GENERAL MOTORS

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‘GENERAL MOTORS’

GENERAL MOTORS

General Motors is the worldwide leader in car manufacture, with a 17% share in the world auto market. Its products are sold in over 170 countries, and its manufacturing base is spread across 43 countries and its annual production is roughly 83 lakh vehicles.

It manufactures a variety of vehicles, like the Chevrolet, Pontaic, Cadillac, Oldsmobile, Opel, Saturn, Geo, Vauxhall, Holden and many more.At the forefront of technological innovations in the automotive sector, General Motors, since its inception in 1908, has always stood a shade above the rest. In 1911, it introduced the electric self-starter, in 1933, developed the front wheel suspension, called the Knee - Action.

OVERVIEW OF GENERAL MOTORS INDIA General Motors India, incorporated in 1994 as a 50-50 joint venture company

with the C.K. Birla Group of Companies, became a fully owned subsidiary of

GM in 1999 when GMOC bought the remaining shares. The company was

restructured in 1999 and was converted from a Public Limited company to a

Private Limited company. GM currently holds 86 percent of voting shares,

and Holden (Australia) holds 14 percent.

In India, GM strengthened its presence with new product launches Chevrolet

Optra in 2003 and Chevrolet Tavera (Multi Utility Vehicle) in 2004. Similarly

in 2006, GM India is expected to register a growth of 90% over 2005.

With sales volume going up, the market share of GM India has gone to nearly

3%. The sales volume in 2005 was 25,155 units while 2007 figure is expected to

be around 42,000 units.

FACILITIES IN INDIA The existing GM India plant was originally built by Hindustan

Motors. In 1994, GM India entered into a 50% Joint Venture partnership with Hindustan Motors and modernized the 45,000-square-meter plant near Halol, 45 kilometers northwest of Vadodara, in the western state of Gujarat.

In February, 1999, GM bought the holdings of Hindutan Motors and GM India became a 100% subsidiary of General Motors Corporation of USA. The plant produces the Opel Corsa, Corsa Sail, Chevrolet Optra, and Chevrolet Tavera. The Chevrolet Forester and Opel Vectra are sold as CBUs (Completely Built in Units) and as imported from Japan and Germany.

GM India's Dealer network and after sales support system are fully functional and provide solid backing for their customers after they purchase the product and help assure total customer satisfaction and enthusiasm.

MISSION STATEMENT

G.M. is a multinational corporation engaged

in socially responsible operations, worldwide.

It is dedicated to provide products and

services of such quality that customers will

receive superior value while our employees

and business partners will share in our success

and our stock-holders will receive a sustained

superior return on their investment.

THE G.M. VISION

GM’s vision is to be the world leaderin transportation products and

related services. We will earn ourcustomers’ enthusiasm through

continuous improvement driven by the integrity, teamwork, and innovation

of GM people.

SWOT ANALYSIS

STRENGTHS

Size and market share Technology potential New leadership Quality improvement and perception thereof Model acceptance has improved Benefits derived from adopting to the new strategies Structural apporach and relationship

WEAKNESSES

Failure To Make Technology WorkRelationship With UAWProduct Design Problems: Public Acceptance And

Reduction Of Cycle TimeMarket Share And Profitability Ratio over a period of

timeStill Much To Learn About Lean Production - High Cost

ProducerToo Much Vertical Integration

OPPORTUNITIES

Use of knowledge gained from saturn experince and toyota (nummi) joint venture.

Expansion of their global presence. Continue to build on the newfound customer

confidence. Changing consumer demand for new model types and

styles expansion and leadership

THREATS

Domestic and foreign competition

Consumer lawsuits Foreign legislation and regulation

Declining quality of the infastructure in this country

FOUR WHEELERS PRODUCT RANGE CARS

Chevrolet-Aveo

Chevrolet Optra

Chevrolet Tavera

Chervolet Tavera Neo

Opel Astra

Opel Corsa

WHAT IS GM'S STRATEGY IN INDIA?

GENERAL MOTORS is one of the largest corporations in the world. In

1999, based on foreign asset holdings, the UN's World Investment Report

(2001) ranked it No 4 among the top 100 transnational corporations.

GM has expanded through greenfields too but makes foreign acquisitions

also a part of its global strategy.

India has a fraction of GM's total foreign assets of $68.5billion (25 per cent

of total assets).

GM continued its subtle Indian presence through technical collaboration

with Hindustan Motors, India's flagship car company until 1985. It is this

partnership that brought GM and HM together in the 50:50 Halol joint-

venture.

GM as an American company in India is making a

German product for the Indian market, using imported

Brazilian engines, and using Indian labour and

components. Local content is 60-70 per cent.

It is also true that GM has deep pockets and its Indian

operation is minuscule. Yet, we should not forget that

GM can expand by acquiring foreign companies. So far it

really has not acquired much except to buy HM's 50 per cent

share.

A few years ago it secured a 20 per cent stake in Fiat.

While GM has allowed these companies to run

autonomously, capturing market share through

acquisition is a sound strategy for global expansion.

INDIAN STRATEGY 1. GM has stakes in Suzuki Motors (20 per cent), Isuzu (49 per cent),

and Fuji Heavy Industry (makers of Subaru 20 per cent).

2. Furthermore, Government has initiated the gradual process of

privatisation. With the latest disinvestments, Suzuki has even firmer

control in India and, indirectly, GM.

So what does this all amount to?

1. GM's grip on the Indian market may be far greater than what meets the eye: A 100 per cent affiliate, indirect engagement through Daewoo and Suzuki, and a partner in India's largest auto venture MUL

NEW GLOBAL STRATEGY OF GM They are focusing on four key things," said General Motors

President and Chief Operating Officer:

Leveraging our capabilities as a single GM global automotive unit

Driving for stretch results

Pursuing goals with a sense of urgency

Product success around the globe

WHY GM IS SERIOUS ABOUT BUYING CHRYSLER?[AS A PART OF GLOBAL STRATEGY]

General Motors has a detailed strategy for merging the two car companies. But it still needs a bargain price and union concessions to make the deal work.

There now no doubt that General Motors (GM) is interested in Chrysler. It's even more obvious that its German parent, Stuttgart-based Daimler Chrysler (DCX), wants to cut it loose. GM executives have recently looked closely at the benefits of a deal, even before Daimler Chairman Dieter Zetsche said he would consider selling the company.

GM executives have also war-gamed specific strategies for cutting costs and streamlining operations if they do acquire Chrysler. They have picked through various product lines to determine whether two or more can be built on the same platform to trim costs and simplify purchasing.

GM executives also see an opportunity to improve Chrysler's profitability by buying parts from around the globe.

‘OUTSOURCING STATEGY’ OF GM

Many companies have their own technology and process standards, but getting suppliers to conform to those standards is no mean feat -- unless the company is General Motors (GM). With $15bn (£7.5bn) in IT spending on the table, the car manufacturing giant has plenty of leverage to get what it wants from suppliers

Earlier this year, the company concluded a monolithic, 10-year outsourcing agreement with Electronic Data Systems (EDS), broke up the work and awarded the bulk of $7.5bn (£3.75bn) in new contracts to a small group of service firms that included EDS, IBM, Capgemini, Covisint and Wipro. It also moved to shorter, five-year agreements.

The changes at GM were driven by the need for cost savings and greater flexibility and the need to re-engineer the way the company operates IT globally.

GM outsources most of its IT operations and has about 2,000 employees who handle "strategic management of information technology"

GM’S ‘E-BUSINESS STRATEGY’ GM's labor costs are fixed, meaning they remain the same regardless of what

the volume of sales is. GM wanted to keep factories open as much as possible.

"Analysts added that the reason for the decline in GM's US market share

was that it had failed to introduce new models that customers wanted in

quick time. To address this challenge, GM made e-business a strategic

priority. It wanted to reinvent itself by embracing e-business across its

value chain.

In August 1999, after a year of research in collaboration with Forrester

Research , GM launched a business division called e-GM that was responsible

for all of the company's websites and its OnStar communication system .

Through this initiative, the company planned to reduce costs, improve

quality and boost demand for its products.

HYBRID STRATEGY’ OF GM General Motors Corp. offered detailed plans to boost the fuel economy

of its most popular cars and trucks by as much as 50 percent,

beginning with two pickup trucks in the 2007 - model year. Overall

gains in fuel economy will range from 15 percent to 50 percent, with the

biggest increases going to the 2008 version of the compact Saturn VUE sport

utility vehicle.

GM will rely on hybrid gas-electric technology, and possibly hybrid

diesel-electric engines, to dramatically crank more miles per gallon.

GM is the world's largest car company. If it is successful in winning

widespread consumer acceptance of hybrid petroleum-electric

vehicles, it could change radically the kinds of engines and propulsion

systems that could go into future cars and trucks.

‘REUSE STRATEGY’ OF GM Parts reuse based on a common database will reduce

engineering time, save money, and serve global ambitions.

When General Motors Corp. set out to design its Cadillac XLR, a flashy new two-passenger roadster with a retractable hardtop, it borrowed the frame from Chevrolet's Corvette, a classic American sports car.

GM is expanding its parts database of 40,000 3-D CAD models--representing everything from gas caps to headlamps to suspension systems--for its North American vehicles to incorporate information on parts used in cars built for the European and Asian markets, which often conform to different regulatory requirements and standards.

KEY FINDINGS Cost - GM’s cost is too high as compared to its competitors Quality – GM has marginal quality products, but due to the

competition it has been continuously upgrading, with the help of its product quality attributes

Product line and segmentation - price and function wise G.M. is ok

Suppliers - G.M. is too vertically integrated Buyers – Buyers of General Motors generally are of those who

prefer Sport utility and pick-ups vehicles. New entrants - Not likely a threat GM's operations in India combine Indian ingenuity, American

management know-how and German engineering to produce premium automobiles in a world class manufacturing environment.

RECOMMENDATIONS

Focus resources on core products, cars, & trucks.

Realignment of organizational structure to support core products and meet costs & quality goals.

Example: self managed creative work teams to figure out how to speed-up product development & improve product development.

Implement common systems & processes where possible.

Balance needs of employees and unions with needs of the company.