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General Motors Company Profile

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... and weak demand for high-margin sport utility vehicles crushes profits by 36 ... BBC Article: http://news.bbc.co.uk/1/hi/business/1101500.stm ... – PowerPoint PPT presentation

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Title: General Motors Company Profile


1
General Motors Company Profile
  • Prepared for
  • BAA605
  • Marketing Concepts and Practices
  • By
  • Jose Alvares
  • J. Sándor Cheka
  • John Kalengaii

2
Table of Contents
  • History of GM
  • GM Segments
  • New Offerings
  • Philanthropic Endeavors
  • Financial
  • Strengths
  • Weaknesses
  • News
  • Summary
  • References
  • Appendix A Chart Data

3
History of GM
  • General Motors began on September 16, 1908.
  • General motors began by bringing together a few
    companies under one umbrella including Buick
    Cadillac Oakland, which became Pontiac
    Oldsmobile and other small automotive companies.
  • GM was always in the business of buying other
    companies to incorporate. It believed by bringing
    in companies with different attributes, then they
    would be able to reach a broader market.
  • GM began to get into the defense contracting
    market during World War I.
  • GM had purchased 30 automotive companies by 1920.

4
History of GM
  • In 1923, GM began its dominance over the
    automotive world by becoming the leading producer
    of automobiles.
  • During this era, GM began a decentralized
    management concept which saved the company from
    financial ruin.
  • The decentralized management enabled the smaller
    division tailor their product to each segment of
    the market which they were targeting.
  • The 1950s proved to be the hay day for GM where
    it was able to capture 44 of the market.

5
History of GM
  • In the 1970s, the company was able to respond to
    the need for more gas efficient automobiles.
  • In the 1980s, GM began to acquire businesses
    which were outside the realm of automobile
    manufacturing companies.
  • The 1990s required a more conservative strategy
    for a declining market.

6
Automotive Divisions High End
7
Automotive Divisions Low End
8
Automotive Divisions Overseas
9
GM Companies Parts
  • Genuine Gm Parts
  • ACDelco
  • GM Performance Parts
  • GM Accessories
  • GM Fleet Alternative fuels
  • GM Supplier Discount
  • GM XM Satellite Radio
  • Onstar

10
GM Companies Services
  • GMAC Financial Services
  • GM Cardmember services.
  • Supply Power Commercial Finance
  • GM Business Card

11
GM Network
Companies in which GM is a majority stock holder
12
GM Components Automotive Parts Manufacturing
  • Engine Division
  • Transmission Division

13
New Offerings
14
Philanthropic Endeavors
  • Hummer and the Red Cross start a partnership
  • GM GlobalAid teams with CARE and UNICEF to start
    a disaster relief fund
  • GM is also a major corporate sponsor of the of
    MLK Jr. Memorial
  • GM started Volunteer Plus which gives 250 per
    hour for employee involvement with charities
  • GM is a corporate sponsor of Make-a-Wish
    foundation.
  • GM also donates to Americas Promise

15
GM 2004 Financial Highlights
  • Record consolidated net sales and revenues
  • Record net income at GMAC
  • Record net income and market shares at GMAP
  • Profitability at GMLAAM
  • Increase of GME losses
  • 5.2 Billion health care cost

16
GM Consolidated Sales Revenues 2000 - Est. 2006
  • Net sales Revenues as of December,31 2004 were
    193.5 billion, up 4.1 from December 2003
  • 2005 sales Q1,2,3 141.468B
  • GM expected annual sales revenues as of
    December 31, 2005 are 184.8B
  • GM 2006 Expected Sales growth rate is 5
  • Continue on the next slide

17
GM Consolidated Sales Revenues 2000 - Est. 2006
  • The decrease in 2001 was due primarily to pricing
    pressures and a decrease in wholesale sales
    volume in North America and Europe, largely to
    the currency devaluation in Argentina and pricing
    pressures throughout the GMs Latin America,
    Africa, and Mid-East regions.
  • The increased in 2002 is due to increased in
    market share in three of GMs four regions around
    the world, favorable product mix and cost
    reduction. Also, GM had record sales for of SUVs
    and trucks.
  • In 2003, the increase is also due to increased in
    market share in three of GMs four regions,
    favorable product mix and a weaker of the dollar
    in US.
  • The continue growth at GM Asia-Pacific and the
    higher wholesale volume at GM Latin
    America/Africa/Mid-East and GM Europe were the
    factors to increase the net sales and revenues in
    2004.
  • In 2005, the expected decrease in sales and
    revenues is due to higher row material prices and
    strong competition in US.

18
GM Global Sales Production
  • GM total unit sales production keep growing,
    mainly due to the growth of Latin and Asian
    markets.
  • GMNA car division sales production is jeopardized
    by the market share growth of Japanese automakers.

19
GM Profit
  • GM's 2004 profits have been crushed by excess
    capacity, high union wages, and massive
    employee-retirement obligations.
  • GM tries to restructure as high raw-materials
    costs and weak demand for high-margin sport
    utility vehicles crushes profits by 36

20
GM ROE and ROA
  • GM ability to manage investor money and assets
    has been inconsistent and inefficient.

21
GM Operating Margin Net Operating Margin
  • GM ability to generate more profit per dollars of
    sales has steadily decline over the last 2 years
  • Toyota Motor Corp. (One of the main competitor)
    has reported an increase of 10.51 for its
    Operating Margin and 14.29 for its Net Operating
    Margin

22
GM Regional Results
  • GMAP vehicle sales increase more than 14 market
    share increased by 0.7 to 9.3. The expected
    2006 Asia Pacific industry vehicle growth rate
    is 7.
  • GMLAAM vehicle unit sales up 26 market share
    increased by 1.1 to 17.4. The expected 2006
    LAAM market growth rate is 15.
  • GME increased its market share by 0.2 to 9.5
    A continued weak price and US/EUR rate forced
    GME to report a loss of 976 Million. The
    industry vehicle is expected to grow by 5 in
    year 2006.
  • GMNA net Income totaled 1.6 Billion market share
    declined by 0.8 to 27.2.The unit sales of cars
    decreased by 0.8 while the trucks sales unit
    increased by 1.
  • (Trucks sale represents 60 of GMs
    total U.S. vehicle unit sales)

23
News Health Care Cost
  • Health care cost in the United States average 15
    of gross domestic product
  • GM spends 5 Billion on health care cost for 1.1
    million employee, retirees and independents
    throughout the United states.
  • Those costs amounted to about 1500 for each
    vehicles manufactured in the United States.
  • GM competitors governments cover a large portion
    of employee and retiree health-care cost.

24
Strengths
  • Worlds number one carmaker
  • GM has 325,000 employees around the world.
  • Manufacturing plants in 32 countries.
  • Sells in 200 countries.
  • Strong brands.
  • In 2004, nearly 9 million Autos sold, up 4, 2nd
    highest total in GMs history.
  • Profitable Markets are the Asia-Pacific and Latin
    America/Africa/Mid-East regions.

25
Strengths (Continued)
  • Significant Progress to reduce cost since 2000.
  • Developing partnerships around the world.
  • New products such as Hummer H3 and Chevy HHR
  • GM has a good product offering in China, with a
    small, cheap and fuel-economy cars, minivans and
    pick-up trucks.

26
Weaknesses
  • Market share is down to 14.4 globally.
  • Capacity Utilization.
  • Too many plants and workers in North America.
  • 111,000 employees and contracts that forbid
    permanent layoffs.
  • Rebates and Sales Incentives in order to keep the
    plants running.
  • Health care burden.
  • Third Quarter Losses are 1.6 Billion compared to
    88 million one year ago.

27
Weaknesses (Continued)
  • Unprofitable Markets include the North America
    and Europe.
  • GM does not have a hybrid vehicle on the US
    market.

28
Summary
  • GM is the worlds number one carmaker.
  • GM has been profitable in the Asia-Pacific/Latin
    America/Africa/Mid-East regions, while
    unprofitable in North America and Europe.
  • China is the biggest GMs center of auto profit.
  • GMs largest market is US, and second largest
    market is China.
  • Health care cost is equal to 5 Billion.

29
Summary (Continued)
  • Lately, GM has been offering rebates and sales
    incentives, in order to keep manufacturing plants
    in operation in US.
  • GM has committed to achieve 100 of capacity
    utilization by 2008.

30
References
  • GM Company from http//www.gm.com/company/corp_
    info/
  • GM Company Profiles from http//www.gm.com/comp
    any/corp_info/profiles/
  • Business Week Article http//www.businessweek.com
    /bwdaily/dnflash/oct2005/nf20051017_7171_db035.htm
  • BBC Article http//news.bbc.co.uk/1/hi/business/1
    101500.stm
  • http//media.gm.com/servlet/GatewayServlet?target
    http//image.emerald.gm.com/gmnews/viewmonthlyrele
    asedetail.do?domain74docid19344
  • GM Letter to Stockholders 2001 from
    http//www.gm.com/company/investor_information/doc
    s/fin_data/gm01ar/download/ltr01ar.pdf
  • GM Letter to Stockholders 2002 from
    http//www.gm.com/company/investor_information/doc
    s/fin_data/gm02ar/download/gm02arletters.pdf
  • GM Letter to Stockholders 2003 from
    http//www.gm.com/company/investor_information/doc
    s/fin_data/gm03ar/download/gm03arletters.pdf
  • GM Letter to Stockholders 2004 from
    http//www.gm.com/company/investor_information/doc
    s/fin_data/gm04ar/download/gm04arletter.pdf

31
References (Continued)
  • GM Financials 2001 from http//www.gm.com/compa
    ny/investor_information/docs/fin_data/gm01ar/downl
    oad/fin01ar.pdf
  • GM Financials 2002 from http//www.gm.com/compa
    ny/investor_information/docs/fin_data/gm02ar/downl
    oad/gm02arfinancials.pdf
  • GM Financials 2003 from http//www.gm.com/compa
    ny/investor_information/docs/fin_data/gm03ar/downl
    oad/gm03arfinancials.pdf
  • GM Financials 2004 from http//www.gm.com/compa
    ny/investor_information/docs/fin_data/gm04ar/downl
    oad/gm04arfinancials.pdf
  • General Motors Corporation 2001-2004 Annual
    Report http//www.gm.com/company/investor_informa
    tion/stockholder_info/
  • GM GM and UAW reach tentative agreement on
    health care http//media.gm.com/servlet/GatewaySe
    rvlet?targethttp//image.emerald.gm.com/gmnews/vi
    ewmonthlyreleasedetail.do?domain74docid19615
  • Article by Keith Bradsher - NYTimes.com G.M.
    Thrives in China With Small, Thrifty Vans (August
    9, 2005).
  • Article by Danny Hakim NYTimes.com G.M. and
    Ford Lose Ground in Sales Again (March 2, 2005).
  • Article by Matthew L. Wald NYTimes.com - Hybrid
    Cars Burning Gas in the Drive for Power (July 17,
    2005).

32
Appendix A Chart Data
33
Appendix A Chart Data (Continued)
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