GM: 2014 strategic plan announced in midst of managing recalls

Over 30 million vehicles recalled; sales target of 5 million units in China; focus on Cadillac

2014/11/12

Summary

GM Sales Forecast In 2014, General Motors (GM) was supposed to place an attack with its enhanced product lineups. However, there were recall issues with the ignition switches in February and thus, 2014 became the year where the automaker had to deal with recalls. Up to October, the cumulative total of recall cases was 75 and the number of vehicles that were subject to the recalls exceeded 30 million units. The Department of Justice (DOJ), Federal Bureau of Investigation (FBI), Securities and Exchange Commission (SEC), attorney generals in 48 states, and Canadian safety regulators are investigating the ignition switch recalls.

 From January 15, 2014, GM's top management has changed from Chief Executive Officer (CEO) Akerson to CEO Barra, who became the auto industry's first female CEO. As soon as she was appointed as CEO, CEO Barra was summoned and severely condemned by Congress on the handling of the recalls. CEO Barra had a difficult start; however, she has been consistently handling the recalls thus far.

 On October 1, CEO Barra announced the first strategic plan that was created by the new management team. She stated that GM will promote five business strategies that are customer-focused to become the most valued automotive company. The first of the five strategies is to lead product and technology development. In 2015, GM expects the percentage of global sales from new or refreshed vehicles within 18 months to be approximately 27%. The automaker aims to increase the percentage  to 38% in 2016 and 2017, and to 47% in 2019.


% of Global New/Refreshed vehicle


 GM's sales volume, including vehicle sales of SAIC-GM-Wuling Automobile (SGMW) in China, for the January to September 2014 period increased by 1.7% year-over-year (y/y) at 7.372 million units and the global market share decreased by 0.1% to 11.5%. GM's global sales volume (including vehicles from its affiliated company in China, SGMW) in 2013 was 9.72 million units with an increase of 4.5% y/y; however, it did not reach Toyota's 9.98 million units and Volkswagen's 9.728 million units and thus, it was ranked third. GM's global share in 2013 was 11.5%, which was the same as the previous year.

 GM's sales for the January to September 2014 period increased by 1.2% y/y; however, the automaker's net profit decreased by 54.4% y/y to USD 1.96 billion due to the recall issues and stagnation of emerging markets. Sales in 2013 increased by 2.1% y/y and net profit decreased by 13.6% to USD 5.35 billion.


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