As the dollar weakens and the American auto market stagnates, GM America’s number one automaker is looking overseas for its future. This year GM made 58 percent of its sales outside the U.S., and since 2004 a majority of GM’s sales have been from foreign markets. The driving force behind this increase isn’t just coming from its weakening home market, however. The nascent markets in developing countries as well as booming growth in China and Russia are fueling GM’s focus outside the U.S.
India and Brazil are two other potentially huge markets for GM, and with the U.S. market on an eight-year decline, the wisdom of focusing on other markets is undeniable. However, that’s not to say that GM is forgetting about the U.S. market altogether. In an effort to keep the losses at home from totally eliminating overseas profits (as they did this year) GM’s CEO Rick Wagoner has instituted a plan to end losses in the North American market, which is now about 50 percent complete, reports Bloomberg. The UAW labor agreement is expected to help cut costs in North America, and improved models like the Malibu and CTS should help to turn the revenue stream around.
Whether GM manages to turn around its U.S. division’s sales and costs, it’s clear that including other markets in GM’s corporate vision are the way of the future. The move could even turn out to directly benefit the home market as the newer, more competitive markets it is entering into could spark new development and bring cars to market that might not come about in a U.S.-centric development paradigm, such as alternative fuels, new form-factors and innovative construction materials. For example, cars made for the Indian market have developed in ways not found in the U.S., with compressed-air power and nearly 100% plastic construction coming soon as well as very low priced cars like the 1-lakh, to be debuted by Tata next week in New Delhi.
Source: GM looking beyond U.S. for future growth
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