GM outlines financial strategies for future growth

GM outlines financial strategies for future growth

Automaker to invest in China, speed product launches in North America.

October 6, 2014

Milford, Michigan –General Motors Co. CEO Mary Barra and her executive leadership team recently outlined the company’s customer-focused strategic plan to become the most valued automotive company at a conference for investors and financial analysts at the company’s Milford Proving Ground.

“In the nine months that this leadership team has been together, we have spent a significant amount of time setting our goals for the future of GM and developing a specific action plan,” Barra said. “Our strategic plan is a pathway to earn customers for life and create significant shareholder value in the process. Every chance to connect with a customer is an opportunity to build a stronger relationship.”

GM’s strategic plan includes several major initiatives that the company anticipates will help it achieve 9% to 10% margins by early next decade.

  • Lead in product and technology: In 2015, about 27% of GM’s global sales volume is expected to come from products new or refreshed within 18 months. That figure is expected to rise to 38% in 2016 and 2017, and reach 47% in 2019.
  • Grow Cadillac: GM is establishing its flagship brand as a separate business unit headquartered in New York City to pursue growth opportunities in the luxury market with more focus and clarity. Cadillac expects to introduce four new vehicles in North America in 2015, including the recently announced CT6. In addition, Cadillac plans to introduce nine new models in the next five years in China, which is expected to become the world’s largest luxury car market later this decade.
  • Continue growing in China: GM’s joint ventures in China are planning to invest $14 billion from 2014 through 2018 to open five new vehicle- manufacturing plants and support sales of just under 5 million vehicles annually. In the same time frame, GM expects to launch 60 new or refreshed vehicles, including nine new sport utility vehicles.
  • Continue growing GM Financial: GM Financial, which has seen its earning assets grow from $8.7 billion in 2010 to $37 billion today, continues to invest to support the sale of new GM cars, trucks, and crossovers around the world. GM Financial has sharply increased the number of GM customers it serves in the United States, Canada, South America and Europe. Later this year, GM Financial expects to enter the growing Chinese market.
  • Deliver core operating efficiencies: GM’s strategy to improve relationships with suppliers, derive more global volume from fewer vehicle architectures, and lower enterprise costs for material and logistics is expected to deliver significantly better variable margins on upcoming high-volume product launches, including the Opel/Vauxhall Corsa and Astra in Europe, and the Chevrolet Cruze and Malibu in North America. By 2020, the company expects that about 99% of global production will be on core architectures.

Source: General Motors Co.