GM International Ops Bolstering Bottom LineBy Paul Seredynski April 25, 2011
At last week's Shanghai Auto Show, General Motors International Operations (GMIO) President Tim Lee (left), and GMIO VP of Sales, Marketing and Aftersales Susan Docherty (below) presented an overview of GM's emerging markets. Though GMIO also operates in mature markets such as Australia and South Korea, new markets that include China and India are expected to drive growth and be the largest contributors to GMIOs bottom line. The presentation is likely part of GMs continued push to showcase its global earnings potential, as it anticipates a sale of more of its U.S. government-owned stock.
GMIO does business in over 100 individual markets representing 80 percent of the worlds population. The fastest growing part of GM, the 98,000-employee group operates 61 plants in 15 countries, and serves most of the globes emerging markets including Russia, Africa, India and the Middle East. Last year, GMIO accounted for 41 percent of GMs vehicle sales (up from 7 percent in 2000), and 28 percent of global Chevrolet sales (up from 1 percent in 2000). Between 2009 and 2010, GMIO region sales jumped 25 percent (to over 3.3 million units). China is the biggest player for GMIO, contributing 28 percent of GMs total global sales volume.
GMIOs branding strategy revolves around Chevrolet, its sole global brand, which operates in all its markets save Australia. The bowtie brand accounts for 35 percent of GMIO sales, and will get another boost March 1 when it replaces the Daewoo brand in Korea. International brands Buick, GMC, Cadillac and Opel complement regional brands such as Holden (Australia), Wuling and Baojun (China). Key segments for GMIO are C-segment (Cruze), B-Segment (Aveo) and A-segment (Spark/Beat), and since 2005, GMIO sales growth in its markets (17.9%) has exceeded the market average (10.5%) by 7.2 percent. China is again the star as GMs largest market, where it has topped market share since 2005. At 97.4%, Uzbekistan is the GMIO market share champ.
Sold in more than 90 countries, the new Chevy Cruze is essentially GMIOs poster child. With over 150,000 Q1 2011 sales, the Cruze is GMs top-selling car globally, where its offered with 12 different engines (diesel, gas, and LPG), seven transmissions and two body styles (we dont get the hatch in the U.S.). Chevy sold 187,737 Cruze in China alone last year. The huge growth in China is expected to cool in 2011, and GMIO is looking towards Russia and India as the next big players, with India tagged to become the worlds third largest market. A recent deal in Russia will allow an extra 350,000 units of capacity, and the Chevy Beat with a locally developed engine and LPG version was recently launched in India, where Suzuki is the almost uncontested A-class player.