Even though General Motors is the largest car manufacturer in the world currently, it is facing losses in various markets. With a general decline in car sales all over the world especially Europe, GM with all companies under its control are facing loss in market share. It is only in China that GM is making profits resulting in its irreversible dependency on the Chinese market. GM was saved from bankruptcy recently and many analysts say that it was only due to the sales in China that GM could float its boat.
GM sold 2.5 million vehicles in China in 2011. Now even the Chinese market is facing a minor slowdown, with sales not growing as fast as expected resulting in lower production and sales than the capacity. GM China is now seeing an overall reduction in profits due to the slowdown. Furthermore, yhe Chinese currency too is at such a juncture with its value against the Dollar that GM is not making as much profit as expected.
Due to lower sales and increasing competition, the pricing of cars has to be cut down further reducing profits. With times in the automotive market more desperate than ever, GM needs to buckle up for a bumpy ride. GM has to make intelligent investments and come up with strategies to increase sales and get more profit from all its markets and reduce dependency on any particular market. If these measures do not work for the American car company, it will become very difficult for GM to maintain its market share.
Source – The Truth About Cars
