GENERAL MOTORS

General Motors

General Motors

Introduction

General Motors Corp. is the world's largest vehicles manufacturer. Founded in 1908, GM has been the global automotive sales leader since 1931, having 32 manufacturing operations in 32 countries and its vehicles sold in more then 190 countries. General Motors today reported net income of 901 million in the second quarter. GM Asia Pacific earned a record $163 million in the second quarter of 2003, more than four times the $39 million earned in the year-ago quarter. Strong financial results at Shanghai GM and GM's Australia-based Holden continued to drive improved financial results along with improved equity earnings from GM's Japanese automotive alliances and lower-than-expected start-up losses at GM Daewoo Auto & Technology Co. (GM, 2003)

Products and Services

The purpose of this review is to deem the feasibility of the launch of GM Daewoo's Kalos into the China market, termed Project "redSEDAN". Kalos (See appendix 1 for detailed specifications), would come in 2 models, a 5-door and a 4-door model. Both contain state-of-the-art designs and technology which are spacious and cosy on the inside and boost fantastic performance. It is also a fuel-efficient clean car that will ensure savings on fuel and minimum harm to the environment. Available in 10 special color coating, there is sure to be one that will suit the preferences of consumer.

GM Daewoo Kalos comes with 3 year warranty or a 100,000km factory-backed warranty whichever comes first. Also included is AA 24 hour Road Service with every new car sold. So when the unexpected does happen, help would be available 24 hours a day, 365 days a year, anywhere in the country. (Daewoo, 2003)

External Environment

The Economy

China, a highly developing country has joined World Trade Organization (WTO) on 2001 opening up a market full of potential. In the first year of WTO entry, China has achieved a comparatively stable and predicable international trade environment, with an unexpected export growth rate of 9.9 percent registered for the first quarter amounting to 2356.26 billion yuan. China's economy by 2050 would be the largest in the world exceeding that of North America. (Statistic China, 2003)

Market Analysis

General

Along with the growth in the economy, the government has radically reformed the country's infrastructure, and transportation has been a key part of this reform. Not only are more new roads being built, but new city and town development is now designed much more with the needs of a traveling public in mind. The traveling public is increasingly aspiring to own a car. Although public transport has improved greatly in recent years, rising average consumer incomes have meant that Chinese consumers have started to set their aspirations much higher, and are not only wishing to buy cars, but are increasingly able to afford to buy.

This is especially so as Chinese retail banks now offer loans for car purchase. Car insurance policies are now more common, and can even be taken out over the Internet. Government taxes and official red tape is being reduced, making the car buying process ...