nissan and Tesla, we asked Congress to preserve the tax incentives that have helped spur sales of electric vehicles in the U.S. We hope elected leaders will agree that extending these incentives helps support and encourage U.S. innovation.
You can also see our passion in Detroit, San Francisco, and Seattle, where Cruise is tackling some of the most complicated engineering challenges to safely commercialize our Cruise AVs in a dense urban environment. Unlocking the potential of these technologies will take resources and time, we have created important financial and technology alliances with like-minded partners to add value, maximize efficiencies to help us realize our vision more quickly. You'll hear more from Dan Ammann this morning. With all of our actions over the past few years, we believe we have a unique opportunity to strengthen the core business and transform the industry while creating value for our shareholders, that's why we're so excited to share with you today. Let's get started. I'd like to turn things over to Mark Reuss and recognize him in his new role as President of General Motors.
Thanks, Mary, welcome everybody, good morning, thanks for joining us here today. As Mary said, we are moving quickly to transform this company. Nowhere is that more evident than in the GM Global Product Group. In product development, we find ourselves at a pivotal moment, one that sees us making decisions and taking action that will best position us for the long-term success. To achieve what this company is truly capable of and to win, we need to be even more agile and faster to market while maintaining a world-class engineering team. For example, one step we're taking is the integration of our global propulsion systems engineering teams and our vehicle engineering teams. The propulsion engineers are going to be on the same management team as those on the vehicle component side.
We'll have one integrated software engineering group, which will also make us much more agile in development. We are transforming by consolidating work and talent and moving people where we need them to really be and compressing our global product development campuses to emphasize only the facilities we truly need to succeed in the future. Overall, our savings and engineering expenses will add up to about $1.5 billion. Dhivya will talk about the remainder of the savings story when she talks to you in a little bit. That is savings that we earned by investing in all the right things during the up part of the cycle.
Things like mass reduction, taking 4-500 lbs out of each of our architectures on average on each launch, more efficient internal combustion engines on a global basis for all markets, and more efficient nine- and 10-speed transmissions to go along with it, and electrification research, development, and deployment. These investments and others like them allow us to execute vehicle programs using these already proven components and technology, which saves a lot of money. The biggest profit, though, may very well be freedom. The freedom to reinvest, the freedom to develop, and the freedom to create the future as we pivot forward to a full portfolio of electric vehicles. Engineering resources allocated to electric and autonomous vehicle programs will double in the next two years. That's a direct result of everything that I've just described.
We've done all the tooling and the testing for our core products. Now we have those architectures in place for multiple cycles, and the material costs fall away. We'll focus on the areas that customers care about, areas like sheet metal, styling, instrument panels, interfaces, controls, and connectivity. As the current vehicle portfolio is optimized, about 75% of our global sales volume will come from five architectures by early next decade. Those architectures will all be bought and paid for in terms of investment, freeing up even more resources for future EV programs. That doesn't mean, of course, that every last red cent goes to EVs, and I'll talk about EVs a little bit more later. We still have a business to run.
We still have a portfolio to seed and refresh, especially our trucks and crossovers. We still have to return value to our shareholders, of course. It simply means that when we reinvest profits in core products, the ratio in investment will be flipped in favor of future EVs versus internal combustion vehicles of today. Pickups will be carrying a lot of the freight here, as will our full-size SUVs when they arrive. Here I want to highlight a huge competitive advantage for the company, the combined power of Chevrolet and GMC pickup trucks. We revitalized the mid-size truck segment, which helped GM become the best-selling pickup truck company for the five years in a row.
Last year at this time, we outlined our strategy to win in the full-size truck market with more bandwidth, with a strong lineup of models between Chevrolet and GMC, more volume and more manufacturing flexibility to meet demand for profitable crew cab pickups, and then closing the gap in average transaction prices and improving profitability across the entire pickup truck franchise. Overall, with our new pickups, we're just getting started, but things are going even better than we expected. The sell-down of our current generation light-duty pickup trucks is ahead of plan, with lower incentives and higher average transaction prices in the fourth quarter than a year ago. Production at Fort Wayne Assembly in Silao is ramping up ahead of schedule. Our retail share of the light-duty segment has increased every month since August, and our retail share passed Ford F-150 and Ram 1500 in the fourth quarter.
GM has had the highest ATPs in the segment since October. Dealer and consumer reaction to the new trucks has been incredibly strong with more than 30,000 sold so far, the early mix is incredibly strong. More than 90% of the all-new 2019 model year sales in the fourth quarter were, in fact, the crew cab models, and at GMC, more than 70% were the premium Denali and AT4 models. By the end of this month, the majority of the light-duty sales will be all-new trucks. We will be able to satisfy pent-up demand quickly and meet the surge in demand we expect after our national advertising launch, which is starting just this week. If you saw the National College Football Championship, you saw that begin to roll out, but you haven't seen all of them.
You'll see our ads everywhere, and you'll see that they demonstrate product benefits for customers and the emotional bonds formed with our customers. Let's take a look at some examples, starting with two from Chevrolet, and I'm just old enough to know what this song was back then. I won't tell you. It doesn't matter. It's still great. Yeah, I'm getting a little old, but anyway, take a look at the first three here. First two with Chevrolet.
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Those are pretty good, huh? There's another one here from GMC that you wouldn't have seen yet either, in most cases. It really showcases the GMC exclusive MultiPro Tailgate, which is industry first. This is pretty fun too. Alan, you and your team have done a great job. Congratulations. Here we go.
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Pretty cool, huh? A little bit of fun on the last one, but, yeah, we'll take it. A little bit later here this year, we'll start firing up our all-new Silverado and Sierra HDs. You've probably seen this one a little bit here, because when we showed it here, we got a great response. These trucks have really been scaled for big, heavy-duty use, but they share a lot of the engineering and manufacturing innovations of their smaller siblings, such as the largest beds in segment, carbon fiber truck beds with GMC, more interior volume, and new propulsion technologies, and lighter mass. We shared, again, the first ones of the Silverado here in December, and it was a tremendous response. It's big, it's bold, exactly what heavy-duty truck customers want.
Within hours of releasing the first images, we had a ton of customer emails asking when they could buy the new truck. We'll have more information on the Silverado HD and the reveal of the GMC HD very, very soon. Again, these new HDs begin production this summer, and we stagger the launches, of course, of the light duties, the heavy duties, and the SUVs. I think our attention to quality at these launches is a great track record of execution, and we'll keep that cadence to be able to do that. Speaking of the SUVs, the all-new versions are right around the corner. By the way, that GMC looks pretty darn good, doesn't it? No one's seen that before. You can see the scale difference between the lighter light-duty truck and the heavy-duty truck.
Let me remind you that no one else is successful as GM in the SUV segment. We have owned the segment since 1935, when Chevrolet created the first Suburban. Today, led by Chevrolet, the company has more than 70% of retail share in the segment, and the Cadillac Escalade has twice the retail share of the brand new Lincoln Navigator. For 20 years, the cornerstone of the Cadillac lineup has been Escalade, which still dominates its segment. It is a cultural icon synonymous with bold styling, especially right here in New York. That won't change when the new version hits the streets. Its interior will blend technology with style that will set a new standard for innovation, and it's never been done in the industry in some cases. Let's take a look at this.
Again, no one has seen this before, and I believe that you'll be very excited around what Cadillac is and what it's becoming. Let's roll the Escalade animation. That's really exciting. I don't know if some of you went to CES here this last week, but CES shows a lot of things of what could be. I think you'll find that this Escalade that you just saw is actually doing those things, and some of those things for the very first time in an automotive environment. This puts an exclamation point on our utility portfolio. This next sports sedan will begin defining a new generation of Cadillacs in a different way. Let's roll the sedan. That's pretty darn exciting stuff.
I tell you what, Cadillac is poised to become the luxury leader that it is always meant to be, and we are 100% committed, as Mary said, to making that happen. Its current lineup is doing better than many people realize. In fact, the all-new XT4, which I happen to be driving right now as we launch itLeads its segment after a couple of months in the retail environment, and XT5 is our best-selling global vehicle. We're seeing retail share growth in four out of our five segments right now. In fact, 2018 was, in fact, the best sales year in Cadillac's 116-year history. Things will get even better for the brand beginning next year, when we start to roll out Super Cruise across the whole Cadillac lineup.
We have big plans for the brand, and I'll share more of that a little bit later in our BEV presentation. Beyond Cadillac, we're also excited about the first returns on another major product investment coming later this year, very shortly in fact. We're getting ready to launch a global family of vehicles, first in China and then South America, then Mexico, including many markets where cars are still very important, such as Brazil, where the B segment car is nearly 50% of the industry. Among the first entry coming this year is the Chevrolet Tracker. Together, this family of vehicles will simplify what has been a very complex global portfolio and will help us capitalize on growth in these very key global market segments. By 2020, this family and this architecture will represent one in 10 GM vehicles globally.
By 2023, it will represent one in five GM vehicles. Just, really, I think, if you think about it here, at the end of this, it will make up 75% of our volume in South America and 20% in the largest market on Earth, in China. Just to drive home the point about the complexity that goes away, the new B segment car will replace six legacy models. That's a lot when you think about that. Within the first 13 months, we will launch eight regional variants across five different body styles. These will include multiple entries of Chevrolets and Buicks across a wide variety of high-volume segments, from sedans to crossovers and even more. These vehicles will be efficient, affordable, fun to drive, and they'll include the latest connectivity and safety technologies, many of which will be new to these customers and these markets and these segments.
They will make life easier for dealers and suppliers as well because everything will be streamlined and simplified compared to what we have today with all of our old legacy architectures. Leveraging the scale of our supplier base and sharing components during development will maximize efficiency and minimize costs. As a result, we expect these vehicles will really strengthen our profitability. We're talking about transforming the company, and these vehicles will be rolling symbols of our drive to do things differently and efficiently, and we can't wait to see the first ones on the road in China just a little bit later this year. Now speaking of China, Matt Tsien is our senior leader who leads our incredibly successful and powerful China operations, and a good friend. Matt, he's going to update you on what's going on right here today.
Thank you very much, and let me introduce Matt Tsien.
Thank you, Mark. Good morning, everyone. It is a pleasure to be with you. I would like to give you an update on GM's operations and performance in China and share with you where our company is headed in the world's largest vehicle market. GM has established a strong foundation for success in China. We have benefited from our two-decade-long partnership with SAIC, which is among the strongest in the industry. SAIC brings deep knowledge of the market. Over the years, we've developed a common focus on customers and product excellence. Importantly, we've taken advantage of our growing strength in joint ventures and joint efforts to create a portfolio of winning joint ventures with a highly competitive cost structure. We have five well-established brands that cover all key segments, including luxury vehicles, SUVs, MPVs, and new energy vehicles, or NEVs, in top-tier as well as lower-tier cities across China.
The diversity in products, combined with our highly competitive cost structure, has enabled us to mitigate some pricing pressures in different segments and maintain consistently strong results. We have successfully leveraged our world-class engineering presence with our PATAC automotive engineering and design joint venture and have benefited from a rapid product launch cadence across segments. This year, we plan to deliver a record of more than 20 new and refreshed products in China.
Notably, Cadillac is the fastest-growing luxury brand in China. 2018 was Cadillac's third year of double-digit growth in the market, with sales topping 200,000 units for the first time. The brand is attracting young customers with an average age of 32, which is even younger than the average luxury market age of 35. We believe Cadillac will continue its strong momentum in China following the global introduction of one new model every six months through 2020.
After two decades of significant growth, the vehicle market dynamics in China are changing. The challenges we and many other automakers in China are facing include a vehicle market that has slowed as the industry matures and faces macroeconomic headwinds. Recent declines that have been more significant in Tier 3-5 cities versus Tier 1-2 cities, which have had a greater impact on our volumes relative to our financial performance, given the higher levels of sales of lower margin Baojuns and Wulings. Continued price pressures across segments as the market slows and the competitive landscape intensifies. GM and our joint ventures are taking actions to mitigate the impact of these challenges. We've continued to pursue very effective cost-down, efficiency-up initiatives that are generating cost savings across the business.
For example, we're leveraging global sourcing efforts and local suppliers to reduce material costs, adopting automation and new technologies to improve manufacturing efficiency, leveraging global platforms, and integrating global engineering resources with our local capability to achieve more efficient product development. We're optimizing our mix with our new product launches focused on luxury and bigger vehicles for larger family sizes. We're focused on adjacencies. They include after sales with ACDelco, automotive finance through SAIC-GMAC, insurance through Insight, connectivity with Shanghai OnStar, and financial leasing through our new SAIC-GMF leasing joint venture. GM is well-positioned in all of these areas, given our early investments. We've also conducted industry downturn analysis. As part of these efforts, have identified further actions to take should the market downturn continue over an extended period of time.
Overall, GM is in a good position to mitigate the headwinds and to capitalize on the tailwinds in China. Let's start with the headwinds. We are seeing a near-term industry downturn. Retail sales are expected to finish below 27 million units in 2018, compared to more than 28 million units the previous year. We expect sales to be relatively flat in 2019 versus 2018. As I mentioned in the previous slide, we continue to face pricing pressures. We are also seeing increasing regulatory pressures. Particularly challenging are the rising fuel economy standards requirements for NEVs, as well as the pull-ahead of the new China 6 emission standards in key regions. We monitor the geopolitical environment and trade tensions closely. This has not had a material impact on our sales in China to date, due in large part to our highly localized footprint.
Finally, the weakening of the RMB relative to US dollar has had a negative impact on the translation of our earnings into US dollars. Despite the headwinds, we are optimistic about the China market and GM's continued performance in China. GM's in a strong position in terms of our brands, which has enabled us to maintain a market share of about 14%. Our brands will continue to progress in line with growth in personal incomes and consumers' pursuit of upgraded products and experiences. The more than 20 launches in 2019 represent the strongest mix of products we have ever brought to China, with about half of them all new nameplates. We continue to have a laser-like focus on cost in all areas of the business, and we are bullish on the opportunities for growth in adjacencies that I mentioned earlier. A key focus of the Chinese government is electrification.
China is playing a key role in our company's global strategy for an all-electric future. China was the largest NEV market in 2017, with sales surpassing 700,000 units. In 2018, sales exceeded 1 million units. By 2025, 20% of all vehicles sold in China are expected to be NEVs. GM's on track to launch 10 NEV models in China between 2016 and 2020. We plan to double that number over the ensuing three years with the launch of GM's global electric vehicle architecture that Mark mentioned earlier. Our growing scale and portfolio in China will support GM's position as a global leader in NEVs. This slide shows you some of the products that have already entered our lineup, or that we will be expecting to begin offering soon. By the end of last year, GM's electric vehicle customers in China reached 200 million real-world electric kilometers driven.
GM's operations across China are a key part of GM's global operations. We anticipate a retail market of over 30 million units in China in the coming years, given the still comparatively low vehicle penetration of around 140 vehicles per 1,000 people, versus about 800 vehicles for every 1,000 in the U.S. We believe GM has long-term growth potential in China with a fully competitive portfolio of three top-tier global brands and a pair of established local brands. We have a strong and growing presence in all key segments. We also have a strong presence in almost all cities across China. We have built world-class engineering capabilities and expertise through PATAC and our wholly owned GM China Advanced Technical Center. We are engaged in co-development in global programs and China-specific programs, including electric vehicles.
We're leveraging our local capabilities globally, such as our cost competitiveness, our scale, and our well-established base of local suppliers. In summary, we have a resilient and agile business model in China that we will continue to leverage to capitalize on future growth opportunities. I'd like to turn it over to my colleague, Dan Berce. He's going to give us an update on GM Financial. Thank you very much.
Thanks, Matt. Good morning. Let me start off by providing a bit of context and history on GM Financial. GMF is GM's global captive finance company, contributing both strategically and financially to the enterprise. Prior to being acquired by GM in 2010, we operated as a public company, AmeriCredit Corp, for 18 years. After the acquisition, our mandate was to ensure the availability of competitive products in the U.S. and Canada for GM consumers and dealers in more difficult-to-finance areas, such as subprime and leasing. In 2013, we expanded globally, as the map on this slide shows, with the acquisition from Ally Financial, which was the former GMAC, of all of their auto finance businesses outside the U.S. and Canada.
We broadened our product lines to include a full spectrum of consumer loans and leases and dealer financing starting in 2014, became the exclusive lease and submitted loan provider to GM in the U.S. shortly thereafter. As GM's full captive, our value proposition is now centered around four key tenets. Number one, to drive vehicle sales. Number two, to enhance customer experience and loyalty. Number three, to support customers and dealers across economic cycles. Finally, to contribute to enterprise profitability and cash flow. I'll elaborate on each of these tenets in the following slides. Today, GMF has operations that cover 90% of GM's global sales footprint and earning asset base of nearly $100 billion, and we have over 6 million customers worldwide. Let's look at each of the tenets of the captive value proposition, starting with vehicle sales.
Beyond offering competitive products and services and actively supporting GM sales initiatives, GMF supports vehicle sales in many ways. We offer multiple programs that provide over 100,000 leads per month to dealers. Our online credit application, available on GMF, GM brand, and dealer websites, our direct mail offers, for example, identify qualified potential customers for dealers. In addition, whether it is close to lease maturity, when a loan is being paid off, or when a vehicle is in equity, we're in the position to know when one of our customers may be in the market for a new vehicle, we proactively facilitate new vehicle opportunities between the consumer and the dealer. Importantly, we have historically proven expertise to underwrite loans and leases across the credit spectrum, which facilitates incremental sales. A key measure of our success is our penetration of GM retail sales.
Consistent with other full-line captives, we target finance penetration of GM retail sales in the 50%-60% range. Over the last several years, we have realized substantial growth in our retail penetration, reaching 47% through the first nine months of 2018. Finally, we are well-positioned to support GM's mobility initiatives, both now and in the future. We currently provide an attractive leasing option for electric vehicles, and we finance Maven's ride-sharing fleet. Our strong balance sheet positions us to offer financing for autonomous vehicle fleets for GM Cruise in the future. An important part of our role as the captive is the impact we have on customer experience and loyalty. GMF provides a multi-channel customer service experience designed to maximize convenience while promoting efficiencies. We have built strong customer support programs centered around voice of the customer feedback and first call resolution.
We designed and rolled out a robust end-of-lease term process, providing multiple touchpoints with the consumer. This process is fully integrated with GM's marketing efforts and is designed to guide the customer through the end-of-term experience and drive them to a GM dealer for their next lease vehicle. As noted on the slide, GMF has industry-leading manufacturer loyalty rates in the U.S., higher than every other captive lender since 2016. A key value driver, we ranked higher in loan and lease loyalty when compared to the combined GM manufacturer loyalty rates for all third-party providers of GM vehicles over the same time period. The GMF experience drives customers back to the dealership, supporting sales and earnings for GM. GMF's strong financial position provides the capability to support GM customers and dealers across economic cycles.
We had available liquidity of $25 billion at the end of the third quarter, providing the capital to support loan and lease originations in light of capital market disruptions. GMF has committed credit facilities with 30 global banks, providing $26 billion in available funding. Our funding strategy is to fund locally, when and where markets allow, to minimize currency risk. We operate five public securitization platforms in North America and multiple global senior notes programs. Currently, over 50% of our debt is unsecured, leaving unencumbered assets that can be pledged in a downturn to generate liquidity. Our leverage is running below our managerial target of 10 x, which is based on our asset composition. We expect to manage within this limit in order to support our additional growth as well as our dividend payout. Lastly, we have rigorous and tested underwriting expertise and a prudent residual value management process.
Given our legacy, we have experienced underwriting and managing across the credit spectrum and economic cycles. AmeriCredit survived the last downturn utilizing prudent data-driven underwriting and servicing processes that we continue to build on. We utilize third-party guides, supplemental by our internal models to set residual values at origination and measure mark-to-market adjustments on our existing leased assets. Our remarketing process is data-driven and efficient. We market and sell vehicles both online and at physical auctions, optimizing the proceeds we receive on each vehicle. GMF certainly benefited from stronger than expected used vehicle prices in 2018. 2018 prices ended up to be fairly flat with 2017. Our 2019 depreciation schedules currently reflect an expected 4%-5% drop in used vehicle prices based on the composition of the vehicles in our lease portfolio.
Our forecast is partially based on the fact that industry supply of off-lease vehicles will peak sometime in 2019. As GMF has evolved into its full captive role, so have our financial contributions. We have generated solid earnings growth to date, more than doubling our earnings since 2014, and we are on track to contribute approximately $2 billion in pre-tax earnings when we reach steady state sometime in the early 2020s. Outside of the international acquisitions in 2013, all of our growth has been self-funded. In Q4 2018, we initiated an annual dividend to GM. We expect to dividend substantially all of our earnings when we reach steady state, subject to managing within our leverage managerial targets. Dhivya's going to address this later in her remarks. We are now achieving a standalone ROE in the low to mid-teens, which is appropriate for our asset composition and leverage levels.
When GMF standalone financial results are combined with the captive benefits realized at the auto company, the total contribution is within GM's ROIC-adjusted thresholds. GMF is well-positioned to support GM, its consumers, and its dealers, both strategically and financially. We are contributing today and are well-positioned to contribute in the future. With that, I'll turn the presentation back over to Mark Reuss.
Thanks for all you do. I promised I'd come back and thank you, Dan. Thanks for all you guys do to make us really successful. It's really important, so thank you very much. I'd like to expand more on some of the things I mentioned earlier, namely the electric vehicle program that's going to help us really take us and the world to zero crashes, zero emissions, and zero congestion. As I said, the chief beneficiary of our restructuring and future product development investment will be that electric vehicle program, beginning with our next-generation battery electric vehicle architecture or BEV3. We've said it before, and I'll say it again right now, our mission has and shall remain very clear. GM will be the first maker of profitable, highly desirable, range-leading, and obtainable electric transportation. BEV3 is the canvas upon which we will paint a profitable EV program.
You can see a pretty big bandwidth there. It is designed to have maximum flexibility and versatility. We developed it with an incredibly broad bandwidth of segments in mind, CUVs, SUVs, cars, and anything in between. We've developed the architecture so that it gives us the flexibility to do any or all of them, and we can build everything in the portfolio from just three drive units, front-wheel drive, rear drive, or e-all-wheel drive. The most expensive components, the drive units, the power electronics, and the battery cells are being designed for maximum use and reuse across all programs globally. In addition, we are designing the battery packs to provide tremendous flexibility to meet customer range needs within the footprint of the vehicle. So the architectural design will allow the battery packs to fit into the vehicle like ice cubes into an ice tray.
You can put in as much water to make as many cubes as you need. The tray still takes up the same amount of space in the freezer. This gives us astounding flexibility across the vehicle portfolio and allows us to achieve two things, the broad range needs and price points that our customers desire, and because we're at the highest degree of scale, tremendous cost savings. We can and will design for multiple brands in multiple global regions from this very same architecture. The BEV3 architecture is exactly why we're so bullish on the future of electrification in our product portfolio. As we increase volume and scale, we will drive costs down even further. That's why we're so very committed to this technology.
With our multi-brand, multi-use strategy and our no-compromise technical approach to electrification, we hope to accelerate global acceptance of EVs by creating the most desirable ownership experience possible. That approach includes everything from making highly desirable vehicles with the most range and the best value, to offering even more advanced technology and connectivity people want actually inside those vehicles, to working with partners on infrastructure development like more charging stations and fast-charging technology. To that end, we have just announced a collaboration with EVgo, ChargePoint, and Greenlots to establish the largest collective EV charging network in the United States with access to nearly 10,000 charging stations. This collaboration will make life easier for our customers. We're doing all these things because we believe in EVs. Not only that, we believe in our specific approach to them.
That's why companies like Honda have invested in our programs and products, and that's why SoftBank has invested in Cruise AV. That's why we're maximizing our efforts and resources to make the future electric. As we do so, our lead electric brand will be our technology leader, Cadillac. Cadillac will be the tip of the corporate spear on EVs. Cadillac is going to be about luxury, about beauty, about innovation, and about leadership. In short, Cadillac is going to be about Cadillac once again. Let me show you some of what I mean. And while you're watching, I want you to keep your eyes open for the next generation of our hands-free driver assistance feature, Super Cruise. A lot of you were asking about this last night. Take a look.
Ladies and gentlemen, this is what the future of Cadillac looks like, and what the future of the automobile looks like. This is why we're doing all the things I've been talking about today. This is why we're transforming the company and doubling investment in electrification and no longer investing in things that don't make money. The future is coming fast, and we're doing everything we need to do as fast as we can to be ready for it. We're even working on mobility beyond automobiles. This business is supposed to be fun. It is fun and can be fun. Take a look at this, which we're working on with one of our partners. Pretty cool, huh? It is really a future of boundless possibility. We're working every day on the type of innovation that can make the impossible possible.
I really am excited about it, and that can surprise and delight our customers the world over. I found when we unleash the incredible talent within GM, I'm always amazed at the vigor, the passion, and all of those things that our teams display. Our team is ready, willing, and more than able to create the future. Cadillac will lead us into that future. Steve Carlisle and his team, who's here today, President of Cadillac, Steve Carlisle, and the rest of the team are going to have much more to say about this just this Sunday, January 13th, back in Detroit, where Cadillac's new home and Cadillac belongs. Thank you very much for being here today. I hope there's a little bit of fun in here as well, and we really appreciate it.
I'm going to turn it back over now to my good friend who's been cruising around San Francisco, Mr. Dan Ammann, and he'll give you a full update on Cruise. Dan, thank you so very much. Thank you.
Morning, everybody. Thanks, Mark. I'd like to also congratulate Mark on his elevation to President of GM. It represents a significant upgrade from the last guy that we had in that job. I'm pleased to be here today to give you an update on my new role, and what's going on at Cruise, and we have a lot going on there. I'd like to begin with our mission, because this is really central to what we do every day at Cruise. We are building the world's most advanced self-driving vehicles to safely connect people with the places, the things, and the experiences that they care about. That simple mission statement is what drives everybody at Cruise every day, and it's what is allowing us to attract the talent we need to pursue this mission. What I'd like to cover today is really three things.
One is to quickly reframe the opportunity for AV as we see it. Secondly, I'd like to provide an update or a recap of our accomplishments through 2018. About a year ago, we held an investor day. A number of you were there. I would like to fill you in on the progress that we've made, the significant progress that we've made since that time. Finally, I'd like to look forward to 2019 and give you a glimpse of what lays ahead. Let's begin with a framing of the opportunity. I think if there's one single thing in the whole AV dialogue that's pretty much unanimously agreed on, it's that the addressable market here is huge. The total addressable market for AV is something that is measured in trillions, whether you measure it in miles or dollars. It is a known market.
We can see the market that's there today. The much more interesting question then becomes, how do you unlock that addressable market? What we're focused on, obviously, is developing the core technology that is going to allow us to unlock that market. To put this into the simplest possible terms, in terms of the technology we're building and what we're trying to do, is we're going to build a driverless vehicle that is safer, more secure, provides a better user experience at a lower cost than a human-driven vehicle. That's the statement of what we're trying to do. That's the technology that we're trying to build. We're building that technology in a way so that it can be deployed at massive scale. It turns out that that simple problem statement of what we're trying to solve is actually the biggest engineering challenge of our generation.
It's the thing that doesn't actually yet exist. This objective here doesn't exist in the world today. It's obviously what we're working as quickly as we can to bring to market. It is our belief that in this business, this core technology is what will be the scarce commodity. This is the thing that we are focused on. In order to build that technology, we have a strong view on things that you need to have, necessary inputs that you need to have at your disposable if you're going to be in a position to build that technology. The first thing is engineering talent. Engineering talent, not in terms of tens or hundreds of people. We believe this is something that requires thousands of the world's most talented engineers to bring to life. Secondly, it requires a lot of capital measured in billions.
We've done a lot of capital formation this year in this business. Thirdly, and really, really importantly, we believe it requires very deep OEM integration. We have said this from the very beginning, and it sort of underpinned our whole strategy going back to the original acquisition of Cruise. I think what we're seeing today, as people get further and further into this problem, they're starting to realize that the benefits of having all of this capability under one roof for the purposes of developing this technology is really important and really compelling. Once we've built that core technology, with those inputs, we can look at business applications to build on top of that. We're not waiting till the technology's ready to build those business applications. We see at least four major business opportunities from rideshare, delivery, data monetization, and licensing.
We have active business development going on in each of these areas. We're running our own internal rideshare program. We've announced recently a partnership around delivery for learnings there. We have data pilots that are lining up. We received our first revenue in January, so we're now a revenue company, from a licensing stream beginning from the Honda partnership. Notwithstanding the focus on developing those business opportunities, the vast majority of our resources are centered into this thing in the middle of the page, which is developing this core technology, because that's the part of this that's really difficult. That's the thing that doesn't exist yet, and that's the thing that will set us apart. Let's go to 2018 and a recap of some of the things that we've done since we were all last together on this topic.
Perhaps most importantly, we've grown the talent base of the company really significantly. When we acquired Cruise was a 40-person team. We grew that significantly in 2017. We ended 2018 with over 1,100 people on the team. If there's any doubt about our ability to attract the world's best talent, I think we've demonstrated that we're absolutely able to do that. The creation of a Cruise equity currency through the SoftBank investment was a big deal earlier this year and really allowed us to further accelerate hiring. Just as important as getting people in the door is retention. Our attrition rate is very low by Bay Area standards. Our unwanted attrition rate is just about zero. We're really, really happy with how that's working. We expect the team to continue to grow significantly again in 2019. Also in 2018, we established two really important partnerships.
The first was SoftBank, the second with Honda. While we've been growing the talent base, we've also been growing the capital base of the company. Between SoftBank and Honda, $5 billion of total external capital committed to the program. These partners bring more than just capital. They obviously bring relationships and expertise, and Honda is working with us on the development of a dedicated vehicle. The Honda investment valued Cruise at just over $14 billion. Obviously, a lot of progress on value creation over the last couple of years. Getting into the technical progress that we made this year. Safety is our most important metric, and we continue to make dramatic progress on this. This is the metric that we'll gate when we're ready to launch in a fully driverless mode.
The goal is obviously to initially exceed human driver performance, then to continue to improve dramatically beyond that. Our AVs drove about three and a half times as many urban miles in 2018 as they did in 2017, and we improved our core safety metrics by more than an order of magnitude. We're making really, really significant progress on the safety front. Again, this is the most critical metric that will gate the decision to be in a position to go driverless. At the same time that we're improving the safety metric, we also need to significantly improve the actual drive performance of the vehicle.
The very core of this engineering challenge is to do both of those things at the same time, to make the vehicle safer, while at the same time making it more capable and more able to handle the most complex situations that you'll see there every single day. One of the unique traits of what we're doing as a company is we are doing just about all of our testing now in downtown San Francisco in the most complex environment. We've had a view for quite a while that is going to give us a faster rate of learning because we're learning much more in any given mile of driving than you would be if you're driving in more of a suburban environment. Some of you got a flavor for that at the Investor Day about a year ago.
We had double-parked vehicles, unprotected left turns, pedestrians, cyclists, construction zones. What I'm going to show you now is a little bit of footage from just in the last few months of driving of our vehicles of situations that we see and how our vehicles are now able to handle those situations in this very demanding environment. I think you'll see for those of you that rode in the vehicles at the Investor Day, a real step change in capability here. Everything you see in this video is 100% in autonomous mode. Everything's in 100% autonomous mode. For those listening in, if the video quality is not great through the webcast, this video is posted on the Cruise Automation channel at YouTube, you can see that there.
Why don't we roll the video and you can see what our cars are doing out in the wild every day. This is a school pick-up zone. Can't make it up, right? It's like a double park. It's triple parked. The assertive merge. This next one is the trickiest unprotected left turn you can imagine, because the bus here is blocking the view of everything that's happening. It gives you a sense for the progress that's been made just over the last year in terms of drive performance, along with the order of magnitude improvement that we've had on the safety metrics. Another really important milestone that we covered back in the third quarter was we fully changed over our fleet from our 2nd generation of Cruise AVs to the 3rd generation.
While these two cars look very similar in the picture, under the skin, they're actually very different. The generation 3 cars are the cars that have all the layers of redundancy necessary to operate in fully driverless mode. We're building those cars on the assembly line in the plant. We remain, I believe, the only AV company that is getting plant-built cars coming straight off with all of the layers of redundancy, all of the sensors, and everything built on the line in a true automotive-grade fashion. The generation 3 car on the right is the car that we're able to launch fully driverless commercial service with. Lastly, for 2018, we're also running, and we have been for a while, an internal rideshare program. This is open to Cruise employees.
Out of our entire fleet, we have about 20 cars on average that are available, a pretty small subset of the fleet that's available for this service. We have hundreds of monthly users on the program internally now, and we've completed thousands and thousands of rides here. While it's still pretty small scale, it is giving us a really interesting level of operational learnings on running these AVs, not just for development purposes, but in a real rideshare construct. That's a lot of what we accomplished in 2018. It's a really big year. The team's done a tremendous job moving us closer to having this technology ready for commercial deployment. Moving to 2019, would like to highlight a handful of focus areas here as well.
The central focus is going to be to continue to develop and advance the core technology, and obviously to continue to grow the team. In addition to that, there's a few other things that we'll be spending time on. Just in the first few days of the year, we announced a pilot program with DoorDash. Just like we've been doing on the rideshare side internally, we want to do a relatively small-scale series of pilot activities with DoorDash to get learnings on the delivery side that we can feed into the design and development process for some of the future vehicles that we're looking at here and some of the future use cases. We'll be ramping that up through the first part of the year. We will also be really ramping up our focus on cost.
You might say, "Well, why are you starting that focus at this relatively early stage?" We believe that getting to very low cost is one of the key drivers of unlocking the true scale of the addressable market here. What this chart shows is the distribution of the 3 trillion miles that are traveled in the United States every year in terms of cost. You can see that the vast majority of the miles traveled in the U.S. today cost somewhere in the range of $1 a mile or less. Obviously, if we want to unlock those trillions of miles, we need to be able to produce autonomous vehicles that can offer mobility at or below that cost point.
The traditional rideshare companies today are operating in the $2.50-$3 a mile range, they're actually only tapping into an extremely small percentage of the total miles traveled in the U.S., or frankly, in the world every year. We think this gets much, much more interesting and an exponentially larger market opportunity if we can take costs down well below $1 a mi and really get into where the volume is, where the opportunity will be measured, not in millions or even billions, but in trillions. To unlock that cost opportunity, we have four major areas of focus.
Reducing the upfront cost of the vehicle, increasing the useful life of the vehicle, so the cost per mile over its life is lower, increasing the utilization of the vehicle so that the percentage of miles that you're driving are actually revenue miles rather than deadhead miles, and then optimizing the infrastructure and other operations that go around that. We are at the point now where we have extremely detailed plans coming together around each of these categories, multi-year cost planning, multi-year cost models with a very high amount of detail and a very high amount of sufficiency plans behind those, because we believe that this is perhaps the most critical parameter after safety to actually take this technology to the kind of scale that we believe that it needs to. Really detailed plans in place around cost, and that'll be a major focus for us this year.
Very closely related to that is accelerating our operational readiness. It's one thing to have the technology able to do what I showed you on the video here. It's another thing to actually commercialize that and operationalize it at scale. We have a lot of work going on infrastructure around charging, cleaning, maintenance, service. Solving real-world problems like how to upload and download petabytes worth of data in real time, and figuring out how to do that and how to do all of this in a very, very cost-efficient way. All of these things have been done in different flavors before, but they haven't been all done together in the way that we need to.
We think the learning curve here from a cost optimization and an operational efficiency point is going to be very long and very steep, and we want to get onto that learning curve as early as we can. There's a huge amount of work that's not really visible externally that's going on in the background to get into this. We're already doing things like time and motion studies and continuous improvement and deploying Kaizen mindset and so on into some of the operational aspects of the business to get that cost where we need it to be. The last thing that we'll be focusing on in 2019, in addition to advancing the core tech and the items that I've talked about, is the development of a purpose-built vehicle for AV.
We're developing a vehicle jointly between the GM team, the Cruise team, and now the Honda team that's joined us as well in a partnership to serve multiple use cases, not just for moving people, but for moving all kinds of things, and to set it up in a way that it'll be ready to be deployed on a global basis. The teams are far into this program now. We have prototype vehicles built. It may or may not look like anything like this image that I'm showing you here, this teaser image. No promises on that. This is about bringing this technology to scale and doing it in a really, really cost-efficient way.
If you go back to the core technology problem that we're trying to solve here, to deliver a vehicle that can drive more safely and more securely than a human, to offer a better user experience, and to do that at a much lower cost and to be prepared to do that at massive scale. That's where all our energy is at. It's a really exciting time. We're going to have a really exciting year ahead of us as we get closer to deploying this technology out into the wild and turning it into a real business. Thank you very much for your time, and I think we are now going to take a short break, right? Thanks.
We'll take a 10-minute break, so I request that everyone come back in 10 minutes sharp. Thank you.
[Break]
I was going to tell them to come back or just going to announce that they should start getting seated, or if somebody could just announce to please come back.
Sure.
Welcome back. Is this on? Yep. Welcome back. We will now continue with our last presentation and then move into Q&A. It's my pleasure to introduce our CFO, Dhivya Suryadevara.
Good morning. Thanks, everyone, for being here today. I thought of showing our financials in the form of a cool video like Dan and Mark, we're going to have to stick to slides for now. I'll try to keep it interesting for you guys. Three topics to cover today. Our key organizational priorities from a financial perspective, the truck market, as Mary mentioned, we do believe it's very different from the rest of the light vehicle market, we wanted to provide some color on that, our financial outlook for 2018 as well as 2019. Let's get right into it. Over the last few years, you've seen us expand our margins and take actions to focus on markets that are profitable, where we have a path to a reasonable return.
What we want to do in 2019 and beyond is to continue that momentum in those areas, but also focus on these three key areas. Free cash flow and cash conversion. It's our focus to improve free cash flow at an absolute level, as well as focus on the conversion of free cash flow from net income. We're going to focus on a best-in-class cost structure, and I'll expand on the actions that we announced in November that's going to contribute to this. Efficient capital deployment and being good stewards of your capital. Let's turn to cash. If you look at our free cash flow level, we are experiencing certain structural headwinds that cause a gap between net income and free cash flow. You can put them into three big buckets.
First is the gap between capital and depreciation, that's really driven by the product cadence that Mark has been talking about with the launch of our crossovers, our truck launch, as well as our global family of vehicles in South America, Mexico, and China. That's driven a capital level that's been higher than historical averages. The gap between our pension outflow and our pension income, which is based on return that we earn on our assets. Finally, gap between the GMF earnings and the dividends that we receive from GMF. If you fast-forward and look at what these numbers would look like a few years from now, capital, we announced in November that we expect to see a tailwind of a billion and a half by the end of 2020. We're on track to achieve that.
Pension outflows tend to have a longer tail, that's a medium to longer-term item. Depreciation and pension income, we do expect that in the next few years, they will normalize to a more sustainable level. You will see, like in the 2019 outlook. What we're doing is addressing those headwinds through cost savings and tailwinds that we're going to talk about in a little while. GMF is on its path to full captive, as Dan talked about. When it reaches full captive in the early 2020s, we expect to achieve a full dividend of their net income in the form of corporate dividends. It's our objective in the next few years to target 100% or close to 100% of our net income into free cash flow.
As I progress in the next several quarters and years, I'm going to continue to provide an update on that. Let's switch to cost structure. In November, we announced a series of actions that we believe would lead to $4.5 billion of cost savings. Breaking that down a little bit for you, 1/3 of that is expected to come from the product group, and Mark talked about the transformation that's going on in the product group. Third of that is expected from manufacturing footprint and capacity rightsizing around our globe. Another third of that is expected to come from staffing and SG&A type items. We have talked about reduction in our executive ranks to the tune of 25% and a reduction of 15% in our salaried workforce and other G&A items that contribute to the final third.
If you think about the cadence of the $4.5 billion, we expect to achieve about half of this by the end of 2019 and the remaining half by the end of 2020. I'll provide an update on our 2019 guidance as we move forward here. One of the enablers of the cost reduction here is going after complexity. You may think this is basics, and it is. It's basics, and it's doing the basics well. Here are some of the examples of things that we're working on. We're increasing part sharing, and as an example, two of our mid SUVs currently share 50% of the part cost. What that allows us to do is to leverage scale and achieve material cost efficiencies. We're reducing build combinations.
For instance, the 2018 model year Traverse reduced from 250 build combinations in the prior generation to 30 build combinations in the current generation. Elimination of additional powertrains. Similar to optimizing the vehicle entries, we're also optimizing the volume per powertrain entry. What all this allows us to do is to achieve efficiencies in engineering, in manufacturing, and it improves launch quality and speed to market. Switching to capital, we expect a billion and a half reduction by the end of 2020 from a level that's $8.5 billion currently down to $7 billion per year by the end of 2020. How are we doing this? Fewer vehicle architectures. We expect 75% of our global sales to come from five major architectures by early next decade.
We're partnering where appropriate. Whether that's batteries or fuel cells or transmissions or commercial vehicles in South America, we are open to partnerships where it makes sense for us to gain efficiencies in the amount of capital deployed. In summary, our priorities, the three priorities are to improve cash generation, achieve a best-in-class cost structure, and to efficiently deploy our owners' capital. Let's switch to trucks. Last year, we talked about the truck market. Why we think it's structurally different from the rest of the light vehicle market. I think it's important to reiterate that and expand on that a little bit, especially given the current U.S. macro environment. We believe that there are some unique elements to the market, including competitive moats. The top three OEMs have a market share of 93%.
As a point of comparison, this same number in 2008, 10 years ago, was 89%. Also for context, this same metric excluding trucks is 35%, so it's a highly fragmented market when you look at light vehicle sales outside of trucks. Why is this? We have over 100 years of experience and really knowing the customer and exceeding customer expectations. Based on what Mark talked about and the progress we're making with our new generation trucks, we will absolutely continue that momentum. Growing and aging truck carpark. The truck business, again, it's comprised of The slides are off a little bit. Okay, I'm still going to talk about truck parks. If you look at the truck park and compare that to where we were 10 years ago, it's grown three times that of the light vehicle market.
From an aging perspective, the aging of trucks has grown two times that of the light vehicle market. What that allows is a latent demand that's built-in and provides a buffer against the rest of the cycle. Loyalty. Loyalty in the truck market is significantly higher than any other segment. It's at 70%, and the next highest loyalty segment is 30 percentage points lower than that. If you think about the growing truck park, the aging truck park, together with the loyalty, that's a great combination. Use case. Approximately 40% of the retail customers use their vehicles for personal as well as commercial purposes.
If you add to that about 20% for fleet and commercial and government use, you're really talking about over half the customers where this becomes a need to have and not just a want to have. You put all this together and the fact that this is less prone to disruption given the concentration outside of urban areas, what this makes for is a market where the margins are very, very attractive. The margins that we achieve in our truck portfolio are significantly higher than the rest of the portfolio.
To summarize, we believe this market is completely different from the rest of the light vehicle market, and we're positioned incredibly well with the breadth of our entries as well as the top-end entries and vehicle entries that Mark talked about with crew cabs and other variations that are higher margin than the rest of the vehicle market. We're very excited about the next portfolio and the momentum that's going to take us into in 2019. Speaking of 2019, let's switch gears and talk about outlook. A quick recap on 2018. You may recall that our EPS range for 2018 is $5.80-$6.20, and we had said during the last earnings release that there's potential for further upside. Our automotive free cash flow range is around $4 billion.
What we expect now is to exceed the high end of this range from an EPS perspective, as well as exceed our expectation of $4 billion for automotive free cash flow. This was driven really by strength across every operating segment. North America came in particularly strong. China finished strong as well, despite the market environment. We continue to improve our results across the GMI markets. GMF continued to perform well with the growth that Dan mentioned earlier. Switching to 2019, I wanted to talk about the headwinds and the tailwinds. Let's talk about the headwinds first, these are absolutely consistent with what we've been signaling all along through the year 2018. We expect to continue to see a volatile commodities and tariff environment, we have baked that into our projections.
While some commodities have been experiencing some moderation, there is other commodities that are continuing to remain at elevated levels. Tariff environment, as you all know, there is a lot of uncertainty there. Mark mentioned that the next phase of our T1 launch is heavy duties and SUVs. We do expect to take downtime in our SUV plans in order to prepare for the new launch. We have factored in a volume headwind from that perspective for SUVs. China, Matt talked about the markets, and taking into account the environment in China and all the headwinds that Matt talked about, we are expecting a moderate year-over-year headwind from a China equity income perspective. Finally, the depreciation in pension income, which are non-cash items that I talked about earlier, are expected to be a headwind in 2019.
Again, that will compress the gap between earnings and free cash flow that I talked about earlier. Against that, we see a lot of tailwinds that are GM-specific. Firstly, we are going to see the full-year benefit of our light duty truck launch that Mark talked about earlier. We are seeing great receptivity from dealers, from customers, and we expect to see tailwinds in volume, in mix specifically, as well as price. We are going to see strength from our crossover launches, a full year of XT4 Blazer launch, as well as the XT6 launch and the global family of vehicles that are going to start getting rolled out in South America.
Adjacencies in the form of after-sales as well as OnStar are expected to be a tailwind, and you may recall that this is an area of the business where we have been focusing over the last several years and growing this year after year, and this is a high margin, less cyclical area of our business, and we are continuing to grow that. Layer on top of that the transformational cost savings that I talked about, which is half the $4.5 billion that we expect to realize in 2019. We expect the tailwinds to more than offset the headwinds on the right side of the page. It is important to note that this is based on the current constructive macro environment that we have been talking about and that Mary talked about in her remarks. Put all this together, we expect earnings to increase in 2019.
Because some of the headwinds are non-cash based, we expect the cash-based earnings to increase more on a relative basis to the overall earnings. As a result of this, we expect an EPS diluted adjusted of $6.50-$7, driven by continued performance in North America. We do incorporate the headwinds in China, as discussed earlier, and improved performance in our international operations. We have the benefit of the Korea savings coming through. We have a more constructive macro environment in Brazil post-election, but the FX environment there we are keeping an eye on, and we continue to be cautious about that. Put it all together, a $6.50-$7 range. From a cadence perspective, quarterly cadence, we expect the first quarter to be the weakest given that the downtime I mentioned in the SUVs are going to be focused on the first quarter of the year.
First quarter weak and the rest of the year stronger. Let's switch to free cash flow. Because of the quality of earnings improvement and the cash-based earnings that I talked about earlier, we expect an improvement in free cash flow from the range of $4 billion in 2018 to $6 billion-$6.5 billion, excluding the impact of timing. We expect some one-time timing items in 2019 that relate to an extra payment date to suppliers. We're going to take some downtime on the SUVs, and there's some unwind in working capital associated with that. We expect, adjusted for timing, a free cash flow in the range of $4.5 billion-$6 billion. What does this represent from a conversion standpoint?
It is an improvement from the 2018 conversion that I talked about. You will continue to see in 2020 and beyond an improvement in our net income to free cash flow conversion ratio. I wanted to recap quickly our capital allocation framework. We remain focused on the same capital allocation framework. We're going to execute that consistently similar to what we've been doing over the last several years. As a recap, the first tenet of the framework is to reinvest to drive growth and target a 20%+ ROIC. Consistent with that, in 2019, we expect a CapEx in the range of $8 billion-$9 billion. We will maintain a strong investment-grade balance sheet, not just for the OEM, but also for the FinCo. Our cash balance of $18 billion on average remains the same in 2019.
After that, we expect to return available cash to shareholders. Important to note that we're keeping the dividend of $0.38 per share per quarter consistent as in the prior years. To recap, it was a very strong finish to 2018. Based on levers that we're pulling and the actions that we're taking and a number of self-help initiatives and the transformation we announced in November, we expect a strong finish to 2019 as well, assuming current market conditions. With that, I think we're going to open this up for Q&A. Thank you.
Great. We'll move into Q&A now. I'm going to ask Mary, Mark, and Dan to join us on stage. While we do the setup, can I just see a show of hands of people who may have questions that'll help me? Great. Could I just see that one more? Great.
Yeah.
Thank you.
Yeah. Thank you. Anyone else?
Wait. I know.
Okay, we've got people with roving mics, so they'll bring the mic over to you. Can we start with Rod Lache? Rod.
Hi. Rod Lache with Wolfe Research. I had three questions. One is maybe Dan, you could just talk a little bit further out about how you see the Cruise evolution evolving. So if we were to sort of envision that you're proving the minimum viable product this year, a vehicle driving around without a human backup driver, where are you 12 months from now? Where are you 24 months and 36 months in a very high level?
At a high level, as the technology matures and we go driverless, obviously we're moving into a scaling mode, at that point in time, scaling within a city, scaling multiple cities, scaling beyond sort of the denser market environments. As we go down the cost curve, that obviously opens up geographies outside of the dense urban environments from a commercial viability point of view. I think at that stage, there's two dimensions we'll continue. One is continued improvement in performance of the product, right? Continued improvements in safety, continued improvements in ride experience, continued improvements in cost. As we're doing that, we're scaling into multiple markets.
Just to dimension that, is there any way to think about how large this entity is in two or three years if you're successful?
Reluctant to put a number on that at this stage.
Okay. Mary, you alluded to maybe the potential for other options in South America if the profitability doesn't improve from there. Is there any elaboration on what you were contemplating? Are you thinking about things along the lines of what you have done in Europe, or were you sort of intimating something else?
I think when you look at South America, we have a very strong franchise with the Chevrolet brand, a great dealer network. The reality is, because of macroeconomic challenges, we have not been able to drive profitability and cover our cost of capital. That is something I think you see this leadership team is very disciplined, that we're not going to keep deploying capital to lose money. We're working with the necessary stakeholders. We think we have a strong franchise, but we're on a path to get to profitability and have appropriate return, and we'll consider all options to accomplish that. I think right now, we're having very productive conversations with the key stakeholders in South America.
Just lastly, you did guide to some headwinds in China for 2019 versus 2018, that was within the context of a flat market environment. Can you just elaborate a little bit about what if the market is down 5% or 10%? What is the kind of sensitivity that we should think about and levers that you can pull? How can we think about the equity earnings outlook? Thank you.
We have done our downturn planning exercise, as Matt alluded to, in China as well. While it's obviously difficult to dimension, you have to make assumptions on mix, you have to make assumptions on what the pricing environment would be and so on and so forth. I think if you were to dimension this along the lines of how we've done it in the U.S., if you recall, for a 25% decline in industry in the U.S., we had mentioned a headwind of about 60% or so in overall EBIT. What we would experience in China is similar, it's along those lines. It's consistent with that.
Thank you.
Great. Adam, I think you had a question.
Hi. Adam Jonas, Morgan Stanley. The word hybrid, I don't think was used one time all day. Mark, I see you shaking your head. Why not?
Fundamentally, I think everybody looks from a business standpoint at hybrids as countermeasures to an internal combustion engine. You can spend resources, in an additive manner, making hybrids that force the customer to carry around things they may or may not value. You can go spend your resources on getting the real answer, which is emissions-free, zero-emissions vehicles that provide the customer with high value at an affordable and obtainable price.
Thank you. Next question, Mary, for you. Elon Musk went on national television recently and said he would consider taking a plant slated for closure from General Motors. Would you be willing to talk to Elon about that if he called you?
Well, there have been conversations, and the fact of the matter is, Tesla is not interested in our GM workforce represented by the UAW. Really is a moot point.
Of course. Thank you. Just finally, GM appears to have tremendous strategic value, but continues to trade at a major discount in the stock market. It's just not appreciated. Would you, Mary, and the team consider seeking a strategic buyer for the entire company if you felt that that was an avenue to narrow that gap to maximize value for shareholders?
My job and the whole leadership team's job is to create value for our shareholders. You have entrusted and invested in this company, and that's what we work hard to do every day. Obviously we're looking at strengthening the core business on what we do on our own. I think you've seen what we've done with Cruise and buying a startup company, partnering with SoftBank, finding synergies with Honda, not only in AV, but EV as well as fuel cells. We're going to continue to look at the ideas we have, but we're also going to be open to any idea that would come from someone else that is going to drive and create shareholder value for the long term. This is a management team that is open and is committed to doing that.
Great. Let's move to the other side of the room. Ryan Brinkman.
Hi, Ryan Brinkman from JPMorgan. Thanks for taking my questions. Firstly, given that you are already earning your long-stated target of 10% margin in North America, and given that the vast majority of the $4.5 billion in restructuring savings are thought to accrue in North America, is there now a new normal of higher GM NA margin that you are comfortable communicating? How should investors think about GM North America margin going forward?
Ryan, we're not going to put out another target like the 10%. You've seen the progress. The tailwinds that we're talking about largely do accrue to North America, including the cost savings. We expect in 2019 and beyond North American margins to be very strong, and we'll leave it at that.
Okay, great. Thanks. Then just according to your existing capital allocation framework, it would seem that so long as you have $18 billion of cash, that should we think about repurchases in 2019 being approximate to the $4.5 billion-$6 billion of adjusted automotive free cash flow, X timing, less to roughly $2.5 billion in dividend payments? Because of some of the give and takes around restructuring cash spend and dedicated restructuring revolver draws it'll shake out a little bit differently?
I think what you ought to look at is our overall capital allocation framework. We're in the middle of a transformation that is only accelerating. We're going to make sure we're reinvesting in the business to drive long-term shareholder value, maintaining the investment-grade balance sheet. Then the third dimension of our capital allocation framework is to return to shareholders. As we sit in January, we will follow that capital allocation framework. I don't know if you want to dimension that any further.
I would just add that the special charges related to restructuring would have to be factored in when you look at the cash flow available for repurchases. The math that you're doing is absolutely right, which is take our free cash flow, take out the dividends, pay for the restructuring, and then apply the framework that Mary talked about.
I see. Thanks. Finally from me, what is the latest thoughts that you have in terms of the percentage of GM Cruise Holdings LLC that General Motors Corporation Company should own? When would it make sense for the public via the equity markets to be able to participate in that upside?
As of right now, as we said over the last year or so, given the state of development we're in, there's huge synergy between the two organizations. I think someone commented to me last night that they're hearing from others that doing this kind of thing on an arm's length basis between an OEM and a software engineering team and whatever else is really difficult. That's been our premise from the beginning. I think part of the reason we've been able to make the progress we have is because of the configuration that we have today. We're going to continue to pursue that. That will change over time, and there'll be a point in time where that dynamic does change, and we can look at things at that stage.
For right now, having everything sort of under one roof, as we've said before, we think is a huge competitive advantage at this stage of development.
Great. Thanks a lot.
Great. Itay, could you?
Thanks. Itay Michaeli from Citi. The first question is for Dhivya. When we think about the absolute levels in 2020, you've got GEMs, the large SUVs, and another slug of the restructuring. Your sort of kind of major macro moves, what will prevent earnings from not going up materially in 2020 versus 2019?
It's obviously a volatile macro environment. I think the tailwinds that you mentioned are valid between the GEM portfolio as well as the tailwinds we're going to see from the launch do extend into 2020. What's hard to predict, obviously, is what the overall macro environment is going to be. From an absolute cash flow level perspective, if you take where we were in 2018, talk about the transformational cost savings that we talked about in November and today, in a similar macro environment, you would expect all of those cost savings to fall to the bottom line. You can do the math, four plus the six sits at a $10 billion number.
Maybe one for Dan. You talked about the improvements in safety parameters in 2018. Where are you on the agility side, and then kind of how you think about optimizing those two? Which one sort of is the bigger challenge for you at this point?
What do you mean when you say agility?
The vehicle agility and just the kind of human-like driving behavior and the optimizing that relative to safety metrics.
Right. Well, we showed you some of that. The goal, as I said, or the challenge, is to improve both of those things at the same time, because a lot of the time they're at odds with each other. You can have something that's extremely safe but doesn't work especially well, or you can have something that's more aggressive, but it doesn't deliver the kind of safety. At the very core of this engineering challenge is advancing both of those things together. We've made, as we showed, both on the safety side and on the vehicle performance side, dramatic progress over the last 12 months on that. We want and need to do that again this year and every year for as far out into the future as we can see.
I think that it's a really important point that this notion of commercial launch and going driverless, it's a waypoint on a much bigger journey, and that is not the end. In fact, in many ways, that's really just the beginning of driving the true performance capability of what this technology can do.
Maybe to that, as we think, just last question. Once you actually deploy and launch, how do you think about going to city number two and city number three? Is there a period you need to kind of gain confidence in city number one, or is it still the intent to try to expand more rapidly?
I think there's a fair bit of flexibility around that. As I said, I think in response to Rod's question, you've got scaling in a city, you've got scaling to other cities, and then you've got scaling into newer environments, some of the less dense environments. I think how we plan and optimize those will depend on things like where are we on the cost curve? What are the unit economics looking like? What's the competitive dynamic like? We'll play that as we go.
We'll back to this side. John Murphy.
Thank you, and thanks for all the information today. I just wanted to ask first, on China. Your results seem to be defying gravity relative to some of the volume and everything that's going on in the industry, and that's a great thing from an investor standpoint. I'm just curious, as we think about the other factors just simply outside of volume and price, what else is contributing to that? Really what I'm getting at is how much are aftermarket parts really offsetting some of the pressure as the installed base for you grows there? Then as we also think about the other opportunities in China sort of over time is potentially body-on-frame SUVs, GM Financial, OnStar, and then ultimately Cruise.
How do you think about all those things as sort of growth engines for China beyond just the GEM platform and volume and stuff that's difficult but is kind of mundane? You have a lot of other opportunities in China.
Let Matt, our President of China, answer that question.
He was smiling, by the way, when you said defying gravity.
We love to defy gravity. Thank you very much for your question. We do believe that we have a lot of levers. It starts with what I talked about in terms of a very solid foundation that we've established over 20 years of partnership. To that degree, what you've seen over the last several years is continued mix improvement. The fact that we've been able to grow Cadillac, for example, 20% in a down market is a sign of our ability to drive higher quality earnings from an overall portfolio performance standpoint. Downstream offers a tremendous opportunity for us. We've been able to capitalize on that in terms of improved aftermarket, after-sales performance. GMF has been a great contributor through our SAIC-GMAC financing joint venture. We see continued opportunities as we move forward. Quite a number of handles in terms of driving to the positive.
At the same time, we've been working consistently on cost down, efficiency up. We believe we've been able to get ahead of the game, if you will, in terms of driving more cost efficiencies as the market began to soften.
Just on Cruise, the potential for Cruise or AV/MAD in China?
We're going to get launched here first, and then we'll see where we go from there.
Just a second question on Cruise. As we think about the way that you're talking about it, the technology on the vehicle is really the gating factor, and that sort of the services and the way you discussed it are of lesser value. You seem to think when you get to get the core technology set that you can get this up and running, and that seems to be very different than the way the equity markets are capitalizing it because they're not giving you a lot of credit for it, but they're then talking about some other unnamed companies in the ride-hail environment being worth more than $100 billion. You're not being given credit, but they are. How do you think about this, Dan, going forward? You keep underselling the mark that you got from Honda at $14.6 billion, because that's just the dollars and cents.
It doesn't value anything about the partnership, the technology that they're contributing. That $14.6 billion is a sort of a low water mark in what's going on there. Really, there's a much higher mark that they gave you.
I think, I guess the way I'd address that is, I think we've gone through a period over the last year or so where it's become more clear to a lot of other folks in this area just how big this challenge is from an engineering point of view in terms of the magnitude of what we're trying to do. I think that's something that we've had a perspective on for quite some time. We have configured ourselves in a way with the integration with the OEM, setting ourselves up in that way to drive a rate of progress that we think is faster, to try to have the fastest ultimate rate of progress to get us to where we need to go. Inside of that, the core technology piece, we think, is the scarce commodity.
As I said, that is the thing that no one has yet solved. The business applications of that technology are kind of known, right? We sort of know what rideshare looks like. We sort of know what these delivery businesses look like. We have a lot of actually new innovation and opportunity on the data side. Our focus in a world of scarce resources, which is what every company is in, we're putting the vast majority of our resources to the most difficult part of the problem because we believe that once we solve that part of the problem, we're going to be in a very interesting position.
Okay. Then just one quick housekeeping question for you, Dhivya. The $2 billion-$2.5 billion that you reference as a tailwind in your guidance for 2019, should we understand that as being fully achieved through 2019? Or is that the run rate at the end of 2019? Because it's very important as we think about for your forward earnings expectations or forecasts beyond 2019 to understand if that's fully encompassed or that's at the end-of-the-year run rate.
It's at the end-of-the-year run rate.
Pretty evenly through the year? Is it really just at the end of the year?
On the early side of the year.
Okay. Thank you.
Actually.
Great. Brian Johnson, let's go to you and then Joe Spak after that.
Thank you. I just want to follow up on a couple things around Cruise. One is more housekeeping. With two partners on who put significant amount of cash into it, is there any different way we ought to be thinking about modeling the old corporate other in terms of the amount of cash and earnings or negative earnings impact of that development on GM?
I don't think so.
No.
Okay. Same run. Does that mean you're getting more, doing more with the same amount of cash because your partners are supplementing it?
I'm not quite sure I understand the question fully, but let me try this. The total spend at Cruise for development in 2019 will be pretty similar to what we spent in 2018. Does that help?
Okay. I'll follow up on the accounting.
Okay.
Second, if you kind of actually get to the point where ridesharing's deployed by revenue and you talked about the $1 versus $0.60 TAM, what would you think if there's a scenario in which competitors get there at the same time and use the old experience curve pricing similar to how ridesharing services developed and priced well under $0.60 to build market share? If that happens, how would you think about it? Also, how would you think about that question raised earlier about whether this is part of a GM corporate entity or something else?
Well, I think there's one critical difference that we see in terms of how this technology would unfold in a rideshare environment versus the current rideshare businesses. Today, you have at least two apps on your phone where you can hail a car. The experience is undifferentiated by and large between the two of those. If you instead had two AV apps on your phone and one of them delivers you a complete frictionless magic carpet experience that picks you up on time and takes you to wherever you want to go on time in a wonderful environment and so on, and the other one is a pretty early-stage minimum viable product thing, you're always going to choose the differentiated product in there.
That is why it's our belief that getting to this initial commercial deployment of the technology is really just the very beginning of the journey of improving that product and making it into something really special and differentiated and super low cost over time. It's one thing to be first mover, but it's more important to be the fastest mover in terms of your rate of change and rate of improvement so that you can open up that competitive gap and ideally not get in a position when you're only competing on price.
Joe.
Thanks, Joe Spak from RBC. First question is, you talked about CapEx going lower by $1.5 billion over the coming years. You also mentioned an increased reliance on the GEM platform. I think you said one out of 10 cars end of the decade going to one out of five. My understanding is a lot of that's being run out of China. Does that raise the capital requirements for the JV partners and does that at all impact some of the cash you expect to get back over the midterm from those partners?
Do you want me? A bulk of the GM-related spend is actually happening in 2018 and 2019, and it is already factored into our capital outlook. I would not think of that as an additional headwind versus what we just talked about.
Okay. Just on the 2019 earnings and free cash flow guidance, can you just talk a little bit about the year-over-year impact from some of the other items like a tax buyback and even the dividend back from GMF?
Sure. I would think of tax, to answer your question, we expect to be in a similar tax environment in 2019 as we were in 2018. Repurchases, I would say, given our level of repurchases of $100 million in 2018, not a significant impact in EPS for 2019. Dividends from GMF, we are expecting at a level that is similar to what we had in 2018 as well.
Okay, I think we have got time for a couple more. Emmanuel, go ahead.
Hi, Emmanuel Rosner from Deutsche Bank. First, just a quick follow-up on the year-over-year earnings walk, I wanted to focus maybe on the headwinds, discrete items. Can you maybe just tell us what's embedded in your guidance range for the headwinds from commodities, tariffs, the depreciation expense and pension income?
I don't want to do an elaborate EBIT bridge for you here, Emmanuel, I would say roughly the range of, for commodities, we had said during our second quarter earnings that we were going to experience $1 billion of unmitigated commodity headwinds. We've offset some of that, We do anticipate a large majority of $1 billion to remain as a headwind in 2019. From an SUV downtime perspective, we're expecting a year-over-year number of units of roughly 25,000 units in SUVs, down from 2018 as a result of the changeover. The depreciation and pension expense is roughly in the north of billion-dollar range.
Thanks. Excellent. Very helpful. Then, I think one of the slides in the comments was mentioning the openness to partnerships. That was outside of the Cruise partnership, just maybe on the core automotive business. I assume none of that is in the current plan or earnings outlook. What are you referring to? What are you looking at?
I think we've announced partnerships to date, I think it's a recognition that if we can be more efficient with not only capital deployment, engineering expense, we're going to look at those opportunities. I think Honda is a good example of that. We are open and exploring opportunities. I don't have anything to announce at this time.
Understood. Very finally, for Dan, I found the DoorDash pilot partnership very interesting. First from a capacity utilization point of view, but also because this is another investment of the SoftBank Vision Fund. How critical was their involvement in sort of setting up that partnerships, are there any other investment in their portfolio that you would feel could be a good match together with Cruise?
Sure. To be honest, this happened fairly organically actually between Cruise and DoorDash. One of the things that SoftBank does bring to the table is a whole host of relationships and portfolio companies and so on. As we said at the time that they made the investment, we saw that as a clear strategic advantage for us.
Thank you.
Great. I think we've got time for maybe one or two more. David Tamberrino.
Thank you. Dave Tamberrino from Goldman Sachs. Two lines of questioning. First on Cruise. Then free cash flow. Cruise, Dan, I believe the target had been for commercial deployment in 2019. I think from our conversation last night, it sounded like that would be in the hundreds of vehicles. How do you feel with where your current technology acceleration has been about reaching that target this year? What are your thoughts on the gated-by-safety comment that follows that target, and if you would deploy with a driver in the vehicle as we've seen others do?
Safety is the gating metric to go driverless, that's crystal clear, and we've been crystal clear on that from the very beginning. As I showed you today, we've made a lot of progress, order of magnitude type progress on that. We need to continue doing that to get to the point that where we want to. We will not deploy driverless until we have hit the safety thresholds, until we're completely ready to do so. The sort of idea of deploying with a driver and so on, then you get into, that's a whole continuum of things. I could make an argument, I don't need to, but I could make an argument that our internal program today, where we have hundreds of monthly users and thousands of completed rides is basically that already today.
We're getting learnings out of that, but that's not commercial deployment from our perspective.
Your confidence level on deploying in 2019?
Ask me at the end of the year.
Dhivya, as I think about your net automotive cash balance over the last couple of years, it's come down as you've gone through some of these strategic actions. From the uses of cash, restructuring will be a part of it this year. Is there a target in mind beyond just the $18 billion of straight cash, but matched up versus your debt and what your net cash would look like? Is first part of my question. Secondly, with the restructuring actions you've taken, the cost savings plans, do you have a lower minimum operating cash balance as you think about for the company? Does the downturn analysis that your predecessor presented a couple of years ago still stand, or is it less of maybe the $10 billion flip in a two-year process going through a downturn?
For the first question on overall net debt and cash balance, we do believe that our current targets, which is $25 billion-$30 billion of debt plus pensions and $30 billion-$35 billion of liquidity is appropriate. We're going to manage around that. To your second question on does this change the downturn analysis or the need for further cash reductions? It is a tailwind from a downturn analysis perspective. If you look at the breakeven point that we had of 10 million-11 million units in the U.S., it does put us on the lower end of the range, despite the commodity and other headwinds that we've seen. We'll continue evaluating what the $18 billion cash target should look like.
We think given where we are in the cycle at this point, this is an appropriate number. We will keep looking at it as we go forward.
Lastly, because I have the mic, Mark, you're bringing out new pickup trucks this year. You also have a competitor that's launched a new pickup truck. The third competitor also had a pretty compelling offering that's been out for a couple of years now. How do you feel the new GMC and the Silverado is stacked up against your competition, particularly now you've had one that's been refreshed and been ramping throughout 2018 and actually saw a healthy amount of market share gains in the fourth quarter?
Yep. I gave you some of the, like you said, the data on the fourth quarter start of it, It's off to a really great start. We know also that from a performance standpoint, we have propulsion systems that aren't quite rolled out yet. We've got another diesel coming. In fact, I was up in Flint two weeks ago with Alicia Boler Davis looking at the new diesel, It is technically amazing. We're getting ready to put that into the trucks as well. I think from a truck standpoint, I think we're really dialed in on what people really want and who buys trucks. There's a large percentage of people here, and you saw it today, that buy our trucks, that use our trucks to work.
That's a pretty big core basis of satisfaction that we've always been really good at, and it's going to be even better. I can tell you that we have a medium duty that we just launched, and one of the adjacency things that is really important on how well Ford and Chrysler do, or FCA could do, depending on how much they fill that out, is the adjacencies on the commercial duty of those trucks. We frankly have not had entries to be able to compete, and now we do. I think that's a big reason why one-stop shopping on a pickup truck in Chevrolet or GMC is going to be really important, and we're starting to fill that out. There's some things that'll be good for us there. The truck itself, we've got a lot of miles on these trucks.
I can tell you the launch went really well. I'm very excited about it because we've differentiated them a lot more than we did in the past. I think you're going to be blown away with the further differentiation you see on these SUVs off of that platform. I think that's a big one. The best is coming here. Yeah. The HDs as well. The HDs, you saw the HDs, they're wildly different, which they were not in the past. I think there's some upside there. Yeah.
Great. That will have to be our last question. I'd like to thank the panel for coming up. Mary, will you have a few final closing comments?
Yes. I'll let you guys out of it. I hope today's session has been valuable. We've really worked hard to give you a glimpse into what we're thinking across both the core business and the transformative technologies. We are here to seize opportunities and really lead in that transformation, continue to strengthen the core business. You can see our commitment to EV, to AV. We didn't talk a lot about connectivity today, but that's very important part of our strategy as well. We will do all that very focused on the customer. When Mark talks about the customer focus as it relates to trucks, the focus for our global family of products in China, in Brazil, in Mexico, the focus we're putting on the customer in Cruise, those are just glimpses into how customer-focused we are every day in the work that we do.
I hope you also see that we are unafraid to make bold decisions because this is an industry in transformation. We are here to lead that transformation. That we will do it the right way, we will do it with a focus on our people and a focus on the communities that we impact, but we will make those decisions because we recognize it's our job to make sure GM is here and strong and a leading enterprise for decades to come. I also hope you see, I have the privilege of leading an incredible group of leaders that are a part of the General Motors leadership team, and we are a team. Finally, I would just say we are committed to driving significant shareholder value over the short and long term.
As this industry transforms, we are here to accomplish our vision to create a world with zero crashes, zero emissions, and zero congestion. We are committed to winning. Thank you very much for your time and attention today, and I hope everybody travels safely.