Gm History

The situation Once the largest car maker in the US, GM has more recently suffered several problems. General Motors (GM) was established in 1908 by a horse-drawn coach manufacturer diversifying into automobiles. At the time, according to GM the entire automobile fleet in the US was around 8,000 vehicles. 100 years later, Department of Transport statistics revealed that there were 256 million vehicles on US roads, a compound annual growth rate of 11%. GM played a central role in the rise of the automobile during the 20th century, but by the start of the 21st century the company was clearly in difficulty, posting several years of large net losses. During the mid-20th century, GM was the colossus of US car makers. While Ford dominated the market in the 1920s, by the 1940s it had been overtaken by GM, which held around 44% of light vehicle sales. In the 1950s and 1960s, GM’s share increased to almost 50%. As late as the 1990s, it was the leading company in the US light vehicle market. Fig. 1 Evolution of GM’s share of the US market, 1920–2010 However, its relative position had started to be undermined as early as the 1970s, with its market share falling quite consistently. By 2010, it held just 19%. The main reason for this was not competition from its main US rivals, Ford and Chrysler, as over 1990–2004, at least, their own shares of the light vehicle market were declining. Rather, it was new entrants from Asia, notably Toyota, Nissan, and Hyundai, which were seizing market share from the US-based auto companies.

Fig. 2 GM revenue and net income/loss, 1998–2011 Despite the encroachment of foreign competitors on market share, GM was able to report annual revenue growth in most years. Even the turn-of-the-century US recession, which led to a significant revenue decline in 2002, did not have a long-term impact, with GM’s sales recovering in 2003. The figure number 2 shows these trends.

GM’s product lineup is diverse. However, in comparison to the rest of the US...