GM Changing Development System of Platforms from Regional
to Global for Higher Efficiency
Global sales reach 9.1 million vehicles in 2006,
with non-North American sales achieving the best results ever

  In 2006, GM's North American sales dropped sharply below the 5 million mark to 4.81 million while more than 4 million were sold in the rest of the world, the best result ever, to maintain a high level of sales at 9.1 million globally. The carmaker states that it reached a retail sales target of 3 million for the USA, not including fleet sales which the company has been trying to scale down.

  The carmaker announced that the restructuring plan for its North American business-disclosed in November 2005-was proceeding on schedule and that 6.8 billion dollars of the structural cost had been reduced in 2006 (the planned amount was 6 billion dollars). Looking ahead, the company says that it will be able to increase its profit in 2007 due to lower structural costs, increased North American sales from new full-size SUV/pickup models and medium-size crossover models launched in 2006, and continued expansion of sales in the regions other than North America.

  The carmaker has completed the development of three global platforms: rear wheel drive platform, Epsilon 2 platform and Gamma platform, with models based on them starting their production in 2006, 2008, and 2009, respectively. The carmaker's traditional development system with several regional development centers has been dropped in favor of a new system centering around the three platforms, in which a designated development center for, for instance, Gamma platform, one of the global three platforms, develops a variety of models based on the platform for all the markets of the world. The new development system will smooth the way for expanded production in many parts of the world including emerging markets such as BRICs.

  The model lineup for North America will be reinvigorated with the introduction of LCV models centering around crossover models based on newly-developed Lambda platform, as well as the infusion of global platform-based models (the production of medium-sized SUV models and current minivan models will be terminated due to poor sales).

Note: According to GM's restructuring plan for North American business announced in November 2005, nine manufacturing plants (five vehicle plants and four part plants) will be closed down by 2008 to reduce the annual production capacity by 1 million to 4.2 million.

■6.8 billion dollars of the structural cost was cut for North American automotive business in 2006

  In 2006, GM achieved the best ever sales of 206.5 billion dollars and net profit of 2.2 billion dollars (as opposed to 3.2 billion dollar loss for 2005) which does not include special allowances such as restructuring charges.

  Business for North America improved to a loss of 800 million dollars in 2006, which does not include special allowances. But when the special allowances are taken into account, the loss increases to 4.6 billion dollars (the result for 2005 was a loss of 5.8 billion dollars, without special allowances, but it deteriorates to a loss of 8.2 billion dollars, with special allowances).

  Although the carmaker faces many challenges, it is on schedule with the restructuring plan announced in November 2005 by tackling them head on, such as reducing the North American automotive business's structural cost by 6.8 billion dollars (as opposed to the planned 6 billion dollars) compared with 2005, and is on track to meet its goal of cutting 9 billion dollars in the cost in 2007 (the carmaker plans to reduce the ratio of structural cost to consolidated sales from 34% in 2005, to 30% in 2006, and 25% in 2010).

  Looking ahead, the company says that it will be able to increase its profit in 2007 due to lower structural cost, increased North American sales from new full-size SUV/pickup models and medium-size crossover models launched in 2006, and continued expansion of sales in the regions other than North America.

■GM's net sales and revenues and net income adjusted by region and business

(in millions of dollars)

		2000	2001	2002	2003	2004	2005	2006
Net sales and Revenues	North America	112,723	106,938	115,809	116,310	114,582	105,640	109,779
	Europe	25,358	23,700	23,912	27,478	30,820	31,892	33,193
	South America/ Africa/Middle East	5,713	5,864	5,110	5,387	8,792	11,844	14,618
	Asia Pacific	3,606	4,201	4,524	5,338	6,978	10,743	15,499
	Total Auto	160,627	140,703	149,355	154,513	161,172	160,150	172,927
	Other		10,788	895	1,318	373
	Financing	24,005	25,878	27,074	30,006	31,907	34,427	33,550
	Total company	184,632	177,260	177,324	185,837	193,452	194,577	206,477
Net income adjusted	North America	3,174	1,478	3,108	1,156	1,173	(5,807)	(779)
	Europe	(676)	(767)	(549)	(286)	(742)	(187)	227
	South America/ Africa/Middle East	26	(80)	(181)	(331)	85	152	533
	Asia Pacific	(233)	77	188	577	729	557	441
	Total Auto	2,839	708	2,566	1,116	1,245	(5,900)	418
	Other		(967)	(524)	(746)	(509)
	Financing	1,613	1,734	1,882	2,827	2,894	2,695	1,781
	Total company	4,452	1,475	3,456	2,681	3,526	(3,205)	2,199

Source: GM Annual Reports, 2006 CY and Fourth Quarter Results
Note:	GM sold a 51% stake in GMAC, sales finance subsidiary, at the end of November 2006. The subsidiary was fully consolidated during January-November 2006 period but was treated as an equity method affiliate for the last month of the year. The sale of its stake in the finance company as well as its dividends will yield the carmaker a total of 14 billion dollars for the next three years.

■In 2006, sales dropped below the 5 million mark in North America but expanded to over 4 million in the rest of the world

  GM's 2006 global production and sales reached 9.18 million and 9.10 million, respectively. The 2005 figures were 9.05 million and 9.18 million, respectively. The 2006 global sales follows the examples of 1978 and 2005 in exceeding the 9 million mark.

  Sales for 2006 dropped below the 5 million mark to 4.81 million in North America but expanded over the 4 million mark to 4.29 million in the rest of the world: 1.04 million in Central and South America and the Middle East and Africa, 1.25 million in Asia and Oceania, and 2 million in Europe, the best ever result for each region. In January-March 2007, strong non-North American sales, which grew 10% year-on-year, pushed the carmaker's global sales up to 2.26 million, the highest quarterly result (the 2006 figure was 2.19 million).

  GM says that it intends to maintain its market share in North America while it aims to expand sales in more profitable emerging markets.

■Sales in the USA: Scaling down incentives and fleet sales. Achieved retail sales target of 3 million

  GM sold 4.13 million in the USA in 2006, a sharp drop from 2005's 4.52 million, but achieved a retails sales target of 3 million, which does not include fleet sales.

  In order to build a structure that allows sales in the USA to be profitable for the long term, the carmaker intends to scale down daily rental fleet sales and incentives (to compensate for smaller incentives, suggested retail prices were reduced for 2006 models), and to increase its cars' residual value to the level of Japanese brand cars in the USA.

■GM's sales policy for the USA: Scaling down incentives and daily rental sales and building an earnings structure for the long term

In 2006, GM reduced fleet sales to daily rental companies (decrease of roughly 75,000 from 2005 level )and incentives (decrease of 700 dollars a car from 2005 level) but cleared a retail sales target of 3 million excluding fleet sales in the USA.   The carmaker intends to continue a high level of retail sales for 2007 as well and at the same time to push up the transaction prices and residual values of its cars, laying the groundwork for continuous profitability.

In the first quarter of 2007, the carmaker sold 909,000 in the USA, a drop of 54,000 from the corresponding period of last year, but its retail sales grew 0.5% on a year-on-year basis, with fleet sales to daily rental companies showing a drop of 60,000 from the first quarter of 2006.

Residual value is an important indicator of brand's strength. The residual value of a 36-month-old car, measured in mid-2006, is over 50% of the new car for Toyota, Honda and BMW but 40-45% for GM, for which one of the important goals is to bring the value up to the same level of Japanese brand cars.

Source: GM's press release on 2007.1.17, Automotive News 2006.11.20/2007.1.7/2007.2.5

  As part of its move in this direction, GM introduced 5 year/100,000 mile warranty to the powertrain of all light vehicles sold in the USA and Canada beginning with 2007 models.

  There will be a greater integration of Pontiac/Buick/GMC dealerships as a measure to keep them profitable in the face of declining sales. Cadillac/Hummer/Saab dealers will also be integrated but more slowly.

■Powertrain warranty to be expanded to 5 year/100,000 mile with 2007 models

GM began 5 year/100,000 mile powertrain warranty on all light vehicles to be sold in the USA and Canada beginning with 2007 models (3 year/36,000 mile warranty on 2006 models). The carmaker says that the new warranty will bring added confidence in combination with OnStar and StabiliTrak (the carmaker's name for Stability Control).

The new warranty was introduced as part of the carmaker's new marketing strategy to impress upon customers that its cars' quality is actually higher than generally thought (the carmaker's warranty cost is said to have decreased 40% during the past five years) and to contribute to increased residual value of its cars.

Source: GM's press release on 2006.9.6, Automotive News 2006.9.11/2006.11.6
Note:	3 year/36,000 mile powertrain warranty is common with GM's models sold in North America although there is some variance between the brands. Beginning with 2007 models, Ford extended its warranty to 5 year/60,000 mile for Ford/Mercury brand models and 6 year/70,000 mile for Lincoln brand models.

■70% of Pontiac/Buick/GMC brand car sales was made by integrated dealerships

GM is reorganizing its sales channels to make the dealerships more profitable: Chevrolet and Saturn will continue as an independent channel while Pontiac/Buick/GMC will be integrated mainly in big cities through dealers handling the thee brands under one roof. 70% of the Pontiac/Buick/GMC brand car sales were made by those dealers in 2006 and the proportion is expected to reach 80% in 2008.

As for the product lineup, the carmaker no longer has to make a distinction in outside appearance when developing models based on the same platform for the three brands because they are handled by the integrated dealerships. According to the carmaker, GMC will mainly handle pickups and full-size SUVs, Pontiac affordable high-performance cars (such as Solstice roadster), and Buick premium cars

■Taking time to integrate Cadillac/Hummer/Saab dealerships

GM organized the first joint dealer meeting between the three premium brands of Cadillac/Hummer/Saab in 2007. The carmaker is said to be looking for integration of the three brands although it is in no hurry to do so, unlike Pontiac/Buick/GMC integration.

Source: GM's press release on 2005.11.21, Automotive News 2006.10.30/2007.2.12/2007.4.9

■Three global platforms will be installed in new models by 2009

  GM developed Epsilon platform-a platform for medium-size cars such as the Opel Vectra launched in 2002-as a global platform (platform is called architecture by the carmaker), which did not bring the carmaker expected benefits in commonizing components due to lack of control over its regional development centers.

  GM has built three global platforms, which will be installed in a series of models to come: a car based on rear wheel drive platform was launched in 2006; models based on Epsilon 2 platform will come out in 2008; and Gamma platform for small cars will be used in models to be rolled out in 2009. These models will be produced in many parts of the world including emerging markets, turning the carmaker's development and procurement into global system.

■Developing global platforms. Each global platform development center to be responsible for developing models destined for many parts of the world

Rear wheel drive platform, put into a new model in 2006, and Epsilon 2 platform, installed in new models to be launched in 2008, are both global platforms and will parent a variety of other new models in the years to come. The carmaker has dropped its traditional region-based development system and will adopt a new system, in which a designated development center for a global platform will develop models destined for many parts of the world.   For instance, a model which will be marketed in North America, if it uses the Epsilon 2 platform, will be developed by Europe-based Opel, which is globally responsible for the platform. The model's styling and powertrain will be developed mainly by a team based where it is to be marketed.

Suppliers are required to be able to supply their components globally to North America, Europe, Central and South America, and Asia and Oceania. Tier 1 suppliers will be drastically reduced as the carmaker proceeds with global sourcing. It reduced the number of Tier 1 suppliers from 3,700 to 3,200 during the 12 months in 2005-2006, aiming to further narrow them down to roughly 500 in the future.

Source: GM's press release on 2007.1.11, Automotive News 2006.6.26/2006.11.13/2007.2.19

  Epsilon 2 platform will be developed by Opel and the platform-based models will be produced in North America, Europe, Asia and Oceania, Central and South America from 2008. The annual production will be one million at its peak and a saving of up to one billion dollars is expected-compared with the traditional development method--during the lifecycle of the platform lasting between five and seven years.

  Gamma platform will be developed by Korea's GM-Daewoo and the platform-based cars will be produced in Korea, China, Thailand, Germany, India, Mexico and Venezuela on a large scale from 2010. Up to 1.4 million will be produced a year. The platform is also expected to have a minicar with the shorter wheelbase, and a model with the longer wheelbase to compete with the Renault Logan.

  Rear wheel drive platform has been developed by Australia's Holden. Up to 700,000 based on the platform will be produced a year. China is one of the markets which will produce a car with the longer wheelbase based on the platform from 2007.

■Models based on Epsilon 2/Gamma/rear wheel drive platforms will be produced globally
■Global production of one million is planned for models based on Epsilon 2 platform

Epsilon 2 platform will be developed by Opel's design center based in Ruesselsheim, Germany and be used in the Opel Vectra, Chevrolet Malibu, Pontiac G6, Saab 9-3, and Cadillac BLS from 2008. The models will be produced in the four regions of North America, Europe, Asia and Oceania, and Central and South America, for a maximum production of one million a year.

GM plans to cut the number of prototypes by 40%, material cost by 20% and engineering cost by 25% through the use of Epsilon 2 platform, which is expected to make a saving of up to one billion dollars or 25% of the total development cost during the 5-7-year-long life cycle.

■Global production of 1.4 million is planned for models based on Gamma platform for small cars

Gamma is a platform for small cars and minicars and will be mainly developed by Korea's GM Daewoo Auto & Technology. They will have petrol and diesel engines of 1200-1800 cc.   GM is expected to invest 3.2 billion dollars in GM-Daewoo between 2005 and 2008 or 2009 to develop Gamma platform, new models such as the Chevrolet Captiva SUV/Chevrolet Aveo, and diesel engines.

Gamma platform-based models will begin production in 2009, ramping up to full production in 2010. They will be produced in Korea, China, Thailand, India, Germany, Mexico, Venezuela, and Eastern Europe, up to a level of 1.4 million a year.

A shorter wheelbase version of the platform will be developed for use in a minicar model, one notch below the Opel Corsa. The minicar will be produced in Korea, India, Poland and China up to 300,000 a year.

The carmaker announced in April 2007 that it will produce a minicar model, 1000cc version of the current Chevrolet Spark, at Gujarat, India. This means that a minicar based on the shorter wheelbase version of Gamma will be an addition in India, which will be produced at the carmaker's new second plant in the country in 2009.

800cc and 1000cc versions of the current Spark are produced by SAIC-GM-Wuling in China, which will also produce its successor based on the shorter wheelbase version of Gamma. FSO will produce Opel brand minicar using the platform in Poland.

■Global production of 500,000-700,000 is planned for rear wheel drive platform

Rear wheel drive platform was developed by Australia's Holden. It is of flexible structure which allows 110-inch-wheelbase (about 280cm) to be extended to 120 inches (about 305cm), making it possible for medium-size and full-size passenger cars to use the platform.

In 2006, Holden began to produce the new Commodore using rear wheel drive platform, and plans to export the model to Brazil, the Middle East and the United Kingdom. The Australian carmaker will export the Pontiac G8 to the USA as 2008 model (GM says that it may consider producing the model in the USA). The Chevrolet Camaro 2009 model will also use rear wheel drive platform and will be produced at Oshawa, Canada.

Models based on rear wheel drive platform will be marketed in Asia, Australia, Europe, the Middle East, North America, and South America. Their number will increase over time to achieve global sales of 500,000-700,000 a year. A Buick brand model with the longer wheelbase version of the platform will be produced in China in 2007. GM says that the global platform allows it to make a saving of 500-1,000 dollars a car in the development cost compared with the traditional way in which models were developed at the regional development centers.

GM says that it will review the USA government's final decision on tougher CAFE standards as they will impact rear wheel drive models more heavily than front wheel drive models due to their greater size and weight (there has been no announcement of changes in the carmaker's product plan so far).

Source: Automotive News 2006.6.26/2006.7.10/2006.8.14/2006.11.13/2007.2.19/2007.3.19/2007.4.16
Note:	Other than Epsilon 2/Gamma/rear wheel drive platforms, GM has the following platforms: GMT900 for full-size trucks, Lambda for medium-size crossover cars, Delta for compact cars, Sigma for rear wheel drive luxury cars, and Theta for compact crossover cars.

■Product plan for North America: models based on global platforms will be released actively to renew the product lineup

  GM renewed a full-size SUV model and pickup model-marketed only in the USA-using GMT900 platform, and launched them in early 2006 and in the second half of the year, respectively. The GMC Acadia, Saturn Outlook, and Buick Enclave, all medium-size crossover models, were also released in the second half of 2006 and in early 2007.

  To keep up the momentum, newly-developed global platforms will be leveraged to put a series of new models on the market from 2007 onwards: front wheel drive passenger car based on Epsilon 2 platform and medium-size passenger car based on rear wheel drive platform will be launched between 2008 and 2010 model years.

  Small cars based on Gamma platform and others will be launched from 2009: a new small crossover model and a sister model of the successor to the Opel Corsa will be launched in North America.

  A new concept crossover (minivan) will make its appearance as 2009 model and be marketed through Chevrolet and GMC. The current minivans (such as the Chevrolet Uplander) and medium-size SUV models (such as the Chevrolet TrailBlazer) will be ceased to be produced because of their poor sales.

  Models will be integrated between North America's Saturn and Europe's Opel brands: the Opel Astra succeeded the Saturn Ion as 2007 model, and the successor to the Opel Vectra wagon will be launched as the Saturn Aura wagon in 2008 model year (both models imported from Europe).

■GM: Product launching plan for North America
■Passenger car

	Models	Model Year	Description
Rwd platform	Buick Lucerne	2010MY	Based on rear wheel drive platform and remodeled.
	Chevrolet Impala
	Pontiac G8	2008MY	Based on rear wheel drive platform. To be imported from Australia initially, with North American production as a future option.
	Pontiac Grand Prix		To be succeeded by the G8. The current model's production will be terminated.
	Cadillac DTS	2011MY	Considering restyling based on rear wheel drive platform (the current model is the only one with front wheel drive in the Cadillac lineup).
Sigma platform	Cadillac CTS	2008MY	To be restyled based on Sigma platform.
	Cadillac STS	2010MY
Epsilon/ Epsilon 2 platform	Buick LaCrosse	2010MY	To be restyled based on Epsilon 2 platform.
	Pontiac G6
	Saturn Aura Wagon	2009MY	Sister model of Epsilon 2-based successor to the Opel Vectra Wagon.
	Chevrolet Malibu	2008MY	The current model is based on Epsilon platform. Will be larger in size.
	Saturn Aura	2007MY	The current model is based on Epsilon platform.
Small Passenger Car	Chevrolet Aveo	2008MY	Developed and produced by Korea's GM-Daewoo
	Pontiac G5 coupe	2007MY	Entry-level coupe based on Delta platform
	Saturn Ion		Production terminated in March 2006 (to be succeeded by the Astra)
	Saturn Astra	2008MY	Sister model of the Opel Astra. To be released at the end of 2007 (produced in Belgium).
	Saturn Corsa	2012-	Gamma-based successor to the Opel Corsa. To be marketed in North America. Production will likely be in Mexico.
Specialty	Chevrolet Camaro	2009MY	New coupe based on rear wheel drive platform (to be produced in North America)
	Chevrolet Monte Carlo		Production will terminate after 2008 model.
	Pontiac GTO		Production terminated after 2006 model.
	Saturn Sky	2007MY	Rear wheel drive roadster, which is a new model
	Cadillac XLR	2011MY	To be restyled

■Light Truck

	Models	Model Year	Description
Full-sized SUV	Chevrolet Tahoe	2007MY	New models released in early 2006 (based on GMT900 platform)
	Chevrolet Suburban
	GMC Yukon
	Cadillac Escalade
	Hummer H2	2010MY	Based on GMT900 platform for full-size SUV models
Full sized Pickup	Chevrolet Silverado	2007MY	New models released in the latter half of 2006 (based on GMT900 platform)
	Chevrolet Avalanche
	GMC Sierra
Middle SUV	Buick Rainer		Production will terminate after 2007 model.
	Chevrolet Trail Blazer		Production will terminate but the model will be succeeded by a crossover based on Lambda platform
	GMC Envoy
Middle Crossover	GMC Acadia	2007MY	New models based on Lambda platform
	Saturn Outlook
	Buick Enclave	2008MY
	Buick Rendezvous		Production will terminate after 2007 model
	Chevrolet Equinox	2010MY	Based on Theta platform
	Saturn Vue	2008MY
Small Crossover	GMC brand vehicle (in North America)	2010-	Gamma-based model to be produced in a low-cost country for sale in North Amercia, Europe and emerging markets. The model will be smaller than the current Chevrolet Equinox and Saturn Vue, both based on Theta platform.
	Cadillac BRX		To be released between 2009 and 2011 model years
Minivan	Chevrolet minivan	2009MY	New concept minivan based on Lambda platform, with SUV-like styling and roomy interior
	GMC Sorrano
	Chevrolet Uplander		Production will terminate after 2008 model. The four models will be taken over by Lambda-based models. The current models are based on GMT210 platform for derivatives of commercial vehicle. Doraville plant in Georgia, which produces the models, will close down in 2008.
	Pontiac Montana SV6
	Buick Terraza
	Saturn Relay

Source: Automotive News 2006.8.21/2006.12.18/2007.2.12/2007.2.19/2007.3.12, and other
Note 1:	New models and restyled models of the six brands, which are mainly produced in North America, are shown. Segmentation is according to Ward's Automotive Yearbook.
Note 2:	GM displayed three concept minicar models, which are smaller than the Chevrolet Aveo, the smallest car sold in the USA, at New York International Auto Show in March 2007. The minicars represent potential styling of the models which are going to be produced at GM-Daewoo. GM is looking at an option of selling them in the USA.

■GM's global production will expand to 10.3 million in 2012 (forecast by CSM Worldwide)

  According to CSM Worldwide, the production of light vehicles whose design parent is GM will increase from 8.84 million in 2006 to 9.53 million (including other carmakers' brands) in 2012. When vehicles whose design parents are non-GM carmakers but which are marketed under GM brand are included, the combined total will increase from 9.12 million in 2006 to 10.34 million in 2012.

  In North America, production in the USA will decrease from 3.03 million in 2006 to 2.83 million in 2008 but will expand to 3.20 million in 2011: Mexican production will go up from 500,000 in 2006 to 750,000 in 2012; production in Canada will be scaled down from slightly less than one million to some 700,000 during the timeframe.

  Production in emerging markets will expand between 2006 and 2012: Brazil from 490,000 to 640,000, China from 460,000 to 640,000, India from 20,000 to 220,000, Poland from 160,000 to 460,000, Russia from 20,000 to 180,000.

■Production of GM brand light vehicles whose design parents are not GM (forecast by CSM Worldwide)

(units)

Design Parent	Manufacturer	Country	2006	2007	2008	2009	2010	2011	2012
Fiat	Heuliez	France					22,313	35,323	23,948
	GM	Germany	49,472	173,655	169,200	161,935	165,072	160,377	137,235
		S.Africa			5,110	37,284	44,632	52,106	47,109
		Spain	80,719	291,019	294,030	319,232	507,733	491,923	445,102
	AT AvtoZAZ	Ukraine		49	420	463	602	587	520
	Total		130,191	464,723	468,760	518,914	740,352	740,316	653,914
Fuji Heavy Industries		Japan	926	141
Isuzu	GM	India	22,614	20,803	18,801	16,954
Suzuki	GM	Argentina	8,399	6,544	5,012
	Colmotores	Colombia	2,802	2,820	2,948	2,868	3,109	3,072	3,275
	Omnibus	Ecuador	9,436	9,912	10,195	10,550	10,797	11,222	11,418
	Suzuki	Hungary		453	74,870	80,187	79,199	78,175	73,646
		Japan	1,792	2,310	581
	GM	Poland	28,939	13,025
		S.Korea	17,396	15,496	11,475	10,577	9,163	8,864	8,566
		Venezuela	8,391	10,415	10,833	12,053	12,884	14,339	15,447
	Total		77,155	60,975	115,914	116,235	115,152	115,672	112,352
Toyota	NUMMI	U.S.	58,334	49,124	68,721	65,944	56,879	49,090	43,892
Grand Total			289,220	595,766	672,196	718,047	912,383	905,078	810,158

Source: CSM Worldwide "Light Vehicle Forecast (January, 2007)"
Note 1:	Light vehicle includes passenger cars and small commercial vehicles with gross vehicle weight of less than 3.5 tons. 2006 figures are estimates and have been provided by CSM Worldwide.
Note 2:	Australia's 2006 production includes 8,112 of the Pontiac brand. Poland's FSO's 2006 production is for Daewoo brand. (GM) in "brand" column indicates that more than two brands of Buick, Cadillac, Chevrolet, Pontiac, Saturn, GMC, and Hummer are involved.
Note 3:	All rights reserved. No part of the tables may be used or reproduced in any manner whatsoever without written permission from CSM Worldwide.

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