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General Motors Overview
General Motors is a renowned automobile manufacturer in the US and has been a dominant leader in the American automotive market for many years with a market share in double digits. The company was incorporated in 1908 and is headquartered in Detroit, US. Besides, it has also been able to expand beyond its home market and has a significant presence in emerging economies like China. With a market capitalization of more than 51 Billion USD, General Motors is among the top 300 most valuable companies in the world.
This article presents a delineated SWOT analysis of General Motors delving deep into the strengths and weaknesses of the company. Further, the analysis also diligently discusses the opportunities and threats in the external business environment with respect to the automotive industry. Besides, for an elaborate knowledge of SWOT analysis, you can read our all-inclusive SWOT analysis guide.
Table of Contents
A sincere and insightful SWOT analysis of General Motors
General Motor s’ Strengths
Market leader- General Motors is the leading automobile seller in the US. According to Statista, the company occupied 15.2% of the US automobile market in 2021. Further, the company also has plans to challenge Tesla and become a leader in the electric vehicle segment as well by spending $35 billion and launching 30 electric vehicles by 2025 (HT Auto, 2021).
Innovation- General Motors is focusing on developing innovative solutions for a long period of time. The company has developed a wearable human grasp called Robo-Glove that helps in decreasing the grasping force while operating the tools for a long time at the workplace and as a result, the person can hold the tool for an elongated time (NASA, 2022).
Further, for the comfort of the passengers, the company has introduced a new carbon fiber bed in the pick-up truck replacing it with a steel interior. The new bed is stronger and lighter in weight as well (Turpen, 2020). Moreover, General Motors is trying to disrupt the urban air mobility market on a large scale and is experimenting with the flying version of Cadillac that has the ability to take off and land vertically and carry the passenger above the streets and through the air. The car would be able to take off from the rooftop and can go up to the speed of 55 miles per hour (MI Tech News, n.d.).
Strong partnerships- General Motors has strategically partnered with different companies for various ventures. The company has recently collaborated with Honda to manufacture affordable EV crossovers within the price range of $30,000 with advanced Altium battery technology (Stumpf, 2022).
Further, the company has also partnered with National Renewable Energy Laboratory to improve the cost, performance, and durability of polymer electrolyte membrane fuel cells, which convert hydrogen and oxygen into electricity to power vehicles without emitting pollutants. In addition, General Motors has also signed a pact with Red Hat, which is one of the leading providers of open source solutions to design better in-vehicle software systems for General Motors vehicles (Red Hat, 2022).
Diversified brand portfolio- General Motors has different brands under its portfolio that include Chevrolet, GMC, Cadillac, and Buick. Further, the company has diversified into different businesses like finance and production of batteries for EVs. The variety of vehicles offered by the company includes hatchbacks, sedans, SUVs, pick-up trucks, etc.
Safest cars- General Motors’ cars are one of the safest in the world which is evident from the fact that many of its vehicles have received a five-star rating from the National Highway Traffic Safety Administration in the US.
General Motor s’ Weaknesses
Negative publicity- General Motors has been involved in serious issues that include allegations levied on it for deceiving the US government agencies regarding the emissions from its vehicles using some devices. Its vehicles have been found to emit two to five times more carbon emissions than the permissible limit (Eisentein, 2017). Further, many times General Motors had to recall its vehicles because of various reasons. These types of incidents can put a dent in the image of the company.
Overdependence on US markets- Around a third of the business for the company comes just from the US. As per Statista, in 2021, the company sold a total of 6.3 million vehicles globally while 2.2 million were sold just in the US. The company needs to diversify its operations in more markets in order to sustain itself in the long run.
Overdependence on US markets- Around a third of the business for the company comes just from the US. As per Statista, in 2021, the company sold a total of 6.3 million vehicles globally while 2.2 million were sold just in the US. The company needs to diversify its operations in more markets in order to sustain itself in the long run.
General Motors s’ Opportunities
More expansion in emerging markets- General Motors has minimal presence in most emerging economies apart from China. The Indian, Pakistani, Botswanan, and other Asian and African economies are witnessing a huge spike in the sales of automobiles and General Motors can expand its presence by launching affordable vehicles and tying up with local companies. For that, it is essential that General Motors effectively understands the cultural dimensions of the emerging automotive markets.
Further Diversification of product portfolio- General Motors can venture into new product segments, for example, the company can start production of electric bikes
General Motor s’ Threats
US-China trade tensions- General Motors is experiencing a negative impact of the US-China trade war. Its sales have continuously dropped over the last couple of years because of the anti-US environment in China. Further, the company imports lots of vehicles from China, and the US government’s increase in import tariff of 10% has led to the increase in the cost of the vehicles for the company (Smith, 2019).
Semiconductor shortage- The COVID-19 pandemic has resulted in a slowdown in the businesses because of which there is a huge shortage of semiconductor chips which is one of the main components used in the pro x duction of the vehicles. Further, the Russia-Ukraine war has led to more problems as Ukraine is the major supplier of the neon supplies used to manufacture semiconductor chips. The shortage of chips resulted in a reduction in the sale of about 0.5 million vehicles in 2021 compared to 2020. Further, the company was forced to close down its pickup truck factory recently and the company is cutting down on its production (Business Standard, 2022).
Change in government regulations- Though General Motors is shifting to electric vehicles, still most of the vehicles sold by the company comprise gasoline. Governments all around the world are tightening the regulations for carbon emissions to protect the environment and going by this motive, the US government has announced a ban on the sale of vehicles in the country from 2035. This can be a major challenge to the company if it doesn’t shift its production heavily to sustainable vehicles like EVs and hydrogen.
To encapsulate, General Motors has a strong presence in the US market and different brands and products provide it with the advantage of targeting different customer segments including the lovers of luxury, sporty as well as affordable cars. However, the company faces serious issues in terms of lying about its operations, and the current shortage of semiconductor chips can act as a barrier to further enhancement of the business. Furthermore, if you wish to analyze the external factors influencing the company, you can check out our detailed PESTLE Analysis of General Motors.
Recommended Readings
References
Business Standard. (2022). Chip shortage forces General Motors to pause production at Indiana plant. www.business-standard.com. Retrieved 16 May 2022, from
https://www.business-standard.com/article/international/chip-shortage-forces-general-motors-to-pause-production-at-indiana-plant-122032501305_1.html.
Eisenstein, P. (2017). GM Accused of Cheating on Diesel Emissions. /www.nbcnews.com. Retrieved 16 May 2022, from https://www.nbcnews.com/business/autos/gm-accused-cheating-diesel-emissions-n765146.
HT Auto. (2021). GM pledges to dethrone Tesla to become market leader in EV segment in US. auto.hindustantimes.com. Retrieved 16 May 2022, from https://auto.hindustantimes.com/auto/news/gm-pledges-to-dethrone-tesla-to-become-market-leader-in-ev-segment-in-us-41633578410123.html.
Red Hat. (2022). Red Hat and General Motors Collaborate to Trailblaze the Future of Software-Defined Vehicles. www.redhat.com. Retrieved 16 May 2022, from https://www.redhat.com/en/about/press-releases/red-hat-and-general-motors-collaborate-trailblaze-future-software-defined-vehicles.
Smith, S. (2019). How the trade war in China is hurting GM. finance.yahoo.com/. Retrieved 16 May 2022, from https://finance.yahoo.com/news/gm-china-trade-war-200048351.html.
STUMPF, R. (2022). Honda and GM Want to Build Sub-$30,000 Electric Crossovers. www.thedrive.com/. Retrieved 16 May 2022, from https://www.thedrive.com/news/45074/honda-and-gm-want-to-build-sub-30000-electric-crossovers.
