General Motors (GM) was formed in 1908 in Flint, Michigan under William C. Durant. GM holds nine automobile brands in total today after they sold its European brand to PSA in March 2017. They own a few of U.S. car brands which include Buick, Chevrolet, and Cadillac. Chevrolet’s share of the worldwide automobile market in 2017 reached 4.4 percent, making Chevy to be GM’s most successful brand. GM generated about 146 billion U.S dollars in revenue in the 2017 fiscal year, and they sold around 9.6 million vehicles during that time. Losing to their main competitors, Volkswagen, Toyota and the Renault-Nissan association by which each of them had a sales tally of more ten million vehicles.
Industry Size and Growth (Opportunity/Threat?)
General Motors assembles most of its cars in the United States, but they also manufacture a large percentage of its cars in Asia. For the Chinese market most of GM’s cars are produced locally. The first car to be produced in Shanghai’s GM plant in 1998 was the Buick. Unfortunately, in 2018 they announced that the company would be undergoing some staffing changes meaning that about 15 percent of salaried and salaried contract employees would be affected due to the reduction in staff.
The number of employees at GM between the fiscal year of 2010 to 2017 was around 180,000 people. GM is one of the world’s largest automakers and is the manufacturer of some of the first car brands worldwide, that include Chevrolet, Cadillac and Buick. Nearly two thirds of all GM vehicles were sold in worldwide regions outside their home market and only a little over 37 percent were sold in North America. In the year of 2016 both Toyota and Volkswagen had a higher employee base than General Motors; statistics show that Toyota had around 349,000 employees in 2016.
Presence of Economies of Scale
In the crisis of 2008 to 2009 the automotive industry for GM was in danger during the Market recession. Later in 2009 they were able to re-emerge thanks to a reform supported by the government called Chapter 11 that allowed the “new GM” to purchase operational assets from the “old GM”. Based on this reform it is estimated that the U.S government laid out over 11 billion dollars for the bailout. Since the IPO in 2010 the revenue for GM increased up until 2016 when they decided to sell their European business. None the less GM is still one of the largest automobile manufacturers worldwide. The business in North America has grown for GM’s home market operations being that they were recreated as a smaller company with less brands, less dealers, smaller number of employees and much less money owed to creditors and retirees.
Per statistics it is recommended for GM to invest in new SUVs and trucks in order to keep profit machine revved up in North America. And to also work on expensive technology to allow them to meet the grow of federal fuel economy targets. Aside from technology advancements GM must invest in cleaning European diesels and small gasoline engines that would benefit the United States being that larger gasoline engines that include eight-cylinder motors used in most pickup trucks would dominate the market. Another major change in the vehicle industry is that since 2009 most automakers had begun to transform their vehicles into captivated and intelligent devices that were to be paid for by the mile instead of purchased on payment plans.
In 2016 Buick which is GM’s primary brand in China beat Opel and Vauxhall by outselling more cars. Also, the Wuling brand of small commercial vehicles that the company builds with their partner Shanghai Automotive Industry Corp.
The following chart represents the statistics of GM’s sales and revenue streams between the fiscal years of 2013 to 2017 shown in U.S. billion dollars. Between these 5 years from 2013 to 2017 GM’s sales and revenue streams fluctuated from starting low to increasing and then going back down. In the year of 2013 GM generated sales and revenue of about 138.79 billion dollars, then in 2014 they went down to 137.96 billion and in 2015 they made even less going down to 135.73 billion in sales and revenue. But the did extremely well in 2016 their sales and revenue streams was about 149.18 billion dollars. Unfortunately, they didn’t do as well in 2017 they only generated about 145.59 in sales and revenue, they didn’t do as well as in 2016. In the year of 2017, the Detroit Big Three carmaker distributed its Opel and Vauxhall businesses, but it was still considered amongst the world’s largest automakers.