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Chapter 11 bankruptcy
PESTLE ANALYSIS
CONCLUSION
RECOMMENDATION
Bibliography
GENERAL MOTORS:
General Motors Corporation was formed on September 16, 1908, in Flint,
Michigan, as a holding company controlled by William C. Durant, owner of Buick. General
Motors produces vehicles in 37 countries under twelve
brands: Chevrolet, Buick, GMC, Cadillac, Holden, HSV, Wuling, Baojun, Jie Fang,
and Ravon. In addition to its twelve brands, General Motors also holds a 20% stake in
IMM, and a 77% stake in GM Korea. It also has many joint-ventures, including Shanghai
GM, SAIC-GM-Wuling and FAW-GM in China, GM-AvtoVAZ in Russia, Ghandhara
Industries in Pakistan, GM Uzbekistan, General Motors India, General Motors Egypt, and
Isuzu Truck South Africa. General Motors employs 212,000 people and does business in
more than 140 countries. General Motors is divided into five business segments: GM
North America (GMNA), Opel Group, GM International Operations (GMIO), GM South
America (GMSA), and GM Financial. General Motors led global vehicle sales for 77
consecutive years from 1931 through 2007, longer than any other automaker, and in 2012
was among the world's largest automakers by vehicle unit sales.
In India, they launched cars under Daewoo and Chevrolet. Daewoo Matiz couldn’t
get the right traction and hence was discontinued. It didn’t have right after sales support
and clear marketing strategy. Chevrolet on the other hand came up with different cars in
different segments like Beats and Cruze, but again neglected the above two important
factors for sales.
Chapter 11 bankruptcy
On June 1, 2009, after heavy losses, General Motors went bankrupt. Stockholders
lost essentially all their investment.
The 2nd generation Buick LaCrosse has been cited as an example of a GM's
revival following its restructuring in the aftermath of the Great Recession.
On July 10, 2009, General Motors emerged from government backed Chapter 11
reorganization after an initial filing on June 8, 2009. Through the Troubled Asset Relief
Program, the US Treasury invested $49.5 billion in General Motors and recovered $39
billion when it sold its shares on December 9, 2013 resulting in a loss of $10.3 billion. The
Treasury invested an additional $17.2 billion into GM's former financing company, GMAC
(now Ally). The shares in Ally were sold on December 18, 2014 for $19.6 billion netting
$2.4 billion. A study by the Center for Automotive Research found that the GM bailout
saved 1.2 million jobs and preserved $34.9 billion in tax revenue.
Also in 2009 as part General Motors Chapter 11 Bankruptcy, the company shed
several brands, closing Saturn, Pontiac, and Hummer, while selling Saab Automobile to
Dutch automaker Spyker, and emerged from a government-backed Chapter 11
reorganization. In 2010, the reorganized GM made an initial public offering that was one
of the world's top five largest IPOs to date and returned to profitability later that year.
AFTER BANKCRUPCY ADVERTISEMENT FAILURE:
These advertisements couldn’t create the Hussle in marketing domain of GM and failed
to create any impact on the people. The cost of each campaign was in millions of dollars,
all went in vain.
• BEAT: Chevrolet Beats is the most celebrated car of Chevrolet in India and that’s
why Chevrolet loves investing money in ad campaign for this compact hatchback.
They came up with campaigns like “CHOOSE YOUR VERSION”, “TURN ON
STYLE, TURN ON BEAT”, “BOTH SENSIBLE AND FUN”
• CRUZE: This car is one of the best and and sturdy car developed by Chevrolet
under GM. This sedan is powerful and huge and needed a good ad campaign and
hence Chevrolet came up with “MOVES THE MONSTER”, “FOR THOSE WHO
DO THEIR OWN THINKING” and appreciated the millennials of India
• ENJOY AND SAIL: These two cars couldn’t create much impact on Indian
population. Enjoy is a classic family car and Sail is a hybrid of sedan and
hatchback. The campaigns “DOMINOES”, “ALWAYS ROOM FOR HAPPINESS”
and “NEW CAR DAY” couldn’t create space in Indians’ heart and hence failed
GM pulls out of India operations of selling but will keep the export facility on as India
serves as a strategic location for exports to other parts of the world.
This announcement is consistent with GM’s global disciplined allocation of capital and
investment in its business around the world designed to generate stronger returns and
drive shareholder value.
GM’s troubles are by no means unique. India is among the world’s fastest growing
auto markets, but also notoriously difficult to crack. According to figures from the Society
of Indian Automobile Manufacturers SIAM for April 2017, Maruti Suzuki dominates with a
51.9% share followed by Hyundai at 16.12%. Some of the world’s most storied brands
have run out gas, had to take long pit-stops and either returned like Fiat and Renault or
never bothered returning, like Peugeot. GM is just the latest addition.
• It launched the wrong cars at the wrong time: GM’s first salvo was Opel,
launched in 1996.Vectra was very sophisticated, fully computerized but ahead of
its time, keeping in view bumpy, potholed Indian roads. And this was true of all
three Opel brands: great products, wrong timing. Right timing would continue to
elude GM. As Indian consumers got more demanding GM’s lack of investment in
technology led to an aging portfolio.
• It couldn’t keep up with the Indian consumer: The auto consumer in India is a
paradox: at once, extremely value conscious and very demanding. They want
more for less, if not for free! But at the same time, they are willing to pay for
something truly life changing. Probably GM tried to bring global solutions here. But
the market is so big, it needs and deserves solutions tailored for it in terms of
product, service and the way you connect with dealers.
• Indian cars sell by word of mouth: Indian auto purchases tend to be consensus
driven. Even before a car has been bought, discussions abound over its potential
resale value. The middle-class population is risk averse. Much more than what an
ad says, what your neighbor drives and your uncle recommends, has an impact.
CHEVROLET ENJOY
CHEVROLET CRUZE
DAEWOO MATIZ
OPEL ASTRA
(HATCHBACK)
PESTLE ANALYSIS OF GENERAL MOTORS:
2009-10 would have been the time Chevrolet was on full throttle. Strong Marketing
Campaigns, New Product launches, Better market reach, Stability after riding on Uncle
Sam’s shoulder and what not. The Indian market seemed of great value to every car
manufacturer. GM is focusing on emerging markets and pumping more than ever on
Indian operations.
At a time when majority of car makers are busy on focusing on customer centric
dealership (Upmarket Dealerships, Lounge area, Children play area, Cafe, WiFi, Tablets
with Sales person, Valet services, etc.). Chevrolet isn’t even bothered about poor
consumer experience at showrooms and building trust in customer.
Learn from other foreign car makers, design and develop product range for India.
Suzuki does it for all their models, Hyundai does it for more than half of their line-up,
Honda did it with City more than a decade ago and brought their diesel heart for Indian
demands in all their cars after tasting the hard waters, Ford did that with Figo, the
EcoSports and now the Aspire series.
WHAT WE RECOMMEND:
• RE-ENTER INDIAN MARKET WITH NEW PRODUCT: It took Maruti and Hyundai
less than 2 years to get the Duster competitor ready. Chevy should find relevant
products for the masses. What a good time this is to launch the all new Beat (or the
new Spark).If Chevy really wants to sustain in this competitive zone, it needs to bring
the best products timely.
• IMPROVE THE DEALERSHIP EXPERIENCE: With close to 250 dealers. It’s matter
of time before new products are launched. Just the dealership experience must be
taken a level up. Why not launch Impala, Corvette or the Camaro to enhance the brand
pull and make shoppers at showroom busy with selfie or other marketing campaign
• CATER TO INDIA: Start working on Indian systems, as the market is dynamic and
ever changing. Many players have failed so Chevrolet must be correct this time,
understanding the demographics and psyche of Indian consumers.
• DON’T LET THE SALES FALL: Play with multiple engine options, add touch screens
infotainments, body-kits, change interior theme, new alloy wheel designs,
ABS/Airbags on lower variants, addition of sunroof and other stuff to maintain the
sales momentum. Look what VW did to Polo by creating so many iterations out of it.
Beat has been their best seller for a long time. You don’t need permissions from US
for small changes to the feature or specification modifications.
BIBILIOGRAPHY
• http://timesofindia.indiatimes.com/business/india-business/Top-3-auto-
companies-hold-70-market-share/articleshow/50749746.cms
• https://www.gm.com/
• http://www.chevrolet.co.in/
• http://fortune.com/2017/05/18/gm-india-withdrawal/
• https://hbr.org/2017/06/what-u-s-ceos-can-learn-from-gms-india-failure
• http://www.financialexpress.com/auto/car-news/general-motors-is-the-only-one-
to-be-blamed-for-their-downfall-in-india-and-heres-why/674686/
• http://overdrive.in/news-cars-auto/opinions/what-went-wrong-with-general-
motors-in-india/
• http://www.firstpost.com/business/general-motors-stops-selling-cars-in-india-
heres-what-went-wrong-for-the-auto-major-3458690.html
• http://www.youtube.com/