Case Study of Automobile Industry, General Motors (GM) Focus
Research on General Motors
Description of Automobile Industry: Automobile industry is the modern manufacturing industry including commercial vehicles (CVs), cars, three-wheelers and two-wheelers segments.
The automotive industry has been playing a leading role in spurring growth in economies throughout the world since the industrial revolution. It is a sector characterized by not only tremendous potential growth, but also very high profile trade disputes, and intense competition. In the 21st century, the automotive industry confronts greater challenges as the industry undergoes fundamental changes.
Research on GM: General Motors is the world's largest automotive corporation operating in over 70 countries with a presence in more than 200 countries, more than 260 major subsidiaries, and a total of 395,000 employees worldwide which translate into global opportunities that span the planet. Founded in 1908, GM has been the global automotive sales leader since 1931. GM today has manufacturing operations in 32 countries and its vehicles are sold in more than 190 countries.
General Motors is involved in Telecommunications, Aerospace, Defense, Financial and Insurance Services, Locomotives, Automotive Systems and Heavy Duty Automatic Transmissions. In all GM does, their philanthropy and commitment to the environment in which they live, is unsurpassed in the industry.
GM Brands: GM's automotive brands are Buick, Cadillac, Chevrolet, GMC, Holden, HUMMER, Oldsmobile, Opel, Pontiac, Saab, Saturn and Vauxhall. In some countries, the GM distribution network also markets vehicles manufactured by GM Daewoo, Isuzu, Subaru and Suzuki.
GM Vision: To be the world leader in transportation products and related services.
Will earn customers' enthusiasm through continuous improvement driven by integrity, teamwork and the innovation of GM people.
In 2002, GM sold more than 8.5 million cars and trucks, nearly 15 percent of the global vehicle market. GM's global headquarters is at the GM Renaissance Center in Detroit. GM set industry sales records in the United States, its largest market, for total trucks and sport utility vehicles. GM became the first manufacturer to sell more than 2.7 million trucks in a calendar year and the first to sell more than 1.2 million SUVs. GM also increased its market share in the North America, Asia Pacific and Latin America/Africa/Mid-East regions.
Company Culture of GM GM has defined six core values for the conduct of its business The 6 core values define what GM wants to achieve and what GM wants to stand for as a company. They are not only the road map for corporate social responsibility: they are the drivers of all their decisions and activity in all countries. They are, in essence, GM's code of conduct. Every GM employee around the globe is aware of these six core values.
Integrity: We will stand for honesty and trust in everything we do. We will say what we believe and do what we say.
Continuous Improvement: We will set ambitious goals, stretch to meet them, and then "raise the bar" again and again. We believe that everything can be done better, faster and more effectively in a learning environment.
Customer Enthusiasm: We will dedicate ourselves to products and services that create enthusiastic customers. No one will be second-guessed for doing the right things for the customer.
Teamwork: We will win by thinking and acting together as one General Motors team, focused on global leadership. Our strengths are our highly skilled people and our diversity.
Innovation: We will challenge conventional thinking, explore new technology and implement new ideas, regardless of their source, faster than the competition.
Individual Respect and Responsibility: We will be respectful of the individuals we work with, and we will take personal responsibility for our actions and the results of our work.
General Motors is also proud to have played a key role in drafting the Global Sullivan Principles. These principles serve as a guide for companies of all sizes all over the globe, particularly in developing countries. The focus is respect for employees as well as health, safety, and dignity. By endorsing them, companies become a model for other companies in each country to follow.
In May 1999, GM announced its support of the Global Sullivan Principles as being consistent with GM's internal policies and principles, including its Winning With Integrity guidelines. The Global Sullivan Principles, which were developed by the Reverend Leon H. Sullivan and have their roots in the 1977 Sullivan Principles for South Africa, provide guidance to companies across the globe regarding core issues such as human rights, worker rights, the environment, community relations, supplier relations and fair competition.
GM Training GM believes in investing in its employees. As a result, GM offers a variety of continuing
education opportunities to further your career.
The formal training program consists of five components, of which the first three are available through GM University, which is one of the largest corporate educational programs in the world.
General Motor has established a learning organization and cultural for its employees across the entire enterprise. Called GM University, it's designed to align the company's training investment with its business needs, and disseminate best practices and core value.
1.Foundation skill training (i. e. computer software, GM history and business orientation) 2.Functional specific skills and techniques 3.Leadership and professional development 4.On-the-job training within each department In addition, GM supports advanced education and certification through tuition assistance, Cardean e-MBA program, and technical education programs.
Tuition Assistance Program - Regular active salaried employees are eligible for tuition assistance upon date of hire.
Graduate Education - A variety of graduate programs are available throughout GM. Check with the operating unit of interest to you for individual opportunities.
On-Site Classwork - A number of educational courses are offered in conjunction with educational institutions throughout the United States.
New Hire Mentoring - GM New Hire (GMNH) is the unique support system for new GM team members. Simply put, GM new hires are paired with our experienced GM team members with the primary objective of professionally transitioning and developing new hires into the GM culture. Providing and enabling them to experience professional growth, corporate culture, new ideas and perspectives, while driving for business results. Mentoring is critical as move into the future. The new hires of today, will be our leaders for tomorrow.
Accomplishments over the Years of GM 1920s: First anti-knock gasoline additives - led to high-performance fuels 1930s: First non-flammable, low-pressure refrigerants, which made vehicle and home refrigerators practical 1940s: First high-compression, internal-combustion engines 1950s: America's first turbine-powered car; forerunner of present-day computer operating systems 1960s: Pioneering work on experimental powerplants: gas turbines, steam, free piston, and Stirling engines; electric drive; and hybrids; first comprehensive data on human injury tolerance 1970s: Zirconia exhaust gas sensor - led to the successful use of three-way catalysts; pioneering work on atmospheric chemistry; first computer simulation of an automobile crash 1980s: Magnequench rare-earth permanent magnets; industry-leading computer vision systems for manufacturing; computer-based structural and acoustic analysis for vehicle design 1990s: Integrated chassis control; series of modern experimental vehicles: advanced electric, diesel-electric hybrid, turbine-electric hybrid, compressed natural gas-fueled and fuel cell-electric vehicles; Partnership for a New Generation of Vehicles (PNGV); magneto-rheological fluids; Adaptive MagnaSteer Variable-Effort Steering The Cultural Revolution in the Marketplace The concept of marketing has been changing from products-oriented to customer-oriented over the years. In the traditional automobile industry, the important part is machine process, but nowadays, the high technology creates more and more added values for automobile products.
Establishment of General Motors diversity and related corporate initiatives is a key business consideration, as GM leads a corporate-wide cultural revolution. GM Chairman, Jack
Smith, is emphasizing four goals--globalization, growth, lean manufacturing, and using common practices wherever possible.
Reclaiming a 'Position of Excellence' Customer enthusiasm is General Motors' overarching goal and is the road to reclaiming a position of excellence in the marketplace. Establishing that perception is not an easy task, but the right mix of technology and a diverse work force has produced corporate agility and an aggressively managed corporation. General Motors is executing a complex counter-offensive to enhance its corporate brand image as an umbrella for its divisional and vehicle brands.
General Motors is moving aggressively to make its toughest sale of all -- itself, by intensifying the way it markets its divisional and vehicle brands to customers. Traditionally, GM has emphasized its individual brands, but has also taught customers those brands come from General Motors. Although GM was there, it was in the background. Now, the corporate brand push proclaims GM's quality, safety, and innovations, before directing customers to the individual car divisions they have known for decades.
Cultural Revolution GM's setback in the early '90s led to a still unfolding cultural revolution in which senior executive encourage risk-taking and open debate in the name of selling more cars and trucks to a diverse customer group. As a result, the recently adopted brand management structure identifies diverse markets with high sales potential for specific brands and develops strategies to focus those brands against those markets. These highly focused brands, including the "all new" Pontiac Grand Prix, Chevrolet Malibu, Oldsmobile Intrigue, Cadillac Catera, Buick Century, and GMC Yukon are being received enthusiastically by the marketplace.
Developing Effective Strategies Changing buyer demographics drives General Motors efforts in identifying new non-traditional ways to reach different customer groups. As a result, GM's fresh image is starting to emerge on a variety of fronts and with a series of alliances aimed at rebuilding the corporate brand image in highly targeted activities. GM is striving to connect with customers in a variety of promotions and venues. For an example, the exclusive automotive sponsorship of the WNBA, the professional women's basketball league formed by the NBA, is a powerful way to connect with women and crystallize a new type of relationship. GM's sponsorship of the basketball league will likely be joined with Concept Cure, GM's partnership with the fashion industry that has risen over $700,000 toward the fight against breast cancer. In this way, GM will continue to reach women through causes that matter to them.
In an intensely competitive market, GM leads a cultural revolution to reclaim a "position of excellence." Our goal is to reach every customer on their terms and provide them reasons to buy their next car or truck from General Motors.
Products - Work includes using advanced technology to develop vehicles with cleaner emissions and better fuel economy.
Plants - GM has reduced pollution from its North American manufacturing operations by 24 percent over the last two years.
Partnerships - General Motors is co-chairing a research project which studies sustained mobility needs and methods of transportation, as well as future land transportation systems. The World Business Council on Sustainable Development coordinates the three-year project.
People - The strongest asset of GM, well-trained and competent employees are essential to sustainable development. "We strive to have the best-trained environmental engineers in the world" For industrial companies, 'sustainable balance' is a term loaded with vast complexities, emotions and implications as we struggle with the balance between our growing global economy and our basic human needs, "General Motors understands the issues surrounding sustainability and is actively engaged at all levels of the company to create the balance between sustained economic and environmental needs. Not only do we see the moral issue, we agree that the economic upside to sustainability is considerable," GM's sustainable development efforts are focused on four areas: Products - Work includes using advanced technology to develop vehicles with cleaner emissions and better fuel economy.
Plants - GM has reduced pollution from its North American manufacturing operations by 24 percent over the last two years.
Partnerships - General Motors is co-chairing a research project which studies sustained mobility needs and methods of transportation, as well as future land transportation systems. The World Business Council on Sustainable Development coordinates the three-year project.
People - The strongest asset of GM, well-trained and competent employees are essential to sustainable development. "We strive to have the best-trained environmental engineers in the world," "Sustainabillity is a balance of environmental, social and economic objectives, how that balance is achieved will change from time to time as the make-up of the objectives change. But we people must maintain the equilibrium." Dealer Network -- The Key to Success For nearly three decades, General Motors has been committed to growing a diverse and financially successful dealer network. GM was the first U. S. automaker to institute a structured minority dealer initiative in the industry.
By today's standards, minority-owned dealerships are becoming more prominent. The path, however, was completely uncharted for those early pioneers who faced incredible odds in obtaining a retail automotive dealership. Those pioneers found that owning a piece of the "
American Dream" and running it successfully presented an even greater challenge than imagined but it laid the groundwork allowing us to realize the significant growth today.
Since 1972, GM has provided industry leading training opportunities to qualified minorities to help prepare them to become future dealers and to help them succeed once they become dealers. GM has increased the number of minority-owned dealerships to the highest number since the program began. Today, of the 332 minority dealerships GM includes in its ranks, nearly 70 percent own their dealerships outright.
As significant, GM has dramatically improved the quality of dealership opportunities. The selection process for identifying new dealerships has been standardized, and factors such as size, location, demographics, complexity of operations and investment are considered when matching candidates to dealerships. The result is that new minority-owned dealerships are more profitable than ever before.
The result is a "win-win" combination for everyone because managing dealer diversity increases opportunities for others while strengthening GM's competitive global advantage.
Competing All Over The World In Europe, America and Japan the three developed areas, the automotive leaders like GM, Ford, Fiat, Volkswagen, Honda, Toyota, etc...not only try for keep their market share domestically and occupy as much as the market as they can, but also at the same time compete with emerging countries like Korea and
Mexico at lower price products. In dealing with new growing markets like Asia-Pacific, East Europe and South America, those leading companies actively start to look for collaboration with local national industries while they still have to compete for more market share. They are like to abandon the traditional way which is to transfer outdated automobile to developing countries' markets, instead of that, exporting new technology and new concept automobiles to improve the local level of car industry become a mission statement of those who are leading the automotive industry localization. Beside that, the impact from developing economic countries on medium or lower price products can become a positive influence to the world leaders. Although it is impossible to avoid the multilevel structure of world auto industry, up to date, US, Japan, Germany, Italy and France are still playing important roles with their competitive strength and advanced technologies.
In competing with other automotive giants all over the world, GM has many competitive advantages: Across five continents, seven oceans, and twenty-four time zones, General Motors operates twenty-four hours a day building transportation for the world. This means the global opportunities at GM for talented people are as wide as the world. From the design and engineering of new state-of-the-art plants in Argentina and China, to developing new marketing programs for all of Europe, you can go as far as your hard work and determination will take you.
Throughout North America, GM builds, designs and markets some of the worlds most famous and most successful automotive nameplates.
International operations in Europe, Asia Pacific, Latin America, Africa and the Mid-East build and market vehicles under the Holden, Isuzu, Opel, Saab, Subaru, Suzuki and Vauxhall brands.
GM operates one of the world's largest and most successful financial services companies, offering a variety of automotive financing and home mortgage services.
GM produces advanced-technology electronics systems, products and services for the world's telecommunications, automotive electronics, aerospace and defense industries.
Trend of Automobile Industry Worldwide Over Time Cooperation and acquisition The international merge and acquisition in automotive industry has never stopped since a long time, all big companies have been trying for approaching their objectives by dedicating on competitive strength and taking out or merging competitors. In the late 20th century, there was powerful strength among those leading companies, the concept of competition changed in some ways. The main objectives are not to beat their competitors, but to collaborate in order to share a high expense on the new technology research of high-tech automobiles, thereby to minimize the risk of independent development.
Partnerships: GM's global partnerships include product, powertrain and purchasing collaborations with Fuji Heavy Industries Ltd., Isuzu Motors Ltd. and Suzuki Motor Corp. of Japan, and Fiat Auto Spa of Italy. GM, Suzuki and China's Shanghai Automotive Industry Corp. are partners in GM Daewoo Auto & Technology Co. of South Korea. GM also has technology collaborations with Toyota Motor Corp. and Honda Motor Co. of Japan, and vehicle manufacturing ventures with Toyota and Renault SA of France.
Partnership timetable: 1993: GM, Ford, and the then-Chrysler Corporation enter into an agreement with U. S. government to develop a production prototype vehicle by 2004 that gets up to 80 mpg while maintaining today's affordability and features. The program is called the Partnership for a New Generation of Vehicles. GM unveils its PNGV prototype, the Precept at the North American International Auto Show in January, 2000.
1994: The Coalition for Environmentally Responsible Economies (CERES) and GM mutually endorse each others' Environmental Principles. GM is the first Fortune 50 Company to endorse the CERES Principles. That same year, GM is the first automobile manufacturer to join CERES.
1994: GM and The Nature Conservancy sign commitment to work together on sustainability programs and initiatives.
1994: GM joins the President's Council for Sustainable Development 2007: GM forms a Supplier Environmental Advisory Council to ensure environmental awareness, pollution prevention and compliance from its suppliers 1999: GM & Toyota announce a 5-year collaboration to speed development of advanced technology vehicles Manufacturing and assembling modularization Modularization is a systematical integration of automobiles' accessories or sub-system according to its structural organization. Manufacturing & assembling modularization is that automotive accessories manufactures produce modularized systematical products, and then the car producers will finalize automobiles by simply assembling those modularized products. M & A modularization will lead to a great transform in car producing mode, this also includes discarding the traditional assembling lines and equipments, so as to reducing the amount of car accessories, cutting down the cost of management and operation, and improve the reliability of the products.
Car companies nowadays have many possibilities for sourcing raw materials, parts, and components, and assembling them into final goods to serve world-wide markets.
GM parts and accessories are sold under the GM, GM Goodwrench and ACDelco brands through GM Service and Parts Operations. GM vehicle engines and transmissions are marketed through GM Powertrain.
Environmental Auto-products Protecting environment and developing persistently are being realized and taken into account by more and more countries. The 21st century products will try for present a harmony between automobiles and our environment by developing new power, choosing raw materials, producing modularized accessories, and finalizing a whole car. In order to reach the standard and to save natural resources, new type of cars that are using electric, hydrogen and mixed power in the future will be well concerned. Meanwhile, some advanced designing concepts such as green design and whole life design are widely used.
Almost 10 years ago, GM reaffirmed their long commitment to the environment with the adoption by the GM Board of Directors of environmental principles. These apply to their operations worldwide. They cover a number of areas: Environmental preservation and restoration Reducing waste and pollutants Conserving resources Working with governmental entities for development of sound environmental regulations And assessing the impact of plants and products in the communities in which we live and work.
GM is committed to environmental preservation and restoration. However, GM believes both the economy and the environment can flourish. And that belief is being embraced more widely.
GM Environmental Principles General Motors Board of Directors adopted the Environmental Principles on March 4, 1991. They are intended to serve as a guide for all GM employees worldwide, encouraging environmental consciousness in both daily conduct and in the planning of future products and programs.
As a responsible corporate citizen, General Motors is dedicated to protecting human health, natural resources, and the global environment. This dedication reaches further than compliance with the law to encompass the integration of sound environmental practices into our business decisions.
The following environmental principles provide guidance to General Motors personnel worldwide in the conduct of their daily business practices.
1.We are committed to actions to restore and preserve the environment.
2.We are committed to reducing waste and pollutants, conserving resources, and recycling materials at every stage of the product life cycle.
3.We will continue to participate actively in educating the public regarding environmental conservation.
4.We will continue to pursue vigorously the development and implementation of technologies for minimizing pollutant emissions.
5.We will continue to work with all governmental entities for the development of technically sound and financially responsible environmental laws and regulations.
6.We will continually assess the impact of our plants and products on the environment and the communities in which we live and operate with a goal of continuous improvement.
GM Research Leadership: In 1955, GM became the first auto company to begin conducting atmospheric research.
In 1962, GM became the first auto company to construct a smog chamber for analyzing the content and effects of smog.
Also in 1962, GM became the first auto company to build a mobile laboratory to sample air pollutants.
1967: GM developed the industry's first sealed enclosure (SHED) test technique for measuring evaporative emissions. This technology was later adopted by the U. S. Environmental Protection Agency (U. S. EPA) as its official test for evaporative emissions.
GM was the first auto company to set up emission research laboratories in the two areas of the U. S. with the most severe pollution problems (at the time): Los Angeles and Denver.
Unleaded Gasoline: In 1970, GM became the first auto company to announce that it would manufacture all of its passenger cars and light trucks in the U. S. to run on unleaded fuel.
Reformulated Gasoline: GM proposed the idea of reformulated gasoline, which burns cleaner than traditional unleaded gasoline, in 1989.
1989: GM leads the formation of the Auto-Oil Air Quality improvement research program which led to cleaner reformulated gasoline In March 1991, GM endorsed the use of reformulated gasoline in all of its vehicles.
Electric-powered Vehicles: In 1990, GM announced the development of the Impact (EV1), the first zero-emissions vehicle to be developed for commercial production in the U. S.
*In 1996, GM was first to market an electric vehicle, the EV1, available for lease in selected markets.
Variable-fueled Vehicles (FFVs): 1991: The Chevrolet Lumina flexible fuel vehicle (FFV) is the first methanol FFV certified by the U. S. EPA FFV's operate on 85 percent methanol, ethanol, or gasoline, or any mixture of them.
Elimination of Chlorofluorocarbons (CFCs): GM spearheaded the auto industry's efforts to phase out the use of CFCs, which have been proven to damage the earth's ozone layer.
In 1990, all GM dealerships, assembly plants, and fleet garages in the U. S. and all dealers in Europe which service conditioning units were equipped with machines that recover AND recycle CFCs used in air conditioning.
Waste Reduction (Plants): In 1991, GM and the United Auto Workers (UAW) jointly implemented a program called "WE CARE" (Waste Elimination and Cost Awareness Rewards Everyone), with focus on prevention and elimination of potential waste before it becomes a matter of recycling, treatment, or disposal.
GM's vehicle manufacturing and assembly complex in Ramos Arizpe, Mexico, was the first plant in the world to use a system of microbiological filtering to treat both industrial and sanitary wastewater.
Recycling: In 1970, GM conducted the industry's first pilot test program for the collection and recycling of abandoned cars in rural areas and small communities.
In 1979, GM Europe's Opel subsidiary became the first auto manufacturer in Europe to mark all its plastic parts with internationally standardized material codes.
In 1990, GM became the first auto manufacturer to enter the engine remanufacturing business. In this venture, recycled used engines are remanufactured for sale through the GM Service Parts Operations (SPO) unit.
In 1990, GM's Saturn division was the first to employ the lost-foam casting process for engine manufacturing, a process which results in a significant reduction in the amount of contaminated waste sand generated in the molding process. The lost-foam casting process is also used on the new L850 twin-cam four cylinder engine that is standard on the new Saturn L-series midsize sedan and wagon (create link).
In 1990, GM Europe's Opel subsidiary was the first German manufacturer to use recycled plastics in its Calibra model.
In 1991, Opel announced that the 1992 Astra sold in Germany would be the first vehicle on the market with a guarantee that the vehicle will be taken back free of charge for recycling at the end of its life cycle.
1995: GM publishes first industry
paper on calculating recycle ability of automobiles Automotive technology digitization Automotive industry is adapting the future demand of digitization and intelligentzing. Multimedia system, auto intellectual security system, comfort management system, phonetic identify system and multi-digital technology will be applied. Digitization technology will change automobiles design, development and manufacturing methods, for example, computer virtual design technology conducts new model testing under a virtual environment; new facilities and assembling lines will be created under the virtual technology, consequently, producing process will become controllable and precise, target cost will be rigidly navigated.
GM to offer XM satellite radio in most 2004 model lines General Motors is to widen the number of vehicles on which it offers XM Satellite Radio as a factory-installed option from 25 in the 2003 model year to 44 for the 2004 model year, more than three-quarters of its entire fleet of cars, trucks, minivans and sport utility vehicles. Satellite radio, offered by XM and its rival Sirius, offers coast-to-coast listening of mostly commercial-free programmes with a sound quality claimed to be superior to FM. The fledgling services are, however, about to face new competition from digital radio broadcasting which gives car buyers yet another in-car entertainment choice.
Service Innovation The competition among auto industry runs like a battle, at the same time when each individual car maker endeavor to lower cost, increase profit and develop new technology, they also come to start on a brand new concept of marketing and service. The four corners service and the ceaseless innovation has become a secret weapon to win target customers and competitive initiation, and it will make car service the most active one among the 3rd industry, and will as well direct the car service into individuation, systematization, intelligentizing and low cost.
GM operates one of the world's largest and most successful financial services companies, GMAC, which offers automotive, mortgage and business financing and insurance services to customers worldwide. GM's OnStar is the industry leader in vehicle safety, security and information services. GM's other major businesses are Hughes Electronics Corp., which provides digital television entertainment and satellite-based services, and GM Electro-Motive Division, which manufactures diesel-electric locomotives and commercial diesel engines.
GM offers two new credit cards to boost sales GM teamed with Chase Manhattan Bank, a unit of J. P. Morgan Chase & Co. Inc., for the GM Business Card, and with Household International Inc., a unit of HSBC Holdings Plc, for the GM Extended Family Card.
General Motors planned to offer two new credit cards; this is to reward users with discounts on new GM vehicles. The new cards do not have limits on how much a holder can earn each year or apply toward a new vehicle. The GM Business Card will be available immediately, and could generate as many as 100,000 new accounts in the short term and few thousand vehicle sales this year.
The vehicle manufacturers use Internet to manage sales E-commerce is having profound effects on the car industry. Consumers use the Internet to become better informed before making a purchase. Online sites like Autobytel steer millions of car buyers toward specific dealers while the same sites deliver competing bids for cars, insurance and financing in a manner that lowers costs and improves satisfaction among consumers. Meanwhile, auto makers are using the latest in e-commerce methods to manage their supply chains and replenish their inventories. All of big car company have their own web site to sell cars Current Status of The Overall Industry The automobile industry is evolving rapidly on a worldwide basis. Manufacturers are merging, component design and manufacture are now frequently outsourced instead of being created in-house, brands are changing and the giant auto makers are expanding deeper into providing financial services to car buyers. Meanwhile, all of the biggest, most successful firms have become totally global in nature.
At the early age of 21st century, the world automobile market will present its newer characteristics with the development of world automobile industry and the world economy; the automobile market will be formed into a fresh structure, North America, West Europe and Japan, the 3 major markets penetrate interactively to seek upgrade. North America, West Europe and Japan are the three most developed economic areas which hold the largest automobile sales and capacity in the world. Due to their early market economy taking off, mature market growing, plus the three traditional markets will have to penetrate interactively.
Increased trade liberalization will certainly spark the growth of automotive industry particularly in Asia Pacific region, which is critical to future growth of the worldwide auto industry. China's accession into WTO and the implementation of AFTA will definitely intensify the competition amongst the players in this industry. The growth in car population and the automotive manufacturing industry will also stimulate the growth of automotive components and accessories exponentially. Generally, automakers are optimistic about the future opportunities in Asia Pacific and anticipate that, by the year 2006, vehicle sales in Asia Pacific will grow at a rate greater than that of Europe and North America combined and it is expected that over the next decade, the Asia-Pacific is the region with the highest growth potential and it will remain the most attractive auto market in the world for the long term.
China centered Asia Pacific, South America and East Europe, the demand for emerging economic areas increase rapidly. With the economy's continuous developing to Asia-Pacific, South America and East Europe, these 3 areas are growing into big important emerging economic markets. The big 5 car producing countries in the world, US, Japan, Germany, France, Italy all come to look for opportunities of cooperation, invest or establish car plants, and excel selling systems and service networks. Among those developing countries, China is becoming a powerful economy at its fast speed, the auto market is just at the prophase of the stage especially cars (home use), a tremendous potential will turn into an actual demand. Up to date, all big auto companies world based have found a way to work together with Chinese car companies.
Now, GM is a major player in China's growing automotive market. It has about 8.6 per cent of china's passenger car market, which will total about 1.1m vehicles in 2002. And it also has more than 3,800 employees, three joint ventures and two wholly owned enterprises in China. Those achievements in China market show that GM had a successful strategy in global expending. They found a new target market, China car market, which has the largest potential in the world.
China, with its population of 1.2 billion people, abundance of natural resources and growing economic vitality, its increasing importance in today's global economy cannot be ignored. From a commercial perspective, China represents an important emerging market for a vast array of products and services. In the case of motor vehicles, China is still a small part of the world vehicle market (about 7%), but it is projected to account for 25% of the increase in new global vehicle demand over the next decade. Therefore, influence by prosperous economic environment, China is becoming a new attractive target market for automakers throughout the globe.
GM develops rapidly in China market. In 2002, sales are up more than 40 per cent compared with 2001.The rapid growth in Chinese sales shows that GM do business very well in China, like the chairman of GM, Mr. Murtaugh said, "We are already maxed out on our capacity. We have achieved in five years what a lot of people, a lot of very smart people, thought would take 10 to 15 years." GM did a series of positive activities to adapt and hold china car market. In 2007, GM has a fifty-fifty joint venture automobile company, with Shanghai Automotive Industry Corporation (SAIC), built Shanghai GM (SGM)'s plant, which consists of vehicle, engine, and transmission assembly operations, as well as a marketing and administration headquarters. Total investment is about US$1.5 billion. It has an annual capacity through its two shifts a day of 100,000 cars, a number that the company has already exceeded in sales in 2002.
Products manufactured at SGM include a family of four mid-sized sedans, based on the Buick Regal and Century built in the US; the Buick GL8 executive wagon, also based on a van built in the US; and, the Buick Sail, a compact car based on the Opel Corsa, originally designed and built in Europe. The Sail is China's first compact car intended for the growing middle class.
In cooperation with Chinese partner in SGM, GM established the Pan Asia Technical Automotive Center in 2007. This is a US$50 million investment that provides automotive engineering services for its parent companies and other automotive companies not only in China but the Asia-Pacific region. These services include design, development, testing and validation of components and vehicles.
The cooperation with Chinese partner help GM developed in China quickly and steadily, especially in technology development. GM also helped China development in other social field.
GM established several partnerships and initiatives in China that create benefits beyond those of their direct business. For example, GM has been an active partner with the Chinese government in addressing current and emerging environmental challenges. This includes a joint research project with the Chinese and US environmental protection agencies to sample air quality and determine primary sources of pollution. In this vein, GM has taken a lead role in advocating the benefits and use of unleaded fuel in China.
GM has also partnered with the Chinese regulatory and safety community on research and development of safety and health standards to ensure that the best available technology is used. Furthermore, GM has sponsored more than a dozen study trips to the US by Chinese government officials on matters of health, safety, and the environment.
GM is a geocentric automotive company, all of these decisions and activities in China car market show that GM thinks globally and acts locally, these positive activities lead GM adapt and hold China car market quickly.
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