Strategic Management at General Motors

Today’s society judges people on the type of car you drive. Society does not like to admit to this but it is very true. Manufactures know this happens and targets their markets by these thoughts. Anyone who drives a nice vehicle is thought to be wealthy. No one wants to be seen driving an unattractive piece of junk because of what other people will think of him or her. Consumers also just feel better when they are driving a nice or new car, if makes them feel better about themselves.

The industry for superior luxury cars is a highly exclusive one with a few automotive makers making their presence felt. The major market share is held by Porsche which is known to have formidable rivals like Benz and BMW. The SUV supercar segment is a highly evolving one where manufacturing style localities and units are the decisive forces that ultimately culminate towards the cost of the car.

In an ever growing automobile market where growth of Luxury segment is something which is noticeable. Rising demand of luxury cars in Asian markets, changing lifestyle & growth rate of 33% in developing nation like India is something due to which the sales are rising and people are foraying into this premium segment of cars.

General Motors Company was founded as a holding company to consolidate several different motor companies producing Buick, Oldsmobile, Cadillac, Oakland and more in 1908 by William C. Durant. In 1912 they came out with an electric self-starter making the hand crank obsolete. In 1920 Durant was forced out of the company and Alfred P. Sloan Jr took over as president. Sloan reorganized the company into 5 main divisions Cadillac, Buick, Pontiac, Oldsmobile, and Chevrolet. In 1929 GM surpassed Ford to become the leading American passenger-car manufacturer and in 1941 they were the world’s largest manufacturer of motor vehicles. In 1997 GM suffered heavy losses and had to close many plants, then in 2004 they discontinued the Oldsmobile brand. In 2008 Toyota surpassed GM and was named the world’s largest automaker. At the end of 2008 the auto companies were in trouble and president Bush announced the bail-out of ‘The Big Three” automakers – Chrysler, General Motors, and Ford. GM filed bankruptcy in June of 2009, reorganized and emerged from bankruptcy a month later. They discontinued the Saturn and Pontiac brands in 2010, this left GM with only four divisions: Buick, Cadillac, Chevrolet, and GMC. In 2010 GM rejoined the stock market and a year later were renamed the largest automaker in the world. In 2015 GM was the third in auto sales behind Toyota and Volkswagen.

Let’s put into consideration that all major automakers are planning to launch or have launched electric/hybrid vehicles, which will increase the competition widely in the next years.

The increases in oil prices have caused the demand for Sports Utility Vehicles and light trucks to decline as consumers are now vying for more fuel efficient vehicles in an attempt to save costs on transportation. The flux in consumer preferences has proved to be positive for German, Japanese, and Korean manufacturers as they have seen an increase in the market shares in the industry. The American industry is still developing strategies to adapt his product line to meet the needs of consumers with the change in preferences.

America, a nation which when it comes to cars has historically sided on the bigger is better side of the spectrum is being invaded by smaller, more economically conscious vehicles. Fiat has been manufacturing smaller for years, overseas in Europe, Brazil and even China. With the acquisition of the American made Automotive company Chrysler in 2009, Fiat has launch a marketing campaign to finally gain a hold in the American market. Is America ready for “Every Once in a while, something comes along so powerful in concept, so revolutionary in design, it redefines a generation – America, get ready for the one and only FIAT 500.

General Motors Corporation (GM) is another leader in the automobile industry. It is located in Detroit and operates in almost 157 countries. It has close to 207,000 employees. Its products are Chevrolet, GMC, Buick and Cadillac. GM revenue was almost $155.4 billion globally during 2013 (Ruiz, 2014).

Demand for American cars remained strong. Sales of American cars were around 16.5 million in 2007. A global recession brought this figure down to 10 million in 2009 and significantly reduced Big Three profitability. U.S. automakers

As I wrote earlier, Ford, General Motors and Chrysler are called “big three”. They used be the best of best and still are. But the appearance of those companies such as Toyota, Honda, Nissan, Volkswagen and FIAT make the industry more competitive. Now, we (consumer) have more choices which car to buy and that 's how the industry become more and more competitive. According to the Motley Fool, Toyota sold 10.23 million vehicles in 2014 and ranked number one (Rosevear, 2015). Volkswagen group ranked the second, it sold 10.14 million vehicles in 2014 (Rosevear,2015). Finally, General Motors the company from the United States ranked the third place, it sold 9.92 million vehicles worldwide in 2014, falling to third place in a race that it led as recently as 2011. But GM is under different management these days, and CEO Mary Barra is focused much more on the company 's profitability than she is on its sales rankings. Given that GM 's profits have trailed its global peers ' for years, that 's absolutely the right emphasis now (Rosevear, 2015). And Ford

Fact #2: (Market Segmentation) The geography segmentation of the new cars market in the America’s is mostly held by the USA at 76.1% of the market worth 247.1 Billion. This is followed by Canada with 4.6% worth a measly 15.0 billion dollars comparatively. (New Cars in Canada, 2016)

As income of people is rises and once the economy gets stable, the demand for automobiles will also increase.

Europe’s beleaguered auto industry endured a six-year slump, with auto sales falling to the lowest level in nearly two decades, as a sluggish economic recovery put a brake of spending. However, going by the recent data trend, the industry is headed for a revival this year. European auto sale increased 7.6% in February, marking the sixth-straight month of sales increase, as steady economic recovery in Italy, Portugal and Spain spurred demand for new cars, according to the Association of European Carmakers (ACEA). The improving consumer confidence, amid a recovering economy, is likely to drive a 2% to 3% upside in 2014.

One of the most profitable industries around the world is the automobile industry, It forms a big difference in countries economy, In early 1960 Egypt like any other developing country shifted from agriculture country to manufacturing country started by Al-Nasr automotive company, there are many factors that may affect increase or decrease on demand over cars , will discuss few of these factors such as political factors, economic factors, expected future prices for cars and income of consumer or buyer, let's have an over view in the automotive industry in Egypt through the trend shown below from 2014 till 2020. The automobile manufacturing sector is one of the sectors that have faced continuous growth. Egyptian Automobile Manufacturers Association (EAMA) data show total vehicle demand in the Egyptian market increased from 70,834 units in 2003 to 227,488 units in 2007; an increase of over 200% in 5 years. Cars assembly production continues to increase and has reached 101,319 vehicles in 2007; increasing by 118% from 46,422 units in 2003. With few successes and many failures over the past five decades, the car industry in Egypt developed as an assembly operation rather Than manufacturing. This essay discusses the economic factors that are affecting the demand for automobiles in Egypt. (Kara, 2015)

The buyer decision process of a typical Porsche customer focuses on selecting cars that reflect their high social status, their financial power, and their preference for exclusive products. They are not interested in the utility or price of the cars in comparison with other customers that are interested in how much the car costs, its size, or its fuel economy performance. Porsche buyers also take into consideration the car's performance, but they focus on the sensations they have when driving such a car.