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 45,000square-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

GMs vision is to be the world leader in transportation products and related services. We will earn our customers 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 Work Relationship With UAW Product Design Problems: Public Acceptance And Reduction Of Cycle Time Market Share And Profitability Ratio over a period of time Still Much To Learn About Lean Production - High Cost Producer Too 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 jointventure.

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"

GMS 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 - GMs 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. common systems & processes where

Implement possible.

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