Thursday, 20 October 2016

Quality Analysis: The Giant Motor Industry

The Giant Motor Industry</strong></p>
General Motors has remained to be a giant in the motor industry. The company was founded on 16th September 1908 in Michigan but incorporated on August 11, 2009. The company designs, builds, and sells cars all over the world. Moreover, it provides automotive financing services through General Motors financial services. General Motors sells trucks and cars to fleet customers, leasing companies, rental car companies, and governments. Vehicles sold to fleet customers are done so either directly or through its network of dealers. The motor giant also offers after sale services to its retail and fleet customers such as maintenance, collision repairs, extended service warranties, light repairs, and vehicle accessories. It offers 13 Flex Fuel cars in America for the 2015 model plus other four models to commercial and fleet customers.

General Motors sells its products under Cadillac, Buick, Chevrolet, GMC, Holden, Opel, and Vauxhall brands to customers outside North America. One of the longest continuous use automobile nameplates in production is the Chevrolet Suburban that this paper will aim to focus on. The car is a massive full-size, extended length sports utility car from Chevrolet. It is believed to be the most profitable vehicles for the company dating from 1934 during the 1935 United States model year. The suburban has been manufactured under different Marques including Chevrolet, GMC, and Holden. However, the GMC version was rebranded to GMC Yukon XL just recently. The current suburban is a huge SUV that has three rows of seating, a full pick-up truck frame and has a V8 engine.

Following the recall that faced General Motors, the motor giant is not taking anything to chance in regards to quality. Through the new CEO, Mary Barra quality has been the primary emphasis to avoid another issue based on quality. Therefore, quality in the production of the suburban is a top most priority and means a lot to the motor giant. Due to the quality maintained in its output, the Chevrolet suburban and mostly the 2015 model has ranked 6 out of 13 affordable large SUV's. The ranking has been done out of the analysis of published reviews and the numerous test drives of the Chevrolet Suburban including safety data and reliability. In a bid to improve quality, the 2015 model of the car has a roomy, quiet, luxurious cabin, composed ride that is easy to manoeuvre according to numerous customer reviews. The model is powered by a 5.3-litre V8 engine with a six-speed automatic transmission. It also includes three trim levels including the LS, LTZ, and LT, to improve quality the suburban has been thoroughly redesigned for the 2015 model year.

<strong>Swot Analysis of General Motors</strong>

One of the primary strength of GM is its market leading position in the US and China, the two countries being the two largest automotive markets. In recent years, the company has sold 2.6 million vehicles with an approximate market share of 17.5%. Over the recent past, riding on the strong performance in North America, GM increased its capital expenditures from 6.2 billion-8.1 billion within the year 2011-2012 (Steven, 2013). A reason behind this is the low break-even point in the North-American market and due to the global geographic diversity of its earnings. In the Chinese market, Gm is by far the largest foreign automaker by sales. The company sold 2.6 million vehicles in 2012 alone and enjoys the privilege of offering the broadest line-up of vehicle brands among the numerous automakers in the region. Other major strengths for the company include its branding techniques that have produced stable automobiles and the huge company's worldwide presence.

Despite the enormous success of the motor industry, GM has had several weaknesses in the business world. It's diminishing dealer network is a growing problem for the Company. It has compiled a list that includes more than a thousand dealership market for closure. It announced that it would no longer renew its franchise agreements with one-quarter of its United States dealerships. Another weakness is the insufficient liquidity where there has been a reduction in liquidity from $27.3 billion in 2007 to $14 billion in the financial year 2008. Losses are traced to lower sales volumes and an increased reduction in working capital. Through the decreasing liquidity, research and development, and relationship with suppliers are negatively affected. Other major weaknesses include: inadequate performance among some business segments and low debt ratings.

A primary opportunity that exists for General Motors is the focus on in-car technology. It is highly focused on its broad global strategy of delivering a new generation of connected cars and trucks with the embedded 4G LTE mobile broadband. The move is the largest deployments in the automotive industry and is intended to attract younger tech-savvy buyers. Another opportunity that exists is the growing Chinese and Indian car market. There exist positive projects for GM in both the countries. The Chinese growth rate for new cars is in a 14% growth rate and is considered to be the largest growing global industry by volume of vehicles sold. Industry estimates stipulate that by the year 2020, the Chinese market could reach 30 million units annually from 19 million in 2011. Moreover, the company intends to quadruple its share of China's luxury auto market to 10% by 2020. It plans to launch the new Cadillac models and expand its distribution network. Another opportunity includes the increased global truck market that is projected to rise at a constant rate yearly.

The continuing global recession provides an enormous threat to General Motors. There has been increased economic decline that has in return led to reduced consumer demand for less fuel-efficient vehicles including all full-size pick-up trucks and sport utility vehicles. These products have been GM's most profitable products. The economic climate has also led to tighter credit markets that have made it hard for consumers to finance automobile purchases. Other threats include intense competition from competitors and the general weakness in the global automobile industry.

General Motors uses a range of different quality systems in its operations. However, it has ignored some of these quality systems over the years leading to serious consequences. A Cobalt recall on February Seventh of the year 2014 was one result of this neglect. The primary default with the Cobalt is that, during a crash the airbags failed to deploy (Tanya, 2014). A reason behind this was because there was an error with the ignition switches. The recall proved that GM's culture ought to be changed from the default in the Cobalt had always been known. Both the CEO at that time and all the team involved in production acted unethically and ignored the quality systems that GM ought to follow in the production of its motor vehicles. However, with the appointment of Marry Barra as the CEO, a fresh start has begun at the Motor giant industry (Geoff, 2014).

Following the recall on 2014, there was an enormous failure for General Motors in the quality system measure of fast response. Going in line with the idea of a quick response, the company opted to have immediately addressed the quality failure in the Cobalt. It should have later defined the process to be followed with an aim of correcting the failure. Methods of displaying relevant information as a visual management tool should have also been defined. With the Cobalt, the company ignored the aspect of a fast response. The problem was solved twelve years after it manifested itself.

General Motors has had several alliance strategies just like other automakers that are strengthening alliances with Japanese carmakers to penetrate the Asian markets (Yoshino & U, 1995). GM has purchased several major car components from Japanese car manufacturers. The motor giant acquired 20% equity in Fuji Heavy Industries, 49% shares of Isuzu, and 10% of Suzuki (Nam & Kentaro, 2000). On 29th February 2012 GM and Peugeot Citroen announced the creation of a global strategic Alliance based on two pillars. The components include the sharing of vehicle platforms and the creation of global purchasing joint venture- GM acquired 7% of the total capital of PSA Peugeot Citroen.            In conclusion, despite the past quality issues at GM the conditions are changing following the new leadership and a new culture that does not compromise quality is being formed. The modern customers are also more tech-savvy and therefore GM opts to produce more technology oriented vehicles. Therefore, the company creates vehicles that are embedded with the 4G LTE mobile broadband. The future for GM is quite clear, and the motor giant will remain to be the giant that it has always been.

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<li>C. (2013). General Motors Company. United States of America.</li>
<li>B. (2014, March 31). Timeline: A History of GM' s Ignition Switch Defect. New York, United States of America.</li>
Yoshino, M. Y., & U, S. R. (1995). <em>Strategic Alliances: An Enterpreneurial Approach to Globalization.</em> Harvard Business Press.

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