In-Focus: GM’s 3 Year Pivot and Emerging Opportunities
GM has been battling high costs and dwindling market share in several markets around the world. This has prompted them to send a clear-cut message to its shareholders – if it doesn’t see a path to profitability, it’s going to bail.
In North America and China, there is a contrasting story. GM sold over 4 million vehicles in China in 2017 and sits at a comfortable 17% market share in North America. This has changed the company’s trajectory to focus primarily on these two markets and consolidate their business.
The company has made it clear that autonomous vehicles are the way forward, but it is not Detroit where GM is building the engineering hub of the future. GM’s center at Ontario is expected to emerge as a new autonomy hub following their $554 million investment.
Our research and ML models track different sources (executive interviews, 10Ks, and quarterly press releases) and predict how they may evolve over a three-year period. This gives technology sellers the chance to prepare for opportunities even before they arise and influence customers at a strategic level.
Consolidation of Markets in US and China
- GM sold its Opel and Vauxhall vehicle brands to the PSA group in Europe for $2.3bn and exited its operation, technology and sales facilities in Germany and Italy
- GM had already closed its Holden manufacturing plant in Australia in 2017. It is expected to wind up its E-R&D facility in Australia as part of 5-year plan to reach ~$5.5bn in cost efficiency by the end of 2018. GM posted high operational losses from its Australia operations in Q-4, 2017
- Predicted to exit Mexico due to strong export regulations by the Trump administration.
Emerging Buying Hub
- GM’s Ontario center is expected to emerge as a new autonomy hub following a $554mn investment. GM plans to hire ~1100 engineers largely to focus on Autonomous Driving and Connected Cars
- Shanghai is expected to become the ASIAN HQ for GM. The market’s major focus on electrification and access to a large profitable market in China are the key maturity drivers
- GM will set up its Asia-Pacific headquarters in South Korea for its long-term commitment to stay in the country after state-run Korea Development Bank offered $750mn as part of a $4.35bn cash deal to GM’s struggling unit in the east Asian nation
DRAUP’s BrainDesk team is deep-diving further into this to analyze what immediate and mid-term opportunities exist for technology providers. We will be releasing a report soon. Keep checking BrainDesk to know what our deep dive also revealed about other companies like United Technologies, Ingersoll Rand and much more!
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Our research and ML Models track different sources( Executive Interviews,10 Ks, Signals and Quarterly Press Releases) and predicts how they may evolve over a three-year period. This gives technology sellers the chance to prepare for opportunities even before they arise and influence customers at a strategic level.
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