Group 3 General Motors

7/31/2019 Group 3 General Motors

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GROUP 3 GENERAL MOTORS

Vision Be the automotive industry leader in

innovation

Values

Leadership

Intergrity Respect

Sustainable Development

Brands

Astra

Insignia

Meriva


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Strengths:

- Good market reputation

- Global distribution

- Quality improvement by strong R&D

Weaknesses:

- Unproductive labours

- Heavy technology investment

- Poor organizational structure

- High marketing expenses

Opportunities:

- Government support- Low interest rate

- Develop new vehicle styles and models

- Change in marketing trends (more social media)

- Change in consumers needs (more green)

- Increasing demand for Astra

Threats:

- Increasing in inflation rate (3.7% to 4% & more)

- Rising fuel prices

- Growth of competitors

- Decreasing demand for cars (14,3M to 12.8M)

SWOT ANALYSIS


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Reduce production

units of each brandto cut inventory cost

Choose the rightmodel for right

market based oncustomers trends

Decrease marketingexpenses by more

efficient channels,then to gaincustomers loyalty

Restructure the

organization bybuying moreautomations to

reduce manpower

Sell one oldest

factory to earn cashto reinvest in

current activities

Focusing on training

for employees toenhanceproductivity andservice delivery

SHORT-TERM ACTIONS


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Continuouslyrestructure the

organization to put

more superior oneach brands

Be more local to gainshares on niche

market

Cut production costand other marketing

expenses to paydebts

Spending moreefforts on market

research to deeplyunderstand the

market andconsumers

Upgrade currentbrands in term ofgreen automotive

and fuel cost-saving

LONG-TERM ACTIONS


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Product portfolio: Astra, Insignia, Meriva

Market segment: Astra 2.92%, Insignia 2.62 %, Meriva 1,5%

Operations:

Personnel: cut down 1.500 employees to reduce 44M cost

Automation: purchase more 350 units with the price

Factory: shut down the oldest one and sell it

Training: reduce 50 % training expenses


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Brand marketing expenses: focus more on digital marketing andmarket research, but reducing cost on traditional channels

Spending marketing cost at 250M per year

Gross Profit: 181 M


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Number of automationpurchased 150.00 Number of automationpurchased 200.00Price 665,600.00 Price 665,600.00Total 99,840,000.00 Total 133,120,000.00Cost per year ofdepreciation 9,984,000.00 Cost per year of depreciation 13,312,000.00

Automation overheads 4,992,000.00 Automation overheads 6,656,000.00Total cost 14,976,000.00 Total cost per year 19,968,000.00

Pay back to employer 9,630,000.00Cost for first year 24,606,000.00

Number of employersfired 1,500.00 Number of employers fired 2,000.00total wage per year 40,125,000.00 total wage per year 53,500,000.00Organizational overheads 4,012,500.00 Organizational overheads 5,350,000.00Total cost per year 44,137,500.00 Total cost per year 58,850,000.00


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ActionCurrent costper year (Euro) Cut down to(Euro) Save per year (Euro)

Cut down 1500 employees and invest150 automation units 44,137,500 14,976,000 29,161,500

Invest 200 automations units equal to2000 employees needed for Meriva'sproduction 58,000,000 19,968,000 38,032,000

Cutdown marketing and promotion 355,000,000 250,000,000 105,000,000

Total 172,193,500

Action unit Grossmargin Price Revenue Cross profit Materialcost Design &options cost Overhead labour cost Profit

manufacturing Meria focus to City carsegment with price 69,312 13%15,500 1,074,336,000 139,663,680 590,884,800 202,869,274.29 44,316,360.0 54,479,232.0 181,786,333.71


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Group 3 General Motors

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