The company I have the joy of analyzing is the American based automotive manufacturer, General motors.
GM has a diverse selection of brands that service different sections and consumer bases, varying from the entry level Chevrolet models, to the mid-level Buicks, or even luxury models such as Cadillac. The diversity allows General Motors to capture the attention of more than one consumer in different income brackets with different tastes. While ford is the leading auto brand in sales, With General Motor’s diverse selection, it currently sits atop US sales amongst manufacturers.
GM’s Competitors such as Ford Corp, Honda, Nissan, and Toyota all jock for position amongst the top earning automotive manufacturers. General Motors has also spread its investing potential to as many as 140 countries over various business ventures other than automotive related. To organize the international workload General motors is separated into four various sections, which is GM International Operations (GMIO), General Motors South America (GMSA), General Motor North America (GMNA), and one that I personally know of GM Financial.
General Motors also has GM Defense division, which caters to the needs of the armed forces for cutting edge technology and advanced propulsion systems for military vehicles. While General Motors has been leading global auto sales for about 77 years and amplifying their global influence, the brands in which the parent organization owns such as Chevrolet have been consistently amongst the top global sellers as well. Chevrolet is a brand that has been around since 1911, It has stood the test of time because more than 100 years later the brand is still thriving along even after suffering though the automotive industry crash of 2008 post-recession. The automotive industry was weakened by a significant inflation in the prices of automotive fuels attached to the energy crisis 2003-2008, which discouraged purchases of SUVs and pickup trucks which have low fuel efficiency. The rather high profit margins and popularity of these vehicles had influenced the US “Big 3” automotive manufacturers, Ford Corp, Dodge/Chrysler, and General Motors, to make them their initial focus.
With fewer fuel-efficient vehicles to offer to the public, sales started to decrease. In 2008, the crisis had become critical as the credit crash applied pressure to the price of raw materials. In North America, Chevrolet sells and produces a large variety of cars, from compact vehicles to medium-duty commercial trucks. On account of the eminence and brand recognition of Chevrolet as part of GM’s global presence, Chevrolet or Chevy is used often as a nickname for General Motors or the products. In 2017, according to the Mintel Report, General Motors Corporation sold about 3,002,241 vehicles at 17.
5%, which was about 400,000 more than the next Manufacturer, Ford Corp (Morgan and Company Inc, 2018). In 2017, according to the Report, Ford as a brand sold about 2,464,041vehices, which was about 400,000 more sales than the next GM Brand model which happens to be Chevrolet (Morgan and Company Inc, 2018). Mintel Report states Chevrolet sold about 2,065,883 vehicles that which would make up about 68% of General Motor’s vehicle sales in 2017 (Morgan and Company Inc, 2018). According to the Mintel Report, new vehicle sales should be halting and remain flat through, it implies that the stagnation could happen soon regardless of a healthy economy as the downturn could be attributed to interest rates, and normalization of demand following a post-recession influx (Morgan and Company Inc, 2018). While General Motors was down 1.3% in vehicles sales from 2016 to 2017, according to the Business Source Premier the company found stable ground through the increased sale of the Chevrolet pickup trucks in 2018. Despite a dip in the third quarter, including estimated double-digit drops in September, according to Automotive News, sales of the pickups are up 0.6 percent for the year through September (Wayland, M.
2018, October 8). General Motors plan of manufacturing its current pickups through the launch of the next-generation Chevrolet Silverado and GMC Sierra appears to be Maintaining but will be tested through the end of 2018. “Our brands are very well-positioned for the fourth quarter when our next wave of new products start shipping in high volume,” said Kurt McNeil, GM U.S. vice president of sales operations, citing some concern about low inventories (Wayland, M. 2018, October 8). Due to those matters, General Motors slowed down incentives.
That contributed to estimated declines of 19 percent for the Silverado and 35 percent for the Sierra, according to the Automotive News Data Center (Wayland, M. 2018, October 8). According to the IBIS world, in 2017, GM generated $145.6 billion in revenue from its global operations and the company’s market share is at 8.4% (latest data available).
Prior to the five-year period, GM filed for bankruptcy and experienced multibillion-dollar losses. The company’s bankruptcy led to restructuring that eliminated plant assets and workforce. With optimized production capacity and reduced labor costs, GM can now produce small vehicles and more fuel-efficient trucks profitably. To revamp its image and attract a new consumer base, GM has wagered on alternatively fueled vehicles advancing in the future.
Just prior to the five-year period, the company started offering the Chevy Volt, which, unlike the Toyota Prius, is always supported by its electric motors. In recent years, GM has experienced strong Volt sales, increasing 60.7% in 2016 alone.
According to IBIS World, Over the five years to 2018, revenue from GM’s US car and automobile manufacturing segment is expected to increase at an annualized rate of 2.6% to $11.5 billion. Although GM’s industry-relevant revenue is anticipated to trend higher during the five-year period, the company has struggled to maintain a positive consumer image. In May 2014, the National Highway Traffic Safety Administration fined the company $35.0 million for failing to recall cars with malfunctioning ignitions, despite being aware of the problem.
Although the fine will not significantly affect the company’s bottom line, it is anticipated to have a negative effect on its brand, which may deter sales moving forward. At the same time, sales of the company’s SUVs and light trucks have been the major driver of growth. The commercial I have selected on is a Chevrolet commercial featuring different scenes with the same salesmen and different couples sitting in front of three different size (Chevrolet, 2018).
As the commercial goes on the sales men insinuates at each vehicle size that the couple’s relationship would be at a different happy stage in their life such as marriage for the small SUV, children for the midsize, and Family trips with the pet for the Largest SUV (Chevrolet, 2018). Not only does this advertisement appeal to the family guy and Soccer mom, it also showcases the space by naming and utility of the vehicle by adding a family and pet at the larger vehicle sizes (Chevrolet, 2018). Even though in the commercial they were joking, the audience that Chevrolet were marketing to clearly understood the uses and capabilities of all 3 sizes of the Sport utility vehicles. Obviously, Chevy SUVs can be marketed to more than just the family guy or the soccer mom, however when trying to capture a different audience Chevrolet would find a way to showcase the space and utility of the vehicles to best suit the audience. For example, If Chevrolet wanted to market those same SUV’s to outdoorsmen such as campers and hunters, then they would probably showcase the space and how much you can pack into a vehicle to take with you, such as a tent, a bunch of sleeping bags, and a cooler for the smaller SUV and so forth. The advertisement is specifically tailored to an audience, however while catering it still delivers a general promotional message that the vehicle has a lot of space and utility. While analyzing General Motors Corp along with their brand Chevrolet Corp I have come across several things that I was either intrigued, fascinated or surprised by.
I can admit that I was surprised by the downturn of General motors as a manufacturer that after bankruptcy in 2011, would eventually lead to such a large rebound for them in the following 5 to 6 years. I was also pleasantly surprised to know that Chevrolet makes up more than 50% of GMs vehicles sales yearly, however I never considered commercial vehicles sales. I was intrigued about General Motors leading vehicle sales over Ford as a manufacturer, but Ford leading vehicle sales over the nearest GM brand which happened to be Chevrolet.
I considered that having more brands among your manufacturer is a double-edge sword in terms of brand management because one brand can overshadow another in terms of demand. General Motors has 4 brands that it manufactures in the US while Ford only has 2, less brands funnels buyers to the ones that happen to be available. I am fascinated by how General Motors is still able to operate in such capacity even after dropping brands in the past such as Pontiac to cut weight, after a dip in sales and a projected stagnation in such sales. I m also fascinated by the fact that Manufacturers sales are counter acting the early stages of said projection of stagnation.