Arvind 09P130

Jai kant 09P143

Karan 09P147
Sanjay 09P153
Saurabh 09P168
Shweta 09P172
 18th largest corporate entity

 3rd largest automaker

 Fortune Global 500(2008)

 World's 2nd largest automaker(Revenues)

 GM’s corporate structure: decentralized operations
 Unable to adapt to the competition
 Cannibalization of brands by newer brands
 GM continued to churn out oversized gas-guzzlers
 Japanese flooded the U.S. with small, fuel-efficient cars
 Quality issues in their own small cars
 No styling offered in the new fleet of cars
The company that had thrived by making a car
for every buyer forgot how to make cars that
most people wanted to buy

On July 10, 2009 GM emerged from a Chapter 11

bankruptcy reorganization and is now majority owned
by the United States Treasury and Canadian
governments
 Standards call for fleet of new vehicles
 Used car buyers are showing less interest in
smaller cars
 Residual values for small cars have plummeted
while they have gone up for large cars and SUVs
 Pickup truck prices plummeted 17 percent in
value from August 2007 to August 2008, they
have risen 23 percent since then
 Compact car prices went up by 17 percent from
August 2007 to August 2008, but have fallen 15
percent since then
Small car buyers were unhappy with their
vehicles “'It does what I want, but it doesn't
have what I want. It doesn't have the features,
the power, the room, and next time I'll opt for
a bigger car.“
 In the AutoPacific study, based on more than 32,000
new car and light truck buyers in the United States
 Features:
◦ 30 percent said they wanted more power than they have in
their current small car
◦ 25 percent wanted more cargo room
◦ 18 percent want more room in general
◦ 25 percent want more technology
◦ 22 percent wanted a softer ride
◦ 18 percent wanted more safety
 New Purchases
◦ 49 percent of the owners of the smallest cars said they
would buy a compact sedan
◦ 35 percent said they would buy a midsize sedan
◦ 18 percent said they would buy a compact crossover or SUV
 Totally electric car a totally far concept
 No demand for totally electric cars
 Low power
 No real range of electric vehicle
 So cannot be trusted for long distances
 Very few prototypes by major companies
 Very high premium asked
◦ Chevvy Volt is estimated to cost $48,000
◦ Chevvy aveo, Toyota Corolla, and other models
range between $12,000 and $15,000
◦ Petrol savings for an average driver come upto
$706 per year
◦ That takes more than 45 years to get aligned by the
premium
 Also a spreading view that hybrids aren’t as
green as they are touted to be
 Too huge a competition in this segment
◦ Will face immense competition from Japanese
automakers at home
◦ In other countries like India, China will face huge
competition from local automakers to cut costs
◦ Even if they do make sale, margins earned on this
product will be very narrow
 Also small cars not GM specialty or forte
 High costs to setup the technology
 Cars are prohibitively costly
 Technology will arrive in a few years(more

than 5)
 Developing nations will take even more time

for the technology

 GM will need a product to survive all these

years
 Customers want a car that gives proper fuel
efficiency without compromising on power
 Customers want a car that looks compact

without looking petty

 Customers associate GM name to big rides

with big engines

 The customer is willing to pay more if your

car stands out, but not a whole lot more

 GM name still a huge brand in countries like

India & China unlike in the U.S.

 GM has the strong backing of multiple in-
house brands
 Huge untapped markets in developing

nations
 Increased awareness and mobility amongst

the middle class

 Potential for compact cars still exists in many

nations outside US
 Not a single car wins all strategy!!
 Innovation is the key
 Focus attention on:

◦ Fuel efficiency – 4 cylinders vs. 6 or 8 cylinders

◦ Styling – Larger space but packed compactly
◦ Handling – Easy to drive but rules the road
◦ Convenience – Keyless entry and ignition,
monitoring systems, auto-parking systems and
other technologies
◦ Cost – Economical and at the same time maintain
residual value
 Two-Mode Hybrid System

◦ GM has massaged the SUV’s exterior to improve airflow with a

deeper front airdam
◦ The big V8 can switch from running on eight to four cylinders,
and thanks to an Active Fuel Management system, it can run in
the fuel-sipping four-cylinder mode longer and more
frequently.
◦ GM says the system can operate in electric-only mode all the
way up to 30 mph for about a half mile
◦ The hybrid system adds about 300 pounds to the sport-ute’s
curb weight, so Chevy uses an aluminum hood and tailgate to
shave pounds.
 Purely electric cars, fuel-cell powered cars
etc. are prohibitively costly at this stage
 Launch smart cars in the sedan segment or
cross-over segment in US
 Launch small cars and luxury sedans in Asian
markets
 Introduce new technology like hybrids in a
phased manner, first in developed countries
and then in the developing nations when
sourcing of material or import duties get
reduced