In global pullback, GM moves because it has to

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Thread: In global pullback, GM moves because it has to

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    In global pullback, GM moves because it has to

    http://www.detroitnews.com/story/bus...ves/101859932/

    Whoever thought the words “General Motors” and “moves quickly” could never be uttered in the same sentence probably didn’t anticipate CEO Mary Barra.

    Under her leadership, Detroit’s No. 1 automaker is moving quickly to redefine its global automotive footprint, to boost its margins, to redeploy precious capital to high-profit pickups, SUVs and their flip side: the steadily evolving autonomy-and-mobility space.

    Her moves to stop selling cars in India and to off-load GM’s South Africa operations to Isuzu Motors Ltd., announced Thursday, are two more examples of a continuing global pullback that shows the automaker is deadly serious about fattening profits and focusing finite automotive capital where it can generate the best return and better ensure its future.


    Old GM it ain’t. This is not your father’s auto industry anymore, either. The industrial hegemony atop the nation’s most valuable companies has been displaced by leading tech and financial heavyweights like Apple and Google parent Alphabet Inc., Amazon.com and Facebook, Microsoft and JP Morgan Chase.

    They are now America’s most highly valued companies, not the likes of GM and Ford Motor Co. or their industrial peers. Tech’s fluid and fast-moving business models are reshaping investor perceptions and driving expectations for growth and innovation — a high bar for the low-margin auto industry to meet, if it can at all.


    That reordering, complete with the fat margins and growth prospects to go with it, is exerting relentless pressure on Detroit’s century-old automakers to rationalize, to exit businesses offering meager profit expansion, to make smart plays in autonomy and mobility lest its high-tech nemeses get there first.

    This is a race, and right now GM is outpacing Ford. Barra’s decisiveness is drawing a distinct contrast to Ford’s apparent indecision. Ford’s move to offer 1,400 salaried buyouts in North America and Asia evinces a more cautious response to investors demanding to see a clearer path to sustained growth.

    GM’s electric Chevrolet Bolt is in showrooms; Ford’s answer is not expected to debut until 2020. GM is exiting such marginally profitable markets as India; Ford continues to study its presence there, where the Blue Oval’s global “One Ford” products have been deemed wrong for a market that mostly cannot afford them.

    Neither GM nor Ford have summoned the courage to mimic Fiat Chrysler Automobiles NV and exit small cars in the United States. But Ford is giving the segment a hard look, despite back pressure from internal constituencies and dealers, in an increasingly urgent bid to answer two questions: where to play, and how to win?

    The upshot: America’s two largest mass-market automakers are fast approaching the point where they will cease being all things to all people, chiefly because the slim returns don’t justify the outsized expense. And, second, because looming autonomy, mobility and electrification plays represent more competition for finite resources, not less.

    Barra and President Dan Ammann aren’t just talking about strategic realignment. They’re doing it, adding two more markets to a lengthening list that includes exiting Russia and the rest of Europe, ending production in Australia and Indonesia, and leaving battered operations in Venezuela.

    They don’t have much choice: Detroit’s automakers, as well as its foreign-owned rivals, are negotiating a fraught transition from the century-old auto industry they know into a broader transportation ecosystem they’re learning by doing.

    Its new technologies and new competitors, many deeply rooted in Silicon Valley, are forcing the companies that put America on wheels to overhaul their business — or risk being left behind by markets of consumers, investors or both. Shares of GM are stuck in neutral, and shares in Ford are down 40 percent since CEO Mark Fields succeeded Alan Mulally in July 2014.

    No more can Detroit’s automakers be pension and health-care providers first and vehicle sellers second. No more can they pay workers not to work or reward executives for under-performing. Not for long can they keep playing in markets with the wrong products at the wrong price and call it success.

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    Re: In global pullback, GM moves because it has to

    All well and good. But where's the beef, (product?)
    Pony Car: an affordable, compact, highly styled car with a sporty or performance-oriented image and an available V8.

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    Re: In global pullback, GM moves because it has to

    Interesting that GM seems to be bounding ahead in North America and China while its ROW markets contract....
    We're seeing Barra forcing GM to confront the truth and focus on markets that make money and get out
    of areas that simply drain funding and resources.

    While GM cannot do a "One Ford" make over due to its multi brand chanel strategy, it can work to maximize
    scales of economy with vehicles across it two primary markets. It makes sense if long term, GM is looking
    a maybe acquiring other brands that are a better fit with where its heading.

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    Re: In global pullback, GM moves because it has to

    Not knowing enough about these markets I wonder who will fill in the gaps and take advantage of GM's departure.

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    In Emerging markets GM needs to offer luxurious American products such as SUVs and performance, build sales organizations, the rich can afford Camaros and Yukons

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    Re: In global pullback, GM moves because it has to

    India has on of the biggest middle class's in the world based on living stand wealth not income, the problem is they only earn $13,000 a year so they are gonna struggle with buying Chevrolet Cruze. Expensive Daewoo's, rebadged Chevrolets Daewoo's made by South Koreans who want to be paid 10 times more than the average Middle Class earns in India, and hyper expensive imported RHD Opel's have all tried and have all been epic fails in India.

    Most in India have to struggle get by on $1.95 a month in India, not sure what that bas out of the GM shed in India?

    Maruti the rebadged Suzuki brand is the most popular brand with over 50% market share.

    Japan's Wagon R that was No 1 best selling car in Japan 7 years in a row, is what really sells well on a Maruti badge, a car that big families in India want.

    7 seat roomy extended stretch Wagon R is what the average Middle Class in India aspire to. GM had the boxy Wagon R based Opel Agilia in Europe, they should have shipped the tooling to Delhi and built them in India once the Mk1 Agilia production ended in Europe.

    7 seat Maruti Wagon R


    Maruti Wagon R with a spacious quality interior with space & headroom in the front & rear, not cramped like a Beat or Spark garbage sold at a huge loss.


    GM's best selling car was the 7-10 seater RWD Tavera ideal for the big family and was a very popular taxi in India, so GM give them a cramped up Beat or Spark and sell them at a huge loss that keep on mounting up in India.

    A roomy spacious practical durable RWD Tavera is the only GM car that sold well India at a profit.


    Just what a typical big Middle Class family in India wanted a Chevrolet Tavera with 7-10 seats sold at a profit.


    So GM sent India the Beat & Spark cramped garbage and sold them at a huge loss instead, and the huge losses continued to mount up, surprise surprise GM then pull the plug on India.

    The boxy RWD Wuling Sunshine was always GM and China's No 1 best selling car use to sell close to 1 million units in China in the best selling years, its a shame GM never sent the tooling out to India, the RWD boxy GM Wuling Hongguang was the best selling vehicle in China last year with 650,000 sales he way to go in India if only GM offered it the instead of garbage like the crap FWD Beat & Spark that only racks up a huge loss where ever it is sold in the world and kills of another GM overseas operation.
    Last edited by Oldsmobile stopped; 05-20-2017 at 03:03 AM.
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    Re: In global pullback, GM moves because it has to

    Quote Originally Posted by Z284ever View Post
    All well and good. But where's the beef, (product?)
    The product you want(rwd V8) or the product the majority of the people want (Toyota Camry)?

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    Re: In global pullback, GM moves because it has to

    Quote Originally Posted by Oldsmobile stopped View Post
    ...
    Maruti the rebadged Suzuki brand is the most popular brand with over 50% market share.

    Japan's Wagon R that was No 1 best selling car in Japan 7 years in a row, is what really sells well on a Maruti badge, a car that big families in India want.

    7 seat roomy extended stretch Wagon R is what the average Middle Class in India aspire to. GM had the boxy Wagon R based Opel Agilia in Europe, they should have shipped the tooling to Delhi and built them in India once the Mk1 Agilia production ended in Europe.
    ...
    Agila, as you mentioned, was a re-badged Suzuki WagonR and I doubt GM had the permission to modify it and even if they would, making a seven seater out of a car the size of the new Chevrolet Spark isn't that easy or cheap.

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    Re: In global pullback, GM moves because it has to

    The shrinking, or lack of, a middle class is a world wide problem, not just a N.A problem, and it seems to be accelerating.

    The economies of SA, Russia, Europe, and Asia are slowing and with gains only going to the extreme upper class.

    Geo-Politics, Xexits, and rumblings of conflicts/war will only stifle car sales and drive fuel costs higher.

    To support far flung GM operations, there needs to be a market size of volume, or the infrastructure cannot be supported.

    Some have said GM is running away crying, but it's more that they finally have figured out that it's better to remove gangrenous limbs than allow the them to be a risk to the corporate body.

    Ford is only now starting to apply pressure via tourniquet, and that only at investor displeasure, who see GM's profits, EV positioning, and loss containment measures as years ahead of Ford.

    The huge money they borrowed to Retool, before Old GM's demise and subsequent bankruptcy and government loans/guarantees, has been spent, and they have gotten behind while GM's restructuring is well on it's way.

    EV costs, and Ford hopes to leverage salary employee cuts to R&D EV.

    The car business is going thru revolutionary changes, and so are the markets, and deep pockets will determine the survivors.
    Last edited by Carbide; 05-20-2017 at 08:28 AM.

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    Re: In global pullback, GM moves because it has to

    Quote Originally Posted by BlackGTP View Post
    The product you want(rwd V8) or the product the majority of the people want (Toyota Camry)?
    Both.
    Pony Car: an affordable, compact, highly styled car with a sporty or performance-oriented image and an available V8.

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    Re: In global pullback, GM moves because it has to

    Quote Originally Posted by Carbide View Post
    The car business is going thru revolutionary changes, and so are the markets, and deep pockets will determine the survivors.
    I ponder if Toyota and Honda might face one day the same music as well?

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    Re: In global pullback, GM moves because it has to

    Quote Originally Posted by Stéphane Dumas View Post
    I ponder if Toyota and Honda might face one day the same music as well?
    I think they all will. I'm a firm believer, and I think GM is also, that self driving cars will bring a fundamental change to the automotive landscape. Cars will be a commodity and money made off of renting them, for the most part individuals won't own them unless you are in extremely rural areas***. Wouldn't surprise me if there are only a couple of auto makers once self driving goes mainstream. I'll buy stock in construction as everyone converts their garages into living space.

    *** And I'll be interested in how that plays out with ownership for a small percentage of the world that lives in very rural areas. And for the super rural where off road capability will be needed and presumably the person will need to drive, what will happen there? I assume cars will loose their steering wheels, gas pedals, dashboard, etc. - will it be cost effective to build cars with all of that when 99% of the population doesn't need or want it?

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    Re: In global pullback, GM moves because it has to

    Quote Originally Posted by Z284ever View Post
    Both.
    But you have the Camaro, you just don't like how it looks. And the Camaro is an incredible performer. And the market for rwd V8 cars is really small, the Chevy SS (granted, no advertising) and Charger prove that. And the Charger needs a decent amount of cash on the hood as I recall reading. Doesn't seem like an area where there will be a strong ROI, and GM wants strong ROI's.

    And don't get me wrong, I do like rwd and V8's and don't want to see them go away. But there aren't that many people left who will actually buy one. Just like the Ute, everyone thinks they are cool, want one, but in real life few will put their money where their mouth is.

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    Re: In global pullback, GM moves because it has to

    Quote Originally Posted by BlackGTP View Post
    I think they all will. I'm a firm believer, and I think GM is also, that self driving cars will bring a fundamental change to the automotive landscape. Cars will be a commodity and money made off of renting them, for the most part individuals won't own them unless you are in extremely rural areas***. Wouldn't surprise me if there are only a couple of auto makers once self driving goes mainstream. I'll buy stock in construction as everyone converts their garages into living space.

    *** And I'll be interested in how that plays out with ownership for a small percentage of the world that lives in very rural areas. And for the super rural where off road capability will be needed and presumably the person will need to drive, what will happen there? I assume cars will loose their steering wheels, gas pedals, dashboard, etc. - will it be cost effective to build cars with all of that when 99% of the population doesn't need or want it?
    And what about the construction and trades industry, delivery services plus OTR trucking and many other things? I think all this autonomy fetish is very narrow minded and short sighted to say the least. There are many aspects of the "auto" industry and all that it encompasses that will not be able to have this even be feasible.

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    The only way for GM is to build sales and service organizations in these countries and export aspirational products, just like the United States.
    Clearly, Daewoo is not their strength.

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