General Motors SWOT 2024 | SWOT Analysis of General Motors

Company: General Motors Company
CEO: Mary T. Barra
Founder: William C. Durant
Year founded: September 16, 1908
Headquarters: Detroit, Michigan, United States
Employees (Dec 2019): 164,000
Ticker Symbol: GM
Type: Public
Annual Revenue (FY2019): US$$137.2 Billion
Profit | Net income (FY2019): US$6.7 Billion

Fun Fact: Did you know that GM was involved in the Apollo moon program and they delivered the navigation systems and the inertial guidance for the entire program?

General Motors Company (GM) is one of the oldest, largest, and most influential automakers in the global auto industry. We can learn a lot from analyzing the strengths and weaknesses of GM as well as the opportunities and threats for the company.

Here is the General Motors SWOT Analysis.

Table of Contents

General Motors’ Strengths

Market Dominance: Being the leader and largest auto manufacturer in one of the largest auto market is a major strength. GM is not only the largest auto manufacturer in the US but also the leader in terms of market share with 16.9% in 2019.
Highly Innovative: From electric cars to design and manufacture of combustion engines, GM innovation is attributed to its huge investments in R&D. For instance, the company is poised to become the first deliver million-mile electric vehicle battery to market.
Strong Strategic Partnerships: GM understands that no one can do everything and strives to address its weaknesses by seeking strong strategic partners. From SAIC-GM to GM-CATL and many more, strong partners have contributed to its success.
Safest Cars: Consumers consider safety as the main factors that influence their purchase decision. GM’s brands are the safest cars in the market and it is the only carmaker to receive a five-star safety.
Global Presence: GM operates globally across 6 continents under GM North America, GM China, and GM International that caters to Europe, Middle East, Africa, and Latin America.
Unique Brand Portfolio: GM has some of the most unique brands under its portfolio. From Chevrolet to Buick, Cadillac, Opel, and many more, all these unique brands sets the company apart from the competition.
Excellent Sales Strategy: The higher the sales, the higher the revenues and profits. GM is ranked 12^th in the US and 41^st globally in terms of sales.

General Motors’ Weaknesses

Reliance on SUVs and Pickup Trucks: General Motors relies heavily on SUVs and pickup trucks. In 2019, GM’s car sales decreased by 2.9% with the decline in demand for SUVs and pickup trucks contributing 2% of the decrease.
Negative Publicity: In 2015, it was revealed that GM cheated on the level of emission by its trucks for almost five years from 2011 to 2015, which eroded trust.
Overdependence on U.S. Market: Even though GM operates globally, the company relies heavily on the US market than any other carmaker. With a large portion of its revenue coming from the market, a decrease in sales in the US market can be catastrophic to the bottom line.
Quality Issues: The first and most important rule in auto manufacturing is safety. Even slightest defects and quality issues can lead to death. In 2015, it emerged that GM used defective ignition switches in millions of its vehicles responsible for 124 deaths and 275 injuries.
Lack of Diversification: GM operates primarily in the design and manufacture of automobiles. With all its investments in one sector, a decline of the auto industry will be more damaging to GM than other automakers with diversified portfolios.

General Motors’ Opportunities

Focus on Eco-friendly Options: The number of eco-conscious consumers is increasing globally along with the demand for eco-friendly cars. GM is leading the charge to attain long-lasting batteries for electric cars and is perfectly positioned to exploit the demand.
Strengthen Presence in Emerging Markets: Even though GM operates in Africa and Asia, it has a very small presence and market share. It should focus on strengthening its presence in these emerging markets since they offer higher growth potential.
Exploit Autonomous Market: Demand for self-driving cars is poised to increase in the coming years. GM’s self-driving cruise is one of the players in this space, which offers the company an invaluable opportunity to exploit this market for growth.
Diversify Portfolio: From flexible mobility like car share to the increasing demand for electric bikes, there are several related sectors that GM can engage in to diversify its portfolio

General Motors’ Threats

Global Recession: The pandemic has devastated economies and wiped off millions of jobs with many countries sliding deeper into recession. In the first quarter of 2020, GM’s sales in China dropped by 43.3% year over year. This a glimpse of what is to come.
Trade Tensions: With the trade tension between the US and China still unresolved, GM can become a victim of tit-for-tat tariffs. This is a major threat to GM since it has several auto plants in China and depends on the US market.
Issues with Labor: In 2019, operations in 34 plants were paralyzed by a major strike of 48,000 workers, which cost GM more than $2 billion. If strikes reoccur persistently in the future, profits and sustainability would be strengthened.
Civil Lawsuits: The fines, penalties, and settlements in civil lawsuits can overburden any auto manufacturer regardless of size. GM is still in fighting allegations of selling trucks that were not compatible with diesel usage laws in the US.
Intense Competition: From relentless Toyota to giant Volkswagen, respected Mercedes, luxurious BMW, and the cool electric cars like Tesla, fending off all these competitors is not easy. With so many strong competitors, GM’s market share is always under threat.
Auto Market Slowdown: Regardless of the industry, the profits and existence of all companies in that industry would be threatened in the event of a slowdown of the market. GM’s revenue is declining due to the slowdown of the global auto market.
Stringent Regulations: To counter the ever-increasing threat posed by climate change, countries are imposing stringent emission regulations. Tighter regulations threaten GM’s operations, profit margins, and long-term sustainability.