General Motors SWOT Analysis 2024: A Well Researched Report

General Motors dominated the automotive manufacturer and suppliers market worldwide for a long time, 77 years, and is still the biggest automaker in the USA. They have had many competitive advantages in all these years, which we will learn in this general motors swot analysis.

General Motors: Company Overview

General Motors was founded in 1908 in Flint, Michigan, and was initially named the General Motors Corporation of New Jersey and has since grown to become one of the world’s largest automakers. GM has a total revenue of $156.7B and employs over 167,000 globally. The company has manufacturing operations in 30 countries and sells vehicles in over 100 countries worldwide.

Product & Services of General Motors
Automobiles | Luxury vehicles‎ | ‎Commercial Vehicles | Automotive Finance | Vehicle Leasing

General Motors Competitors
Mercedes Benz | BMW | Ford | Honda | Nissan | Audi | Tesla | Maruti Suzuki | Volkswagen | Porsche | Hyundai

Did You Know?

Even though electric vehicles are a new trend, GM was the first automaker to introduce an electric car, the EV1, in 1996.

Strengths – General Motors SWOT Analysis

International Presence: With a global presence through direct and distributor channels, the company sells its vehicles in over 100 countries. According to data, the company sold over 5.9M vehicles globally, with China being its largest market in 2022 and international sales accounting for over 36%, allowing it to access new markets and diversify its revenue streams.

Diversified Portfolio: Under GM’s umbrella, there are over 40 brands like Chevrolet, Buick, GMC, and Cadillac, allowing the company to cater to a wide range of customers and markets. The top and renowned brands contribute almost equally to the company revenue and keep it steady and balanced for further investment and growth.

Effective Manufacturing: In the company’s long history, GM has adopted lean manufacturing principles and just-in-time inventory management, leading to significant efficiency, reduced costs, and quality improvements. As a result, GM’s Lansing Grand River Assembly plant in Michigan was recognized as one of the most efficient car factories worldwide, producing 40% more cars per hour than the industry average.

Steady Finance: GM’s financial stability has allowed the company to invest in r&d and make more strategic acquisitions. The company reported revenue of $156.7B, a 23.4% increase from the previous year, and firm performance, with a net income of $8.915B in 2022 and maintaining a balance sheet with a debt-to-equity ratio of 1.638 in March 2023.

Weaknesses – General Motors SWOT Analysis

Unbalanced Revenue Market: As mentioned before, around 36% of revenue comes from the international market, which means a large portion depends on the American market. As a result, GM heavily relies on the US market, which makes GM vulnerable to any changes in economic conditions or regulatory changes.

Complex Management Structure: When a company has multiple layers of the management team, it leads to slow decision-making and communication challenges, and General Motors is failing to manage this. The company’s complex bureaucracy was one of the primary reasons behind GM’s less effort into EV vehicles and the market.

Low R&D Investment: In the vehicle market, every company is trying to capture the new trends and invest as much as possible and as quickly as possible to capture the market. But, GM’s low investment in R&D limits the company’s ability to innovate and develop new technologies. It spent $9.8B on R&D, especially in the EV sector, in 2022, significantly less than its competitors.

Opportunities – General Motors SWOT Analysis

Diversified Product Line: Investing in new categories like EVs and autonomous vehicles can help GM stay competitive and attract environmentally conscious customers. As a part of the plan, the company announced plans to launch 30 new electric vehicles globally by 2025, including the Cadillac Lyriq and the GMC Hummer EV.

Tech Advancement: People want new features and techs in their vehicles, and GM has an opportunity to continue advancing its technological capabilities, which can help GM differentiate itself from competitors. That’s why the company plans to launch fifty innovative features, including in-vehicle subscriptions, by 2026.

Strategic Investment: Significant investments in acquiring new companies and techs have helped the company make the process more effective and efficient. GM acquired a $2 billion stake in Nikola, a startup focused on developing electric and hydrogen fuel cell vehicles, a few years back. Besides, when they fell behind in the EV race, they partnered with Honda and LG Chem to develop Ev batteries and better energy solutions for electric and autonomous vehicles.

Expansion: General Motors already has brand recognition and can continue expanding its presence in many regions using that. GM announced plans to invest $1 billion in its manufacturing operations in Mexico to support the production of electric vehicles JV with SAIC Motor in China, which has successfully captured a significant market share.

Threats – General Motors SWOT Analysis

Highly Competitive Market: With numerous established and emerging players vying for market share, it’s difficult for GM to compete. As the company’s revenue comes from the US market, it faces competition from companies such as Ford, Toyota, and Honda and newer entrants such as Tesla. Besides China, the most significant international market, the company’s market share has been reduced to 9.8% from 15% in just seven years.

Lawsuits & Strikes: The last decade was a nightmare for the company because of lawsuits and strikes. GM was fined $900 million for failing to disclose a safety defect that led to several deaths and injuries and, recently worker safety case in Canada. The company has also faced a strike by the United Auto Workers union, which lasted for 40 days and resulted in billions of dollars in lost revenue.

Recall Vehicles: Hundreds of recall cases have cost GM billions of dollars in settlements and fines, significantly impacting the company’s reputation and financial performance. In 2022 alone, the company has issued over 825K vehicles for recalls, around 8% of the recall amount US-wide.

Supply Chain Threat: In this world of globalization, every country relies on each other, especially for semiconductor chips. Due to supply chain issues, the world faces a semiconductor shortage, leading companies to reduce production. As a result, GM has been met with reduced production, which hurt the revenue badly.

[Bonus Infographic] SWOT Analysis of General Motors

Recommendations for General Motors

As the automotive industry is changing rapidly, companies should change too and adapt to the market. In the process, here are the things that they should do.

• To capitalize on the growing demand for electric and autonomous vehicles, the company should continue to invest heavily.
• The global semiconductor shortage highlighted the importance of a resilient and diversified supply chain, and GM should continue to strengthen its supply chain to mitigate the risks.
• New techs and features will attract new customers who are always hungry for innovations.
• Strategic investments in acquiring effective and efficient techs and new companies will help the company and give it a competitive edge.

Frequently Asked Questions (FAQs)

Final Words on General Motors SWOT Analysis

With a solid financial position and a diverse product portfolio, General Motors holds one of the world’s most significant automakers positions. While the company has faced challenges such as supply chain disruptions, recall vehicles, and complex org structure, it has also capitalized on opportunities such as the shift towards electric and autonomous vehicles. GM should continue to innovate and expand its presence in developing markets.

References

• Wikipedia contributors. (n.d.). General Motors. Wikipedia.
• GM passes Ford to take No. 2 spot in EV sales behind Tesla. (2023, April 5). AP NEWS.
• Wayland, M. (2022, November 17). GM expects EV profits to be comparable to gas vehicles by 2025, years ahead of schedule. CNBC.
• Vats R., & Klayman B. (2020, September 8). Investors cheer as GM, Nikola join forces to build electric trucks. Reuters.
• Wayland, M. (2021, April 29). GM to invest $1 billion in Mexico for electric vehicle production, angering UAW members. CNBC.
• SAIC-GM open second electric car plant in China. (2023, January 6). Electrive.
• Wayland, M. (2023, March 17). General Motors’ China business is hurting, and it’s not just because of Covid. CNBC.
• Harwell, D. (2015, September 17). Why General Motors’ $900 million fine for a deadly defect is just a slap on the wrist. The Washington Post.
• General Motors recalls over 825K SUVs and cars to fix daytime running lights. (2022, December 14). ClickOnDetroit.