Cars Blog

In an official statement made by American car manufacturer, General Motors Inc., the company states that they will cut in half the total number of automobile units and power plants used globally. This move by GM is said to be their solution to address their up and down ride in cost and product development problems.

According to the official statement, the number of GM automobile architecture will drop from 30 in 2010 to 14 in 2018. Their engine platforms will take a dive from 20 in 2009 to just 12 in 2018. Their long term goal is to make the engine platform figures to just 10. According to executives from General Motors, the number of unproductive development practices is causing them almost $1 billion annually. This is supported by the claim made by Senior Vice President, Mary Barra who confirmed that they lost almost $1 billion annually because of inefficient production practices and that they’ve been in an up-down cycle when it comes to product investment.

Barra added that the launch dates for the Buick Enclave, the GMC Acadia and the Chevrolet Traverse continue to take a drawback due to fluctuating financial conditions. Having common architectures will help the company take the product lines to the show rooms faster.

The press release also mentioned that the American brand will begin producing Cadillacs in China by the bulk late in 2012. Additionally, GM is will set up another assembly plant in Russia and about four more in China. Lastly, GM is said to be planning to debut about 16 new models in China in the span of five years.

General Motors Co. has included the standard warnings for present and future investors in its 734-page filing to go public.  This includes the many risks that GM faces in the industry like the stability of its supply base, weak sales figures, and changes in regulations to name a few.  Of course, the risks that GM has disclosed almost paint the picture that the American automaker might just face bankruptcy in a year’s time.

The 734-page file also includes the state in which senior management is being paid an uncompetitive salary because of the limitations that comes from the government’s aid to the GM.  There is also the matter of unhealthy financial controls inside the company the negative effects of GM’s deflating dealer body to its market share and sales in the U.S.

According to GM, the sales and market share will suffer when they decide to let go of several brands and cut down their U.S. dealer network.  In 2009, there were approximately 5,600 GM dealers in the U.S.  In June 2010, the figure goes down to 5,200.  The initial plan was to cut down the dealerships by 3,600 to 4,000 in the long run that in 2009, the automaker has ended their franchise deals with over 2,000 dealers. But the new federal law urged GM to revive at least 700 of these terminated dealerships while some were restored through government mandated negotiations.  GM now plans to cut their US dealers to around 4,500 towards the end of this year.

Koenigsegg Group and General Motors have reached the final table deal with regard to the fate of the Saab. After twenty years of American ownership, Swedish supercar maker Koenigsegg will have 100% control over the Saab brand.

The deal will be concluded after a few months and the Saab brand will know what lies ahead. Koenigsegg and GM will be handling necessary legal re-organization and discuss some closing conditions.

General Motors is expected to give transitional assistance for the operation of Saab. The Swedish government has also promised to inject some funding to the turnover.

For a certain time frame, Koenigsegg and GM will be sharing their services and technology guided by set agreements. The Swedish car maker plans to put into effect some solutions to revive Saab but it is a big job to prove for a company with only 50 employees that sell a number of $1 million cars annually.

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February of 2009 has been a major headache for the top six car manufacturers in US. Sales sank for more than 37 percent, and it is the worst ever, since December of 1981.

To note, General Motors had the biggest decline among the giant car companies with 53.1 percent, Ford Motor with 49.5 percent decline and Chrysler who slide down 44.0 percent. Toyota sales also sank with 39.8 percent, while Honda and Nissan with 37 percent.

A sad but true fact, US monthly sales still failed to rise, since October 2007, along with the 15-month global economic recession. For three consecutive months, the year-over-year decline was 0.7 percent. As for the month of February, consumer’ confidence decreased due to the impact of the economic recession.

Despite car manufacturers’ efforts to boost their car sales by incentive spending by 15.9 percent, still, the industry suffers decline in sales. Last February, Ford was traumatized with the collapse of its bestseller vehicle, the F-series pick-up, with only 23,614 trucks purchased, a dramatic decrease of 55.1 percent from a year earlier.

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