1.0 Executive Summary This strategic marketing report prepared for the General Motors (GM) detailed a thorough analysis the motor vehicle market in China. GM was a US automaker company, and entered the market of China by joint ventures. SAIC is GM’s major joint venture partner, and it had become the largest plant in China. GM was earning high profits from China by 2004. However, GM faced the challenges from both foreign and local competitors, overcapacity and intervention from Chinese Government. In 2004, the sales dropped sharply. The first part will be analyzed by STEP theory of the motor vehicle market in China in 2004. Then we will use SWOT analysis to examine if China is still an attractive market for GM. Next, we will …show more content…
It provided sufficient financial resources to the firms to further expand its business in China. GM entered China market by joint venture. GM and its major partner, SAIC, could offer the widest portfolio of products among automakers in China. Through joint ventures, GM could create a good relationship with Chinese official, which was very important in doing business in China. GM could also access the market of China easily, while those importers without joint ventures were not allowed to do so. In 2004, GM was the first foreign automaker to be permitted to issue auto loans to its buyer in China. Although other carmakers followed this action of doing the auto business, GM had a first start and this would allow them to enjoy a short period of time of limited competition, and lead to the sales increase greatly in China market. 4.2 Weakness GM experienced profits drop in the third quarter of 2004. Intellectual property was a critical challenge for GM in China. Through by joint venture, GM’s local partners could copy designs and technologies of the foreign investors, and sell the cars at a lower price with many similar features. Besides, the domestic corporations might set up their own facilities and compete against the joint venture, and export to foreign form’s markets throughout the world, and GM could not do anything to stop this action. By 2004, GM major partner, SAIC, had already have its plan to compete against GM by producing its own brand
Realizing partnering with the China utmost powerful city played an enormous role in GM's success. The Chinese understand the assurance of currency obliges as a powerful lure. China's strategic amelioration method entail inviting foreign investors, segment of profits to foreign businesses, and preserve constricted controls while possessing the currency or revenue to remain within china. Immeasurable industry plants now invented various products in China and circulating through the world. Dunne, R. R., & Dunne, M. (2011) Revenues from trades and its entirety such as: Nike golf clubs, iPhones, and Christmas tree ornaments. Assisting in China’s accumulation foreign exchange fortune. At the physical year end of 2010, the bank in China had over 2,800,000,000,000.00 in foreign reserves. Adjacent to three trillion dollars. In comparison, foreign reserve pass on driving force, Germany 217 billion and the United States holds $135 billion. Although, there were drawbacks in regards to having negative effects after several decades, General Motors decided to relocate the plant to Mexico. Causing high impact on local culture, enormous impact on the United States, thousands of people unemployed and on unemployment. Outsourcing employment and revenue has affected the U.S. stratification results in inequality when resources, opportunities and privileges were revolted based on position in society
Joint ventures (JV) are a popular method of foreign market entry because they theoretically provide a way to join complementary skills and know-how, as well as a way for the foreign firm to gain an insider’s perspective on the foreign market. Since China began its market opening in 1978, joint ventures have been the most commonly used form of foreign direct investment (FDI), with about 70% of FDI in China in the 1980s and 1990s taking the form of joint ventures (Qui, 2005, p. 47). The Chinese company, as well as the foreign investor, has since 1978 been drawn to the joint venture form. Walsh, Wang & Xin (1999) note that from the Chinese
General Motors Corporation (NYE: GM) is the leading American automaker in the world with its operations spanning in 157 countries. The car manufacturer was established in 1908 in Michigan and today it is headquartered in Detroit, the United States of America. Besides the domestic industry of the United States of America, General Motors manufactures cars and trucks in other 30 countries around the world. Among its brand products are Cadillac, Buick, Chevrolet, GMC, GM Daewoo, Hummer, Holden, Opel, Saab, Pontiac, Vauxhall, and Saturn. Besides these brands that are owned by the automaker, GMC also operates joint ventures in China and Japan. That is, Shanghai GM and SAIC-GM-Wuling
General Motors, an American borne company established in 1908, designs, builds and distributes a wide range of cars, trucks, crossovers and automobile parts worldwide. The company’s automotive operations adhere to the demands of consumers stationed internationally through its four primary automotive regions: GM North America, GM Europe, GM International Operations and GM South America. GM North America targets and serves the demands of customers based in North America with vehicles manufactured and marketed under the Buick, Cadillac, Chevrolet and GMC brands. The demands of consumers outside of North America are primarily met with vehicles manufactured under the brands Buick, Cadillac, Chevrolet, GMC, Holden,
In 1993, GM entered the New Generation of Vehicles partnership alongside Chrysler and Ford to promote the development of more fuel efficient vehicles. This was a major step for all three automakers as they were, and still are, the main three American rival automakers. The year 2003 saw GM bow out of the defense industry when it sold GM Defense to General Dynamics; this was indicative of a renewed focus on fuel efficiency, and in 2004, GM
I will be comparing both companies General Motors Company and Ford Motor Company for the past three years. We will be able to see all the trends these two automotive manufacturers have and which one may be better to invest in by looking at the last few year’s ratios and percentages. This will give us a better understanding and the knowledge of who maybe the industry leader and who is the follower. These are both major corporations that strive off customer loyalty and both competing on a global scale to make their mark in the one of the top automotive manufacturers in the world. This analysis will give us an understanding of what lies ahead in the future for these two manufacturers.
General Motors enjoys a major market share in global automotive industry. One of its major strengths is its strong branding and market position. General Motors can be considered as one of the pioneers of modern vehicles. As per data monitor, GM had a leading share in North America and South America and in Europe it held fifth position. Similarly, it holds second position in other major segments. GM bears a strong branding. A lot of prestigious brands are provided by General Motors such as Chevrolet, GMC, Buick, Cadillac and Opal. Like Toyota, GM also has various production facilities in 31 different countries. This strong global presence allows GM to have access global markets way easily as compared to manufacturers with centralized structures. Thus, GM relies less on exports, manufactures its brands locally and is also involved in
GM has a dreadful strategic alliance with Daewoo Company (GM Daewoo) in South Korea as far as the Asian Pacific market concerned like the case indicated. GM Daewoo has started to increase sales, yet, it needs way to go. GM Daewoo is the low cost production base with its facilities in South Korea and Vietnam for some GM brands such as Hummer and Saturn and Opel of European Operations. The subsidiary made some moves to expand its operations in Europe by purchasing former Uzbekistan and Romania plants of Daewoo and Polish car maker Fabryka Samochodów Osobowych (FSO) (GM Daewo Company overview, Hoovers website, 2010, December 5).
With China emerging as a global power in business within the last decade, knowing about doing business in China has become more important than ever. There are both many advantanges and challenges with doing business in China in this modern era, and understanding both sides of this coin is the key to being successful in China. Some aspects to keep in mind include the cultural barrier, the price of the work force in China compared to the United States, and have the “made in China” brand be accepted back in the United States.
Over the years, the U. S. auto industry's market has been experiencing fluctuations due to many reasons including: price, quality and foreign competition. General Motors Corporation (GM) which had been the leading car and truck manufacturer had been experiencing declining market share and facing stiff competition from both U.S manufacturers and foreign imports such as the Asian auto producers that included Toyota, Honda and Nissan. The main reason for increased foreign competition was that foreign cars were more fuel efficient, smaller, less expensive, and often more reliable than their American counterparts.
This report will look at the feasibility, the riskiness and the profitability of an expansion into the German car market. First, we will analyze the host country, Germany, with respect to its economics, political, legal and cultural aspect. Second, a SWOT analyses will be conducted to determine if Great Motor Wall is in a good
General Motors Company, one of the world’s largest automakers, estimated in 1908. With its global headquarters in Detroit, Michigan, USA.GM employs 209,000 people in every major region of the world and does business in more than 120 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang, Opel, Vauxhall and Wuling. (Elizabeth, GM, 2009). GM was the largest automaker for 77 consecutive years from 1931 through 2007. It is longer than any other company in the world. In 2008, it was surpassed by Toyota (Elizabeth, GM, 2009).
Yes! The Chinese auto industry is attractive to BYD. Given the expected growth and demand in the auto industry, combined with Chinese government having stopped issuing production permits for new automotive companies, there are very few remaining opportunities to get in to this booming auto industry. Moreover, BYD is getting a good bargain as the assets of the state-owned Qinchuan Auto are being sold at a cheaper price. The state owned auto manufacturers without foreign partners accounted for 25% of auto sales in China. Many of the SOE manufacturers did not even have R&D departments. Because most of the automobile parts were imported, similar models of cars cost more in China than in USA. The existing foreign joint ventures were selling the vehicles at prices that gave them margins of 10% to 20%. Considering the current situation, there is room for low-priced entrants. Wang always dreamt of applying Li-ion battery technology to develop an electric vehicle. Using newer battery technology and assembling it cheaply, the vehicle could be competitively priced and represent a way for China to leap
The Chinese automobile market has grown by 1/3. This means that there is a lot more room for automobile companies like Honda to expand and grow. Honda will be able to increase its production and sales as the market will be bigger.
The several factors for the Ford and GM moved to Russian market, out of above mentioned are as follow: