GM recorded revenues worth $192,604 million during the fiscal year ended December 2005. GM also owns equity partnerships in some regional subsidiaries and joint ventures like New United Motor Manufacturing (NUMMI), Suzuki Motor Corporation, Isuzu Motors, Shanghai GM, SAIC-GM-Wuling Automobile Company and CAMI Automotive.
General Motors has been facing stiff competition from the likes of AB Volvo, Capital One Financial Corporation, DaimlerChrysler AG, Fiat S.p.A., Ford Motor Company etc. for quite some time now. Owing to increased competition and reduction in margins General Motors Europe announced, during 2004, that it'll be resorting to the reduction in its annual structural costs by about 500 million by 2006. The plan included a reduction in the workforce by about 12,000 over this period. Considering such a scenario, the company requires to determine the priorities it should accord to certain products, so that better profit margins and long-term value creation can be ensured. BCG Matrix i.e. Boston Consultancy Group matrix is a very useful tool for identifying the products which contains both high-growth products in need of cash inputs and certain low-growth products which generate lot of cash. It's a two-dimensional matrix, depicting market share and market growth.
Leading market position: GM has consistentl...
In US it is the league of the big three with Ford and DaimlerChrysler. GM also has a strong market position in the UK, Germany, Brazil, Australia and China.
Robust revenue growth in Asia Pacific: The Asia-Pacific region has proved to be very encouraging and having immense potential for the company. Despite the challenges in the Asia-Pacific region, GM recorded strong revenue growth in this region with continued strong performance by Shanghai GM in China and Holden in Australia. For 2003, GM Asia Pacific (GMAP) earned $577 million, more than three times the net income of $188 million in 2002. Company is also aggressively expanding its operations in India, another big market in the region. Such a strength in this region helps the company to offset its losses in some other regions.
Strong brand portfolio: GM has a strong brand portfolio. The company has on board global brand names like Saab, Chevrolet and Cadillac.
North America and Europe Continue to be loosing grounds: General Motors's largest geographical market, North America, accounting for nearly 75% of the total revenues, continues to show decelerating momentum. GM North America (GMNA) could earn $1.2 billion, down from $3.1 billion in 2002. Company has partially attributed this slowdown in profitability owing to the higher pension and health-care costs in the U.S, but the cause of worry for GM is its dwindling market share in US, which came down to 28.0 percent compared with 28.3 percent in 2002. Similarly for 2003, GM Europe (GME) had a loss of $286 million, an improvement from the $549 million loss in 2002.
Large post retirement liabilities and high debt: GM has large unfunded other post retirement benefit obligations and high debt. As of now for every