North America- GMNA
North America is the largest automobile market in the world, estimated at around 20 million cars per year. Traditionally, the market has been dominated by the Big Three. However, their dominance has been challenged by well-known Japanese brands like Toyota, Nissan and Honda. Recently, GM announced a quarterly loss of $1.1 billion, which in turn reduced its bonds to junk status. There are many factors that are causing problems in the North American region, including the company’s high fixed costs due to health care, pension, and labour. Hence, profit margins were very thin, being only 1.4 per cent compared with GMAP (10.4%). GM had started Saturn strategy that fixed list prices, however, it could not succeed and resulted in loss of $15 billion. In addition, GM exposed two fundamental weaknesses: a huge legacy cost burden and the inability to adjust structural costs in line with falling revenue. …show more content…
From 2000 GM established complimentary alliance with FIAT hoped that this would strengthen its competitive position in Europe. They anticipated synergies and hoped to strengthen competitiveness, unfortunately, this goal was not met, and GME made a huge loss. After this, GME had yielded consistent losses, however, GM explained these consistent losses due to negative price pressure and devaluation of the U.S. dollar. (See appendix 5), Figure shows the worst financial results from 2002 to 2004, however, GME’s future success would depends on revaluation of the U.S. dollar.
Latin America- GMLAAM
At that time, Latin America is the region with the largest increase in net income to $85 million in 2004 from a loss of $331 million in 2003 and net margin also turned negative to positive. However, profit margins were also very thin, being only 1.0 per cent compared with GMAP. GMLAAM has a weakness of volatile economies. A future success of GMLAAM would depends on the rate of economic development.
Asia/Pacific-
North America is the largest automobile market in the world, estimated at around 20 million cars per year. Traditionally, the market has been dominated by the Big Three. However, their dominance has been challenged by well-known Japanese brands like Toyota, Nissan and Honda. Recently, GM announced a quarterly loss of $1.1 billion, which in turn reduced its bonds to junk status. There are many factors that are causing problems in the North American region, including the company’s high fixed costs due to health care, pension, and labour. Hence, profit margins were very thin, being only 1.4 per cent compared with GMAP (10.4%). GM had started Saturn strategy that fixed list prices, however, it could not succeed and resulted in loss of $15 billion. In addition, GM exposed two fundamental weaknesses: a huge legacy cost burden and the inability to adjust structural costs in line with falling revenue. …show more content…
From 2000 GM established complimentary alliance with FIAT hoped that this would strengthen its competitive position in Europe. They anticipated synergies and hoped to strengthen competitiveness, unfortunately, this goal was not met, and GME made a huge loss. After this, GME had yielded consistent losses, however, GM explained these consistent losses due to negative price pressure and devaluation of the U.S. dollar. (See appendix 5), Figure shows the worst financial results from 2002 to 2004, however, GME’s future success would depends on revaluation of the U.S. dollar.
Latin America- GMLAAM
At that time, Latin America is the region with the largest increase in net income to $85 million in 2004 from a loss of $331 million in 2003 and net margin also turned negative to positive. However, profit margins were also very thin, being only 1.0 per cent compared with GMAP. GMLAAM has a weakness of volatile economies. A future success of GMLAAM would depends on the rate of economic development.
Asia/Pacific-