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General Motors - the Global Business Environment

Essay by review  •  February 12, 2011  •  Case Study  •  401 Words (2 Pages)  •  803 Views

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General Motors:

The Global Business Environment

By: Daniel Feichtner

General Motors and China have had an ongoing relationship since the Gm Manila branch moved to Shanghai in 1922. Then, in 1930 General Motors China was established basing their headquarters out of Shanghai. Because of this long lasting relationship, every year the motor vehicle industry increases in China and across the world. In 2003, Gm China sold 386,710 vehicles in China. By the end of 2003, China became the 3rd largest auto market in the world. It is very apparent that Gm and China have been growing since 1922. Now, "GM has approximately 13,000 employees in China and operates seven joint ventures and two wholly owned foreign enterprises." (General Motors, 2006)

In January 1997 Shanghai Automotive Industry Corp Group and GM merge together in hopes of one day creating the largest automotive industry in the world. "Together, the two carmakers invested heavily in factories, introduced a broad lineup...and set up dealerships." (Tierney, 2005)

Between 1994 and 2004 China's auto market grew to 5.3 million vehicles sales per year. Since 1999, Shanghai Gm has released a new model for the GM China showroom at the end of the production year. It does seem that when Gm jumped at the opportunity to merge with SAIC, they really did themselves a favor. Since the merger, "China has contributed $1 billion to GM's earnings." (Tierney, 2005)

Now GM is the world's largest automotive company, making vehicles in over 32 countries. This now "...gives the world's largest automaker about 11.2 percent of the Chinese market, up from 9.4 percent in 2003." (Chinadaily.com, 2006) "GM, which invested almost $2 billion in China since 1997, last year announced $3 billion of additional funds to double production in the country by 2007 while reducing output in the United States and in Europe." (ChinaDaily.com, 2006)

The $192.6 billion in total revenue clearly shows that Gm is on the rise and will continue to stay at the top of the Fortune 500 list. "GM sold 178,256 vehicles in China during the first four months of this year...." (ChinaDaily.com, 2006) Because China has been such a large factor in the automotive industry, Gm will continue to rise.

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