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GM aims to be world’s ‘most valued’ car-maker

Earning it: GM CEO Mary Barra admits the company has work to do in order to “earn customers for life”.

New models, advanced tech, Cadillac and China at core of GM’s latest business plan

General Motors logo2 Oct 2014

By TERRY MARTIN

GENERAL Motors chief executive Mary Barra and her senior management team have detailed an ambitious plan to become the world’s “most valued automotive company” with a major emphasis on product renewals, technology, the Cadillac brand and the Chinese market.

Presenting the strategy to investors and financial analysts at the company’s Milford proving ground in Michigan overnight, Ms Barra acknowledged that GM, which is working to restore public confidence in the wake of a massive ignition switch and recall crisis in North America, had “work to do” and that its focus now “starts from the customer”.

“We understand that we have to earn customers for life,” she said. “We have work to do, and we want to grow our brands so they inspire passion and loyalty.

“We absolutely have to be on the leading edge of transforming breakthrough technologies into not only vehicles but experiences that customers love. We have to be responsible and serve and support the communities in which we live and work.

“And finally, doing all of that to make sure we become the most valued automotive company.”

There was no specific reference to the Australian market, although the closure of its factories here – and the discontinuation of Holden’s locally developed rear-drive vehicle architecture – in 2017 are casualties of its global cutbacks and the development of new flexible global platforms that will use interchangeable components.

Not unlike the ‘One Ford’ strategy and Volkswagen’s modular platforms, GM aims to reduce its vehicle platforms from 14 core architectures in 2015 – which will account for about 75 per cent of its global volume – to just four “vehicle sets” by 2025: one each for front-drive and rear-drive passenger cars, SUVs and pick-up trucks.

Before then, GM expects 38 per cent of its global sales volume in 2016 to come from new or refreshed products – up from 27 per cent in 2015 – while that figure should reach 47 per cent before the decade is out.

Specific details such as the number of vehicles to be launched and sales forecasts have not been disclosed.

During this timeframe, however, GM plans to execute the world’s largest automotive deployment of 4G LTE high-speed mobile broadband, introduce vehicle-to-vehicle connectivity in the 2017 Cadillac CTS and launch an automated driving technology dubbed Super Cruise which allows for “extended periods of hands-free driving on highways”.

The company says it has also developed a “mixed material” body structure combining steel and aluminium, and a new patented welding process, that will reduce vehicle weight, use 20 per cent fewer parts and still have “class-leading” torsional stiffness and “superior” noise and vibration characteristics.

New families of lighter, more compact and fuel-efficient engines are also in the works.

With an eye on the increasing luxury vehicle market worldwide, GM will restructure its flagship Cadillac brand – now overseen by former Infiniti chief Johan de Nysschen – to become a separate business unit based in New York “to pursue growth opportunities in the luxury market with more focus and clarity”.

It plans to introduce four new Cadillac vehicles in North America in 2015, including the recently announced CT6, along with nine new models in China over the next five years.

China is central to GM’s growth strategy, and the world’s largest automotive market will receive no fewer than 60 new or upgraded vehicles from GM and its joint-venture partners between now and 2018, including nine new SUVs.

Around $US14 billion ($A15.9b) will be invested over the same time period by GM’s joint ventures in China, opening up five new manufacturing plants that will support projected sales of just under five million vehicles a year – up from its current annual volume of about 3.5 million.

It plans to have more than 95 per cent of its sales volume in China sourced from domestic plants.

GM is sticking to its previously announced near-term (by 2016) financial targets, which include adjusted profit margins of 10 per cent in North America, maintaining margins of nine to 10 per cent in China and returning to profitability in Europe.

For its international operations outside China, which includes Australia, the company says it “continues to address challenges ... including brand strategy, cost structure and sourcing to return to consistent profitability”.

While GM aims to position Cadillac as a leader in safety and technology, it will also work on improving the image of Chevrolet.

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