General Motors Company Profile Prepared for BAA 605

General Motors Company Profile Prepared for: BAA 605 Marketing Concepts and Practices By: Jose Alvares J. Sándor Cheka John Kalengaii 1

Table of Contents History of GM GM Segments New Offerings Philanthropic Endeavors Financial Strengths Weaknesses News Summary References Appendix A: Chart Data 2

History of GM General Motors began on September 16, 1908. General motors began by bringing together a few companies under one umbrella: including: Buick; Cadillac; Oakland, which became Pontiac; Oldsmobile; and other small automotive companies. GM was always in the business of buying other companies to incorporate. It believed by bringing in companies with different attributes, then they would be able to reach a broader market. GM began to get into the defense contracting market during World War I. GM had purchased 30 automotive companies by 1920. 3

History of GM In 1923, GM began its dominance over the automotive world by becoming the leading producer of automobiles. During this era, GM began a decentralized management concept which saved the company from financial ruin. The decentralized management enabled the smaller division tailor their product to each segment of the market which they were targeting. The 1950’s proved to be the hay day for GM where it was able to capture 44% of the market. 4

History of GM In the 1970’s, the company was able to respond to the need for more gas efficient automobiles. In the 1980’s, GM began to acquire businesses which were outside the realm of automobile manufacturing companies. The 1990’s required a more conservative strategy for a declining market. 5

Automotive Divisions: High End 6

Automotive Divisions: Low End 7

Automotive Divisions: Overseas 8

GM Companies: Parts Genuine Gm Parts ACDelco GM Performance Parts GM Accessories GM Fleet Alternative fuels GM Supplier Discount GM XM Satellite Radio Onstar 9

GM Companies: Services GMAC Financial Services GM Cardmember services. Supply Power Commercial Finance GM Business Card 10

GM Network Companies in which GM is a majority stock holder 11

GM Components Automotive Parts Manufacturing Engine Division Transmission Division 12

New Offerings 13

Philanthropic Endeavors Hummer and the Red Cross start a partnership GM Global. Aid teams with CARE and UNICEF to start a disaster relief fund GM is also a major corporate sponsor of the of MLK Jr. Memorial GM started Volunteer Plus which gives $250 per hour for employee involvement with charities GM is a corporate sponsor of Make-a. Wish foundation. GM also donates to America’s Promise 14

GM 2004 Financial Highlights § Record consolidated net sales and revenues § Record net income at GMAC § Record net income and market shares at GMAP § Profitability at GMLAAM § Increase of GME losses § $5. 2 Billion health care cost 15

GM Consolidated Sales & Revenues 2000 - Est. 2006 Net sales & Revenues as of December, 31 2004 were $193. 5 billion, up 4. 1% from December 2003 2005 sales Q 1, 2, 3 = $141. 468 B GM expected annual sales & revenues as of December 31, 2005 are $184. 8 B GM 2006 Expected Sales growth rate is 5% Continue on the next slide 16

GM Consolidated Sales & Revenues 2000 - Est. 2006 The decrease in 2001 was due primarily to pricing pressures and a decrease in wholesales volume in North America and Europe, largely to the currency devaluation in Argentina and pricing pressures throughout the GM’s Latin America, Africa, and Mid-East regions. The increased in 2002 is due to increased in market share in three of GM’s four regions around the world, favorable product mix and cost reduction. Also, GM had record sales for of SUV’s and trucks. In 2003, the increase is also due to increased in market share in three of GM’s four regions, favorable product mix and a weaker of the dollar in US. The continue growth at GM Asia-Pacific and the higher wholesale volume at GM Latin America/Africa/Mid-East and GM Europe were the factors to increase the net sales and revenues in 2004. In 2005, the expected decrease in sales and revenues is due to 17 higher row material prices and strong competition in US.

GM Global Sales Production GM total unit sales production keep growing, mainly due to the growth of Latin and Asian markets. GMNA car division sales production is jeopardized by the market share growth of Japanese automakers. 18

GM Profit GM's 2004 profits have been crushed by excess capacity, high union wages, and massive employee-retirement obligations. GM tries to restructure as high raw-materials costs and weak demand for high-margin sport utility vehicles crushes profits by 36% 19

GM ROE and ROA GM ability to manage investor money and assets has been inconsistent and inefficient. 20

GM Operating Margin & Net Operating Margin GM ability to generate more profit per dollars of sales has steadily decline over the last 2 years Toyota Motor Corp. (One of the main competitor) has reported an increase of 10. 51% for its Operating Margin and 14. 29% for its Net Operating Margin 21

GM Regional Results GMAP vehicle sales increase more than 14% market share increased by 0. 7% to 9. 3%. The expected 2006 Asia & Pacific industry vehicle growth rate is 7%. GMLAAM vehicle unit sales up 26%; market share increased by 1. 1% to 17. 4%. The expected 2006 LAAM market growth rate is 15%. GME increased its market share by 0. 2% to 9. 5%; A continued weak price and US$/EUR rate forced GME to report a loss of $976 Million. The industry vehicle is expected to grow by 5% in year 2006. GMNA net Income totaled 1. 6 Billion; market share declined by 0. 8% to 27. 2%. The unit sales of cars decreased by 0. 8% while the truck’s sales unit increased by 1%. (Truck’s sale represents 60% of GM’s total U. S. vehicle unit sales) 22

News: Health Care Cost Health care cost in the United States average 15% of gross domestic product GM spends 5 Billion on health care cost for 1. 1 million employee, retirees and independents throughout the United states. Those costs amounted to about $1500 for each vehicles manufactured in the United States. GM competitors governments cover a large portion of employee and retiree health-care cost. 23

Strengths World’s number one carmaker GM has 325, 000 employees around the world. Manufacturing plants in 32 countries. Sells in 200 countries. Strong brands. In 2004, nearly 9 million Autos sold, up 4%, 2 nd highest total in GM’s history. Profitable Markets are the Asia-Pacific and Latin America/Africa/Mid-East regions. 24

Strengths (Continued) Significant Progress to reduce cost since 2000. Developing partnerships around the world. New products such as Hummer H 3 and Chevy HHR GM has a good product offering in China, with a small, cheap and fuel-economy cars, minivans and pick-up trucks. 25

Weaknesses Market share is down to 14. 4 globally. Capacity Utilization. – Too many plants and workers in North America. – 111, 000 employees and contracts that forbid permanent layoffs. Rebates and Sales Incentives in order to keep the plants running. Health care burden. Third Quarter Losses are $1. 6 Billion compared to 26 $88 million one year ago.

Weaknesses (Continued) Unprofitable Markets include the North America and Europe. GM does not have a hybrid vehicle on the US market. 27

Summary GM is the world’s number one carmaker. GM has been profitable in the Asia-Pacific/Latin America/Africa/Mid-East regions, while unprofitable in North America and Europe. China is the biggest GM’s center of auto profit. GM’s largest market is US, and second largest market is China. Health care cost is equal to $5 Billion. 28

Summary (Continued) Lately, GM has been offering rebates and sales incentives, in order to keep manufacturing plants in operation in US. GM has committed to achieve 100% of capacity utilization by 2008. 29

References GM – Company from: http: //www. gm. com/company/corp_info/ GM – Company Profiles from: http: //www. gm. com/company/corp_info/profiles/ Business Week Article: http: //www. businessweek. com/bwdaily/dnflash/oct 2005/nf 20051017_7171_d b 035. htm BBC Article: http: //news. bbc. co. uk/1/hi/business/1101500. stm http: //media. gm. com/servlet/Gateway. Servlet? target=http: //image. emerald. g m. com/gmnews/viewmonthlyreleasedetail. do? domain=74&docid=19344 GM – Letter to Stockholders 2001 from: http: //www. gm. com/company/investor_information/docs/fin_data/gm 01 ar/do wnload/ltr 01 ar. pdf GM – Letter to Stockholders 2002 from: http: //www. gm. com/company/investor_information/docs/fin_data/gm 02 ar/do wnload/gm 02 arletters. pdf GM – Letter to Stockholders 2003 from: http: //www. gm. com/company/investor_information/docs/fin_data/gm 03 ar/do wnload/gm 03 arletters. pdf GM – Letter to Stockholders 2004 from: http: //www. gm. com/company/investor_information/docs/fin_data/gm 04 ar/do wnload/gm 04 arletter. pdf 30

References (Continued) GM – Financials 2001 from: http: //www. gm. com/company/investor_information/docs/fin_data/gm 01 ar/do wnload/fin 01 ar. pdf GM – Financials 2002 from: http: //www. gm. com/company/investor_information/docs/fin_data/gm 02 ar/do wnload/gm 02 arfinancials. pdf GM – Financials 2003 from: http: //www. gm. com/company/investor_information/docs/fin_data/gm 03 ar/do wnload/gm 03 arfinancials. pdf GM – Financials 2004 from: http: //www. gm. com/company/investor_information/docs/fin_data/gm 04 ar/do wnload/gm 04 arfinancials. pdf General Motors Corporation 2001 -2004 Annual Report: http: //www. gm. com/company/investor_information/stockholder_info/ GM – GM and UAW reach tentative agreement on health care: http: //media. gm. com/servlet/Gateway. Servlet? target=http: //image. emerald. g m. com/gmnews/viewmonthlyreleasedetail. do? domain=74&docid=19615 Article by Keith Bradsher - NYTimes. com – G. M. Thrives in China With Small, Thrifty Vans (August 9, 2005). Article by Danny Hakim – NYTimes. com – G. M. and Ford Lose Ground in Sales Again (March 2, 2005). Article by Matthew L. Wald – NYTimes. com - Hybrid Cars Burning Gas in the 31 Drive for Power (July 17, 2005).

Appendix A: Chart Data 32

Appendix A: Chart Data (Continued) 33