Financial Analysis: General Motors

Financial Analysis: General Motors

Background

General Motors Company (GM) was established in 1908. The companies begin acquiring in the same year with the acquisition of Motors Works. Fisher Body was established in the same year by Charles, Fred, and Albert Fisher. In the succeeding year, Cadillac was acquired for around USD 5.6 million. Then in 1910, Oakland Motor Car was acquired in 1910. The company has focused on acquisition strategy since the very beginnings.

On June 8th (2009), the company was filed for Chapter 11 re-formation. The US subsidiary of GM was forced to bankruptcy. The shareholders were not allowed to access assets in Europe and Asia. The company successfully emerged from Chapter 11 reorganization in July 2009. The GM shares were listed on NYSE and TSE (Toronto Stock Exchange) in 2010, again, with an IPO of USD 23 billion. The company was originally listed on NYSE in 1916 (Datamonitor, 2011).

Major Lines of Business

General Motors is mainly engaged in the development, design, marketing and manufacturing of automotive in various major markets of the world. The company manufactures automobiles in around 31 countries, in collaboration with different strategic partners. General Motors manufactured around 8.8 million vehicle brands, incuding Wuling, Vauxhall, Opel, Jiefang, suzu, Holden, Daewoo, GMC, Chevrolet, Cadillac, and Buick. The operations of the company are expanded in around 118 countries.

All of company's parts, trucks and cars are marketed through retailers in North American regions, and through dealers and distributers outside of North American regions. These dealers and distributors are owned privately. The company operated around 20,200 authorized dealerships, by the end of 2010, which included 4,400 in the US, 460 in Canada, and 240 dealers in Central American regions. Additionally, GM also has 15,000 distributing centres throughout the world, which include parts outlets, service, authorized sales, dealers, and distributors. The company sold around 8.4 million automobiles worldwide (Datamonitor, 2011).

GM operates in five business segments including GM Financial (General Motors Financial Company), GMSA (GM South America), GMIO (GM International Operations), GME (GM Europe), and GMNA (GM North America).

GMNA caters the needs of North American customers, involved in the development, manufacturing and marketing of various brands such as GMC, Chevrolet, Cadillac and Buick. The demands of other customers is catered through the development, manufacturing and marketing of brands such as Daewoo, Chevrolet, Holden, Isuzu, Cadillac, Buick, Vauxhall, GMC and Opel. GMNA operated a network of more than 5,000 dealers in 2010. The unit manufactured around 2.8 million vehicles and sold more than 2.6 million units (Datamonitor, 2011).

Market Share and Ranking

General Motors has maintained leading market share in various markets. GM leads in the North American region with 18.2 percent market share. The company holds number 1 position in the US with a share of 8.9%. The company embraced second position in international operation segment (the Middle East, Africa, Eastern Europe, the Commonwealth of Independent States, Russia, and Asia-Pacific). The market share is 8.7 in this segment. Additionally, the company is number 1 in Chinese market and leads in the South ...