General Motors
Company Profile
Prepared for:
BAA605
Marketing Concepts and Practices
By:
Jose Alvares
J. Sándor Cheka
John Kalengaii
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Table of Contents
History of GM
GM Segments
New Offerings
Philanthropic Endeavors
Financial
Strengths
Weaknesses
News
Summary
References
Appendix A: Chart Data
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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.
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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 1950’s proved to be the
hay day for GM where it was
able to capture 44% of the
market.
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History of GM
In the 1970’s, the company was able to respond to the need for
more gas efficient automobiles.
In the 1980’s, GM began to acquire businesses which were outside
the realm of automobile manufacturing companies.
The 1990’s required a more conservative strategy for a declining
market.
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Automotive Divisions:
High End
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Automotive Divisions:
Low End
7
Automotive Divisions:
Overseas
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GM Companies:
Parts
Genuine Gm Parts
ACDelco
GM Performance
Parts
GM Accessories
GM Fleet
Alternative fuels
GM Supplier
Discount
GM XM Satellite
Radio
Onstar
9
GM Companies:
Services
GMAC Financial
Services
GM Cardmember
services.
Supply Power
Commercial
Finance
GM Business
Card
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GM Network
Companies
in which GM
is a majority
stock holder
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GM Components
Automotive Parts Manufacturing
Engine Division
Transmission
Division
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New Offerings
13
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-aWish foundation.
GM also donates to
America’s Promise
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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
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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
16
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 GM’s Latin America, Africa, and Mid-East
regions.
The increased in 2002 is due to increased in market share in three
of GM’s four regions around the world, favorable product mix and
cost reduction. Also, GM had record sales for of SUV’s and trucks.
In 2003, the increase is also due to increased in market share in
three of GM’s 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
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higher row material prices and strong competition in US.
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.
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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%
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GM ROE and ROA
GM ability to manage
investor money and
assets has been
inconsistent and
inefficient.
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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
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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
truck’s sales unit increased by 1%.
(Truck’s sale represents 60% of
GM’s total U.S. vehicle unit sales)
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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.23
Strengths
World’s 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 GM’s history.
Profitable Markets are the Asia-Pacific and Latin
America/Africa/Mid-East regions.
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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.
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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
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$88 million one year ago.
Weaknesses (Continued)
Unprofitable Markets include the North America and
Europe.
GM does not have a hybrid vehicle on the US
market.
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Summary
GM is the world’s 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 GM’s center of auto profit.
GM’s largest market is US, and second largest
market is China.
Health care cost is equal to $5 Billion.
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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.
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References
GM – Company from: http://www.gm.com/company/corp_info/
GM – Company Profiles from:
http://www.gm.com/company/corp_info/profiles/
Business Week Article:
http://www.businessweek.com/bwdaily/dnflash/oct2005/nf20051017_7171_d
b035.htm
BBC Article: http://news.bbc.co.uk/1/hi/business/1101500.stm
http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.g
m.com/gmnews/viewmonthlyreleasedetail.do?domain=74&docid=19344
GM – Letter to Stockholders 2001 from:
http://www.gm.com/company/investor_information/docs/fin_data/gm01ar/do
wnload/ltr01ar.pdf
GM – Letter to Stockholders 2002 from:
http://www.gm.com/company/investor_information/docs/fin_data/gm02ar/do
wnload/gm02arletters.pdf
GM – Letter to Stockholders 2003 from:
http://www.gm.com/company/investor_information/docs/fin_data/gm03ar/do
wnload/gm03arletters.pdf
GM – Letter to Stockholders 2004 from:
http://www.gm.com/company/investor_information/docs/fin_data/gm04ar/do
wnload/gm04arletter.pdf
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References (Continued)
GM – Financials 2001 from:
http://www.gm.com/company/investor_information/docs/fin_data/gm01ar/do
wnload/fin01ar.pdf
GM – Financials 2002 from:
http://www.gm.com/company/investor_information/docs/fin_data/gm02ar/do
wnload/gm02arfinancials.pdf
GM – Financials 2003 from:
http://www.gm.com/company/investor_information/docs/fin_data/gm03ar/do
wnload/gm03arfinancials.pdf
GM – Financials 2004 from:
http://www.gm.com/company/investor_information/docs/fin_data/gm04ar/do
wnload/gm04arfinancials.pdf
General Motors Corporation 2001-2004 Annual Report:
http://www.gm.com/company/investor_information/stockholder_info/
GM – GM and UAW reach tentative agreement on health care:
http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.g
m.com/gmnews/viewmonthlyreleasedetail.do?domain=74&docid=19615
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
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Drive for Power (July 17, 2005).
Appendix A: Chart Data
GM CONSOLIDATED SALES & REVENUES
Annual Income Statement
Total Net Sales ($ Billions)
12/31/2000 12/31/2001 12/31/2002 12/31/2003 12/31/2004 12/31/2005 12/31/2006
184.6
169
177.8
185.8
193.5
184.8
194
GM GLOBAL SALES PRODUCTION (Thousands Units)
Year
CAR GMNA
TRUCK GMNA
Total GMNA
GME
GMLAAM
GMAP
Worldwide
2000
2,892
2,880
5,772
1,993
544
185
8,494
2001
2,365
2,745
5,110
1,842
575
256
7,786
2002
2,458
3,182
5,640
1,770
561
307
8,278
2003
2,184
3,277
5,461
1,818
547
420
8,246
2004
2005 est.
1,997
1,831
3,223
3,045
5,220
4,876
1,829
1,864
716
777
1,333
1,588
9,098
9,105
GM PROFITS
Year
Net income ($ Millions)
2000
4,452
2001
601
2002
1,736
2003
3,822
2004
2,805
GM ROE and ROA
Return on Equity (%)
Return on Assets (%)
12/31/2000 12/31/2001 12/31/2002 12/31/2003 12/31/2004
14.75
3.05
25.48
11.33
10.12
1.47
0.19
0.47
0.64
0.58
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Appendix A: Chart Data
(Continued)
GM x TOYOTA: OPERATING MARGIN and NET OPERATING MARGIN
Annual Income Statement
GM Operating Margin (%)
GM Net Operating Margin (%)
TOYOTA Operating Margin (%)
TOYOTA Net Operating Margin (%)
12/31/2000 12/31/2001 12/31/2002 12/31/2003 12/31/2004
16.32
12.98
12.94
15.11
14.83
2.41
0.34
0.93
2.06
1.45
12.41
12.33
12.76
13.8
15.25
3.16
3.51
4.08
5.88
6.72
GM REGION RESULTS: NET INCOME ($ Millions)
Year
GMAP
GMLAAM
GME
GMNA
2000
-233
26
-676
3174
2001
-57
85
-765
1270
2002
188
-181
-1011
2992
2003
577
-331
-504
811
2004
729
85
-976
1583
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