General Motors Growth Strategy

by : Evander Klum

General Motors' divisions in Latin America, Africa and Middle East are experiencing immense growth which has encouraged the automaker to allot more fund and responsibility to those regions, the Division's Group Vice President reportedly said Tuesday.

Maureen Kempston Darkes said during her visit to Detroit, "These are growing markets and we must take advantage of the opportunity that exists. Critical for our success is to stretch the manufacturing capacity."

General Motors has announced last month its plan of spending $500 million in Brazil to finance the manufacturing of small cars for that country as well as other countries including Argentina and Paraguay. The automaker is also hoping to expand the region's product development center.

The center is designed to take on the responsibility of developing GM's small cars in support of its GM Daewoo operations in Korea. GM will hire 600 engineers for the said expansion, said Kempston Darkes. She also added that the division is also developing opportunities for midsize trucks and considering investing in Columbia and Venezuela.

The General Motors' strategy is to position itself in emerging markets so that the company will grow simultaneously with these economies.

The automaker is still trying hard to restructure its finances in North America and therefore needs to invest in emerging markets in order to keep up with the rest of the other automakers, explained Kempston Darkes. She also said that the automaker is in need of products that would particularly cater to buyers in different markets.

General Motors' division in Latin America, Africa and Middle East has launched 17 new products last year and for this year, the company is again expecting to launch the same number.

And in connection with the growth strategy that GM is implementing it is launching a redesigned Chevrolet Malibu equipped with quality to compete with Toyota's Camry.

However some industry observers are doubtful that GM will be able to convince Americans that a redesigned aging nameplate like the Malibu can topple down the rock-image of the Camry.

Aside from that, Honda -- another strong rival of GM, has also released its own entry in the family sedan market---the Honda Accord. GM's redesigned Chevrolet Malibu would also have to compete with the Accord.

It can be remembered that last year that Honda was able to sell more than 354,000 Accord sedans and coupes. But despite such volume Toyota has remained to be at the top rank with 448,000 units of Camry sold. Last year General Motors sold 163,800 Malibus and 289,000 Impalas.

General Motors will also spend $100 million for the promotion of the new Malibu but still industry observers are doubtful that an expensive ad blitz can turn things for the Malibu.