General Motors SWOT Analysis & Competitors

Company Overview: General Motors Company is one of the largest automobile manufacturers in North America. The company was founded in 1908 and has since become a trillion-dollar multinational corporation. Learn more about General Motors SWOT analysis & competitors.

General Motors SWOT Analysis & Competitors

Product Summary:

GM’s product line includes the Buick brand, Cadillac, Chevrolet (including Buick and GMC), and GMC commercial vehicles, as well as firearms through its subsidiary, U.S. subsidiary Kongsberg Gruppen. GM also has a stake in Mitsubishi Motors and is an investor in Faraday Future with a $1 billion investment for 3% of the company.

Global Market:

GM’s global market is approximately 100 million vehicles. Business trends are driving GM to focus on making more profitable vehicles so they can invest in newer technologies. GM employs close to 230,000 workers worldwide with its largest operations in the U.S., Canada, and China.

Company strengths:

1. Diversified Products

GM has a full product line ranging from pickup trucks to vans to large SUVs, luxury cars, and passenger cars. Its plans include expanding the Cadillac brand through the launch of crossovers. Its Buick brand is also expected to introduce several new vehicle models over the next few years.

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2. Brand Strength

Buick introduced seven new models throughout 2015, including new crossovers and sedans. Cadillac also introduced two new vehicles last year, including the Escalade SUV and ATS-V Coupe performance car. 3. Global Presence GM produces vehicles in 33 countries ranging from Brazil to Germany to China under strong manufacturing practices with high-quality controls implemented throughout its supply chain.

3. Autonomous Cars

GM has gained significant experience in the realm of autonomous cars. It has partnered with Lyft to develop self-driving cars that could launch as soon as next year. GM is also working with Cruise Automation to produce the technology for a fleet of driverless taxis that are expected to hit the road in 2017.

4. Technology Leadership

GM’s Chevrolet Bolt will be the first fully electric vehicle with a range of up to 200 miles on a single charge to be produced at a large scale when it goes on sale later this year. The Bolt, which is expected to cost around $30,000, will be available first in California and Oregon before expanding into other markets next year.

5. High-Quality Vehicles

GM has received high marks for vehicles produced in recent years with vehicles reaching 100,000 miles on the road without major problems.

6. Cost-effective Production

GM’s production of vehicles is highly efficient with the company able to produce vehicles more cheaply than competitors.

7. Rapid Product Development

GM is known for rapidly introducing new vehicles with new car launches at the beginning of each year. The latest vehicle introduction was the 2016 Chevrolet Colorado and GMC Canyon. The next vehicle launch is expected to be a new version of the Chevrolet Cruze compact car which will be introduced in 2017. GM has announced plans for several new electric vehicles, including an autonomous version of the Chevy Bolt that would go into production by 2020 and be sold in North America and other markets that follow.

8. Safety

General Motors has received praise for its safety record, with its models being named one of the top ten safest vehicles by the Insurance Institute for Highway Safety since 1982 when they began tracking safety ratings. By 2015, GM had its best record ever at 14.

Company weakness:

1. Lackluster Margin Improvement

Product sales indicate GM’s primary focus on profits has been successful, but not all of GM’s products have been profitable. The company is expected to make a 1% profit margin on its sales which is down from 5% in 1997 and 1% during the recession in 2009. 2. Competitors Overhauling Their Product Lines

Several companies are out to take over GM’s market share including Ford and Toyota. The Tesla brand will also be a factor as GM focuses on electric vehicles. GM might be forced to reevaluate its strategy as competitors gain popularity.

2. Sustainability

Sustainability efforts have been challenging for the company over the past decade. The stock has been trading below $30 for many years, and investors are concerned about how long it can sustain its revenues and profits through several obstacles it faces. 2. Finding a new leader after announcing CEO Mary Barra’s retirement

3. Investor Sentiment 

GM shares have been fairly stable over the past five quarters, which shows that investors are unsure of what to expect from the company under new leadership. The stock also has significantly underperformed the S&P 500 over the past year, which shows that investors are not too bullish on GM’s future. 4. Recalls over ignition switch

4. Revenue

Revenue has been declining steadily since 2011, and net income has remained flat at around $9 billion-$10 billion for the past three fiscal years. This shows there is room for improvement in the core areas of the company’s business.

5. Advertisement

Plenty of competition in its industry including Ford and Toyota who are spending more money to advertise than GM by far. 

6. Entry-Level Salaries 

Entry-level employees at GM earn an average salary of $39,000 while their counterparts at Ford earn $45,000 and GMC starts at $40,000 and Ford and GMC each pay around $28,000 more than Toyota which pays an entry-level employee at around $28,000 during its first year of employment.

Company Opportunities:

1. Electric Vehicle (EV) –

The EV is one of the most popular research areas in the auto industry. It offers better performance than conventional vehicles; environmental benefits; and potentially lower costs for automakers, consumers, and the government. 

2. Black Box Data – 

Tracking driving data about your vehicle’s performance could provide you with information about how to improve fuel economy and enhance safety, two of GM’s main concerns. Data can also be used to receive targeted advertising campaigns based on where you go or how you drive. 

3. Autonomous Vehicle (AV) – 

The AV is another major research area that has captured the attention of many automakers, including Tesla Motors Inc., Nissan Motor Co., Toyota Motor Corp., Ford Motor Co.

4. Connected Vehicle – 

The connected vehicle offers the driver the ability to interact with keyless entry, mobile phone, entertainment system, navigation system, and other systems.

5. Hydrogen Vehicle/Fuel Cells – 

Some estimates project fuel cell vehicle sales could reach more than 1 million by 2020. This is a great opportunity for GM because it already knows how to mass-produce vehicles in high volumes. 

6. Lane Departure Warning System – 

Lane departure warning systems are expected to become mandatory in all new vehicles around the world by around 2020. GM’s current systems are about five years ahead of competitors, which makes it one of the best-positioned companies in this market sector.

Company threats:

1. High Fuel Prices –

Fuel prices are rising which will not be helpful during the next economic downturn. The government is trying to reduce oil dependency by buying up fuel stocks, which could help, but this solution will only be effective during the next recession. 

2. Environmental Regulations –

GM also faces stringent environmental regulations regarding fuel economy in all vehicles it sells. This will make it difficult for the company to build vehicles with an exciting performance in high gas mileage in high-performance vehicles.

3. Latent Labor Shortage –

GM has a situation where it has a labor shortage because there are not enough qualified employees to build the vehicles the company wants to build. There is competition from other automakers who have been able to recruit more workers.

4. Problems at GM-owned factories – 

In August 2015 GM started recalling nearly a quarter of the cars produced at an Ontario plant due to faulty parts that damaged engines and transmission systems. In the following months, GM recalled nearly 30 million cars due to faulty ignition switches that could cause a fire. This is a huge threat to a company that depends on a great reputation for its success. 

5. Reduced Spending –

Ford, BMW, Mercedes-Benz, and Volkswagen have all reduced their spending in North America due to declining demand and weak results. This means GM has fewer competitors for this market segment which could mean fewer customers buying GM vehicles. 

6. Electric Vehicle Competition – 

Tesla Motors Inc., BMW AG, Audi AG, Nissan Motor Co., Toyota Motor Corp., Ford Motor Co., and other companies around the world have been developing electric vehicles for years. This could make it difficult for General Motors to make a profit on electric vehicles. 

7. Fuel Cell Vehicle – 

The fuel cell vehicle is another energy-efficient vehicle that General Motors has been developing for years but has not yet launched as a mass-produced vehicle. The company is among the leaders in the business sector because GM already knows how to produce vehicles efficiently. However, fuel cell vehicles are expected to be more expensive than traditional cars and will not be very popular at first because there are other alternatives such as hybrid and electric vehicles that require less maintenance and do not sacrifice performance or comfort.

Major Competitors:

1. Ford Motor Company – Ford has the most number of vehicles produced worldwide with around 52 million vehicles sold in 2015. It is the second-largest global automaker after Toyota Vehicles. The company has grown rapidly by adding new stores, adding new stores, adding new dealerships, and profiting from other acquisitions. It also sells military vehicles and powertrains for alternative fuel cars.

2. Toyota Motor Corporation – Toyota is the third-largest automaker with around 49 million vehicles sold in 2015. The company has grown rapidly over the years and will no doubt continue to grow with its production of new vehicles such as the Mirai FCEV and Lexus LFA.

3. Volkswagen AG – Volkswagen is a German automaker that has a large number of brands including Audi, Bentley, Porsche, Bugatti, Lamborghini, Scania, and SEAT. The company has been growing rapidly over the past few years and will continue to grow with its most recent acquisition of Ducati motorcycles from Investindustrial SpA for about $1 billion.

4. Honda Motor Co. Ltd. – Honda is the fourth-largest automaker with around 47 million vehicles sold in 2015. The company sells motorcycles, cars, trucks, scooters, lawnmowers, and marine products to an array of clients worldwide. 

5. Hyundai Motor Co., Kia Motors Corporation – Hyundai Motor Co. is the fifth-largest automaker with around 40 million vehicles produced in 2015. The company sells its vehicles all over the world and has expanded its production of cars, trucks, SUVs, and motorcycles to more than 95 countries. 

6. BMW AG – BMW is a German automaker that has a large number of brands including Mini, Rolls-Royce Motor Cars, and Motorrad. It is also involved in other businesses such as motorcycle production and yacht building. BMW’s vehicle sales have increased rapidly over the past few years because of new models such as the X1 crossover vehicle and supercars like the M2 Coupe and M4 Gran Coupe.

7. Nissan Motor Company – Nissan is a Japanese automaker that has a large number of brands such as Infiniti, Datsun, and Altima. It is also involved in other businesses such as automotive electronics and semiconductors. Nissan sold more than 66 million vehicles in 2015 and continues to grow with the introduction of new models such as the Juke crossover vehicle and redesigned models like the Altima sedan.

8. Tata Motors – Tata Motors is a multinational automaker that has a large number of brands including Jaguar, Land Rover, and Tata. The company was founded in 1945 and has been growing rapidly over the past few decades. It also sells buses and trucks to clients in more than 100 countries around the world.

9. Mercedes-Benz – Mercedes-Benz is a German automaker that has a large number of brands including Smart, Maybach, and Aston Martin. The company has been growing rapidly over the past few years and continues to do so with the introduction of new models like the S-Class Coupe and AMG G 63.

10. Daimler AG – Daimler AG is a worldwide automaker that has a large number of brands including Mercedes-Benz, Smart, Maybach, Freightliner, Western Star Trucks (USA), Mitsubishi Fuso (Japan), BharatBenz (India), and Fuso (South Africa). Daimler AG also owns 10% of Chinese automaker BYD Company Limited.

How does the future look for General Motors?

In the future, General Motors should be able to continue its strong track record of growth, as it has for years. In 2016, it remains one of the largest automakers in the world. The company has been researching different types of hybrid and electric vehicles, as well as hydrogen fuel cell vehicles, which will allow it to consolidate its place in the market.

Although GM has been a leading automaker since the first vehicle was produced, there is still a challenging road ahead as other companies make strides toward lower cost and more efficient vehicles. General Motors must continue to be innovative by developing new technologies and new models that utilize current technology to improve efficiency. The company must also lower the costs of production for its vehicles which will help build up their profits as well as keep its customers loyal.

Conclusion:

In summary, General Motors has been a leading automaker since it introduced the first car in 1908. The company has been innovative in developing new technology and models that produce vehicles that are more efficient and less expensive. Its production of the hydrogen fuel cell vehicle is an indication of its continuous innovation in the industry and will hopefully help propel it ahead in competition with other automakers.

General Motors SWOT Analysis & Competitors

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