General Motors has made a full recovery, more or less, from the unprecedented crisis which almost brought about the complete collapse of America's biggest car company in 2009. Until recently, the group was the undisputed global leader in the automobile market, with an extensive portfolio housing eight of America's most celebrated automobile marques as well as a large international footprint. As recently as 1980 almost one out of every two new cars sold in America were made by General Motors, and it enjoyed a similarly dominant position in other countries as well. Yet in the harsh automotive environment of the 21st century, GM struggled to maintain its lead in the face of brutal competition, especially in the US, from manufacturers offering more flexible, less gas-hungry cars. A catastrophic fall in sales across the whole market during 2008 left the group poised on the brink of bankruptcy and it was overtaken for the first time in its history as the global #1 by rival Toyota. The following year, GM finally accepted defeat and filed for Chapter 11 protection. A new and much smaller GM emerged from bankruptcy having shed the bulk of its huge debt burden as well as half of its car brands. Only one major problem remained: its long-struggling business in Europe. It finally found a solution to that dilemma too in 2017 with a deal to sell Opel and Vauxhall outright to French manufacturer PSA. It will also withdraw from India and South Africa.
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Adbrands Weekly Update 4th Jan 2018: Early estimates suggest that global car sales surpassed a record 90m in 2017 as a result of the continuing recovery in Western Europe and a rebound in emerging markets like Brazil and Russia. However US sales slipped back for the first time since 2009, down almost 2% to 17.2m vehicles. That still represented an unprecedented three-year run of over 17m per year, but market watcher Edmunds predicts an even steeper decline this year to 16.8m. The biggest growth factor in US sales has been the surge in sales of light trucks over traditional passenger cars. For the year, SUVs and pickups accounted for almost two-thirds of total sales, rising to 69% of total sales for the final month. GM led the market with just over 3m units for the year, down a little over 1% on 2016. Cadillac and Buick were both down, 8% and 4.5% respectively; so was Chevrolet, slipping 1.5% to 2.06m units. However, those declines were offset by GMC's 2.6% increase. Ford held second place with a total of 2.59m deliveries, also down 1%. The Ford brand's 2.51m units were led by the F-series pickup, which marked its 36th year as America's best-selling model. Toyota group sales slipped 0.6% to 2.4m units, but volumes of 2.13m for the main Toyota brand lifted it above Chevrolet to become the #2 seller in the US. The Camry was surpassed as Toyota's top-selling model for the first time in 28 years by the RAV4 compact SUV. FCA sales fell 8% to 2.04m, as a 2% increase for Ram was offset by near-20% declines for Fiat and Chrysler, and 10% and 12% slides for Jeep and Dodge. Honda and Nissan both claimed best-ever sales in the US at 1.64m and 1.59m respectively, but Hyundai and Kia were down for the year by 13% and 9% respectively. That allowed Suburu to overtake Kia for the #9 position among US autos with a 6% increase to a best-ever 648k units. Mercedes-Benz retained its crown as the top-selling luxury brand at 375k.
Adbrands Weekly Update 7th Dec 2017: Uwe Ellinghaus stepped down as chief marketing officer for GM's Cadillac brand after almost four years, apparently for personal reasons. A search has been launched for his successor.
Adbrands Weekly Update 25th Oct 2017: General Motors posted a startling $3bn loss for the latest quarter, reflecting the write-off of a huge tax allowance following the sale of Opel Europe and a slowdown in US manufacturing during the quarter to clear old inventory. However, the numbers weren't anything like as bad as that big red loss suggested. Operating profit excluding discontinued operations beat analysts' predictions for the third quarter in a row, and GM said 4Q figures would show a big improvement as domestic factories resumed normal operations. As a result, investors rewarded GM for its refocus towards higher-margin products by marking up shares by as much as 3% to their highest level since 2010.
Adbrands Weekly Update 23rd May 2017: General Motors has accelerated its pullback from the international sector following the decision earlier this year to sell its European Opel and Vauxhall operations to PSA Group. The group will also now withdraw from retail markets in India and Africa. It plans to exit South Africa altogether, with the sale of its manufacturing facilities there and also in East Africa to Japanese company Isuzu. The two groups were already partners in a local joint venture to make light commercial vehicles. The future of Opel in South Africa has yet to be determined: GM says it will work with PSA to "evaluate future opportunity" for the brand in South Africa. In India, GM will retain its local manufacturing operations but these will be restricted from now on to production of export vehicles. The Chevrolet brand, already withdrawn across Europe, will also be phased out in India and South Africa by the end of this year. GM is expected to retain its extensive operations in other Asian markets as well as in the Americas.
Adbrands Weekly Update 9th Mar 2017: It's a deal. In an end of an era moment, GM has agreed to sell its European automobile division, and associated financial services operations, to PSA Group of France, makers of Peugeot and Citroen. Rumours of negotiations first surfaced two weeks ago. PSA is paying a rock-bottom E1.3bn for the still-struggling Opel business in continental Europe and somewhat healthier Vauxhall unit in the UK. It's a bargain price for a business that generated sales of almost $19bn last year. Better still for PSA, only half of that sum is being paid now in cash, with the rest in warrants to acquire around 4.2% of PSA's equity in five years' time. PSA is teaming up with French bank BNP Paribas to acquire the finance business for an additional E900m in cash. The price is a measure of GM's eagerness to offload its European division, which has racked up losses of over $15bn in the past two decades. In addition, GM will take a charge of as much as $4.5bn to cover impairments and some of its European pension obligations. That's thought to include a E3bn payment to PSA to cover some of the shortfall in Opel's pension fund. On a net basis, therefore, GM is effectively paying PSA around E800m to take Opel off its hands. The sale will bring to an end GM's turbulent 90-year involvement in the world's third biggest car market, while also elevating PSA into the #2 spot in the region behind Volkswagen. The question is whether PSA, itself only now just around the corner after years of difficulties of its own, can make the deal work. It has promised to preserve Opel/Vauxhall's manufacturing commitments across Europe for five years, but at some point the axe might need to fall to improve profitability. PSA CEO Carlos Tavares also plans to make use of spare capacity at Opel's plants to boost exports beyond Europe, primarily into Latin America, North Africa and parts of Asia.
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Free for all users | see full profile for current activities: The bankruptcy of General Motors in 2009 brought to a close just over 100 years of prominence as an icon of American business. Indeed, at its peak in the post-war period, the company was in effect a symbol of America itself, a leader in technology, design, innovation and consumer choice. As GM's president in the early 1950s, Charles E Wilson, was reported to have said: "What's good for General Motors is good for the country". Yet by the 1990s, and even occasionally in the two decades before then, the company had increasingly became an emblem of everything that was wrong about the country. Inflexible, tied to inflated ideas of its past glory, unwilling to accept new ideas, and unable to integrate its multiple competing brands.
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