Once world’s largest automaker, GM retreats overseas as other companies take the lead

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Thread: Once world’s largest automaker, GM retreats overseas as other companies take the lead

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    Once world’s largest automaker, GM retreats overseas as other companies take the lead

    Once world’s largest automaker, GM retreats overseas as other companies take the lead
    MON, DEC 16
    Paul A. Eisenstein
    CNBC

    - At its peak in 2016, the Detroit automaker’s global volume hit a record 10.01 million, declining to 8.38 million just two years later.
    - Since taking the helm 6 years ago, CEO Mary Barra has followed a strategy that might be referred to as one of strategic retrenchment.
    - The company’s abandoned a number of once-critical markets, including Western Europe, India and, most recently, Russia.

    Long the world’s largest automaker, General Motors has watched an assortment of key competitors push past it in the global sales race this past decade and may soon find itself slipping into the No. 5 spot behind the likes of Volkswagen, Toyota and the company that will be created by the soon-to-merge Fiat Chrysler and PSA.

    While the Detroit giant initially put up a fight to hang onto its global sales crown, GM has now abandoned its longtime strategy of growth, almost no matter what the cost. Since taking the helm about six years ago, CEO Mary Barra has followed a strategy that might be referred to as one of strategic retrenchment, abandoning a number of once-critical markets, including Western Europe, India and, most recently, Russia.

    “They’re in retreat, peeling off the places where they don’t think they can make money for the foreseeable future,” said Joe Phillippi, founder and senior analyst at AutoTrends Consulting.

    General Motors lost its position as the world’s bestselling automaker in the run-up to its 2009 bankruptcy, the company emerging from Chapter 11 protection having abandoned four of its North American brands: Hummer, Pontiac, Saab and Saturn. It briefly regained the lead from Toyota when the 2011 tsunami led to major production cuts by all Japanese automakers. A year later, Toyota was back on top and, since then, GM has fallen further and further behind Volkswagen and the Renault-Nissan-Mitsubishi Alliance, as well.

    CONTINUE AT LINK ABOVE
    Last edited by nadepalma; 01-09-2020 at 02:59 PM. Reason: Reformatted, moved to Newsticker

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    Re: Once world’s largest automaker, GM retreats overseas as other companies take the

    With GM sales down a whopping 11.2% in Canada year to date - perhaps they should try a little harder here.

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    Re: Once world’s largest automaker, GM retreats overseas as other companies take the

    Gotta retreat in all these less than stellar markets so they can refocus on Zero-Zero-Zero.

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    Re: Once world’s largest automaker, GM retreats overseas as other companies take the

    The retreat is sad, particularly selling off Opel and Vauxhall. GM used to be a major player in Europe. They've let Holden wither and die. GM isn't the only company to cease manufacturing in Australia, but the products they've dumped on Holden are clearly not what those buyers want. Canada has been in freefall since the genius decision to drop the Pontiac brand.
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    Re: Once world’s largest automaker, GM retreats overseas as other companies take the

    Quote Originally Posted by 1958carnut View Post
    Gotta retreat in all these less than stellar markets so they can refocus on Zero-Zero-Zero.
    Zero markets. Zero revenue. Zero profit. Genius!

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    Re: Once world’s largest automaker, GM retreats overseas as other companies take the

    It's not about revenue, it's about profits. I think GM was smart to pull out of Europe and the other countries. if you listen to the European auto execs they see a reckoning coming with the forced conversion to BEVs before the public is ready for them. India-- No profits to be made there because of its bureaucracy. GM has tried and tried. No profit opportunity in Russia either. I'm saddened about Australia. GM made massive investments when the tax laws favored local manufacturing ... then they didn't. Hopefully they give it another try.

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    Re: Once world’s largest automaker, GM retreats overseas as other companies take the

    One detail, I think I read GM continues to sell in Russia but no longer manufactures there. For example:

    http://cadillacsociety.com/2019/12/0...ronezh-russia/
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    Re: Once world’s largest automaker, GM retreats overseas as other companies take the

    So where does sales without profit land GM other than in bankruptcy and bragging rights of having the most sold. Russia will be a basket case for years to come, especially with the world shifting away from oil and Russia's economy is totally unprepared for that. India is a basket case as well, it is not China and doesn't yet have a path to prosperity. Even Europe, the argument can be made that profits are possible, however, right or wrong GM has demonstrated over the past 20+ years that they can't turn it around. They did the right thing in leaving.

    Volume without profits is nothing but ego. It's the same as being the first one handing in your test but getting an F. Being first without results is worthless.

    Volume & profit needs to be looked at together. GM failed that comparison a long time ago, long before the bankruptcy - I think once they ceased to have the most profit and most volume they ceased to be the biggest.

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    Re: Once world’s largest automaker, GM retreats overseas as other companies take the

    Quote Originally Posted by dannyg View Post
    One detail, I think I read GM continues to sell in Russia but no longer manufactures there. For example:

    http://cadillacsociety.com/2019/12/0...ronezh-russia/
    I remember Opel was forced by GMHQ out of Russia after the build a new plant and Dealer network. Was an expensive experience for Opel. After that it was Australia IIRC.

    But it seems they are back to Russia. Opel press release from today:

    Monday 16-12-2019

    Rüsselsheim. Opel is back in Russia: The first models of the Rüsselsheim-based German carmaker have arrived in the showrooms of selected dealers in major Russian cities. As of today, customers in Russia can order the successful Opel Grandland X SUV from Eisenach and the Zafira Life.

    Groupe PSA started the regular production of the family van Zafira Life in its plant in Kaluga, some 200 kilometers southwest of Moscow. The Opel Vivaro transporter units for the local market will also roll off the production line in Kaluga as of early 2020.
    Source: https://int-media.opel.com/en/12-16-...tion-in-kaluga

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    Re: Once world’s largest automaker, GM retreats overseas as other companies take the

    I think profit is important, you can't keep losing money for decades. Of course I always ask why GM was so incompetent that they could not make money in Europe with Opel while others can?

    Of course you could also ask why GM can't make money selling small cars when Honda and Toyota can...

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    Re: Once world’s largest automaker, GM retreats overseas as other companies take the

    Quote Originally Posted by kool1 View Post
    I think profit is important, you can't keep losing money for decades. Of course I always ask why GM was so incompetent that they could not make money in Europe with Opel while others can?

    Of course you could also ask why GM can't make money selling small cars when Honda and Toyota can...
    Same reason that GM and Ford make money selling trucks and I bet Honda and Toyota don't - volume. GM and Ford built a reputation for bad quality small cars, and let Honda/Toyota build a great reputation in that arena. Now they have the volume and GM/Ford don't (really don't now that they are abandoning the market). Hard to make money with a low margin product selling in low volumes.

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    Re: Once world’s largest automaker, GM retreats overseas as other companies take the

    Quote Originally Posted by kool1 View Post
    I think profit is important, you can't keep losing money for decades. Of course I always ask why GM was so incompetent that they could not make money in Europe with Opel while others can?

    Of course you could also ask why GM can't make money selling small cars when Honda and Toyota can...
    I think a lot of it is GM NOT incorporating all the core products together and having Opel / Holden / GM NA / GMDAT each design OWN products with little relation to every other product

    P
    the Spark and Sonic and Cruze are NOT RELATED same with the Opel Adam / Corsa

    FORD had the fiesta / focus / ecosport all on one and Mondeo / Fusion where as close as they can be

    IMHO GM NEEDED a "one FORD" more than FORD needed "one ford"

    rime example Holden - did what it wanted and made a car MOSTLY Australia ONLY and GM NA goes and builds a competing car
    Most companies would have taken Zeta and "globalized" it for Buick / Caddy / Impala
    - GM has 3 1/2 RWD sedan chassis all doing ALMOST the same thing each a bespoke operation and needing FULL budgets instead of "chopping" zeta down to make a Alpha like chassis OR an Alpha XL for a Zeta replacement / Omega
    AND NONE of the "caddy" chassis are configured to do SUVs

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    Re: Once world’s largest automaker, GM retreats overseas as other companies take the

    Quote Originally Posted by BlackGTP View Post
    Same reason that GM and Ford make money selling trucks and I bet Honda and Toyota don't - volume. GM and Ford built a reputation for bad quality small cars, and let Honda/Toyota build a great reputation in that arena. Now they have the volume and GM/Ford don't (really don't now that they are abandoning the market). Hard to make money with a low margin product selling in low volumes.
    GM did sell big volumes of small cars in the past but they didn't invest or market them. Too obsessed with pick up trucks. GM blew it.

    Quote Originally Posted by richmond2000 View Post
    I think a lot of it is GM NOT incorporating all the core products together and having Opel / Holden / GM NA / GMDAT each design OWN products with little relation to every other product
    So many blown opportunities to scale small cars globally. GM could have had 2-3 good global small cars like Civic and Corolla.

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    Re: Once world’s largest automaker, GM retreats overseas as other companies take the

    Quote Originally Posted by kool1 View Post
    GM did sell big volumes of small cars in the past but they didn't invest or market them. Too obsessed with pick up trucks. GM blew it.



    So many blown opportunities to scale small cars globally. GM could have had 2-3 good global small cars like Civic and Corolla.
    They were selling big volumes, but how much of that volume was dependent upon big rebates and sales to car rentals - meaning profitless? They were obsessed with pickups because that's where the profit is.

    And with GM's cost structure, especially pre-bankruptcy, I suspect it was impossible to make a profit on a small vehicle in the USA with high cost union labor.

    However, all these problems were self inflicted over the long term. GM agreed to those labor contracts, ultimately leading them to be uncompetitive. And I also agree that GM should have scaled the small cars (actually, all vehicles) globally. The seeds of their failures were sown in their successes earlier on. GM's structure of each division acting as their own company led to success through the 60's, but worked against them as they entered the 70's. That same success allowed GM to award rich contracts to the union, but there was no way to take those rich contracts back once the competition became more fierce.

    But hindsight is 20-20.

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    Re: Once world’s largest automaker, GM retreats overseas as other companies take the

    Quote Originally Posted by kool1 View Post
    GM did sell big volumes of small cars in the past but they didn't invest or market them. Too obsessed with pick up trucks. GM blew it.



    So many blown opportunities to scale small cars globally. GM could have had 2-3 good global small cars like Civic and Corolla.
    Quote Originally Posted by BlackGTP View Post
    They were selling big volumes, but how much of that volume was dependent upon big rebates and sales to car rentals - meaning profitless? They were obsessed with pickups because that's where the profit is.

    And with GM's cost structure, especially pre-bankruptcy, I suspect it was impossible to make a profit on a small vehicle in the USA with high cost union labor.

    However, all these problems were self inflicted over the long term. GM agreed to those labor contracts, ultimately leading them to be uncompetitive. And I also agree that GM should have scaled the small cars (actually, all vehicles) globally. The seeds of their failures were sown in their successes earlier on. GM's structure of each division acting as their own company led to success through the 60's, but worked against them as they entered the 70's. That same success allowed GM to award rich contracts to the union, but there was no way to take those rich contracts back once the competition became more fierce.

    But hindsight is 20-20.
    I still think if the small cars were stellar products and GM had built a reputation like Honda and some others, the small car thing and the outrageously unprofitable BS wouldn't have been going on. Then again GM needs more innovative or outside the box thinking too which IMO would help in this.

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