General Motors (GM, Financial) went through some tough times in 2014, facing a number of recalls which turned out to be costly for the American automaker. Investors were obviously not happy as the company had to take billions in recall costs that had a bearing on the earnings. The company incurred $3 billion in fixing the recall problems and compensating recall related victims.
This year the Detroit automaker is looking to make up for last year’s damage and is therefore putting in effort to improve its market share. At the recently held New York International Auto Show, the automaker introduced new models. Daniel Ammann, GM President, claims: You gain market share if you do all the right things for the customers". Let’s have a detailed look at the key launches of the automaker, what are its prospects, and whether it can lift investor mood.
GM focused to make 2015 a stronger year
General Motors is looking to rebuild itself in the US car market after last year’s recall fiasco. In 2014, the company’s sales grew 5% compared with 8% growth recorded by the industry as a whole. However, the positive takeaway is that General Motors managed to sustain its market share close to 18% even in the face of challenges. The company underwent severe changes in the engineering department in order to streamline the process and comply with safety procedures to reduce such recall volumes.
In the auto show, GM displayed several new models. However, the company has put special emphasis on Cadillac and Chevrolet Malibu, which it expects should boost its sales and profits and help maximise its stagnated market share.
The key launches you can’t take your eyes off
The company is quite optimistic regarding the new models displayed at the auto show. GM’s bestselling passenger car, Chevrolet Malibu, will see significant changes from the older one. The all-new 2016 Malibu can turn out to be a game changer, taking on its rivals more effectively and giving them a run for their money.
The plain exterior has been replaced with a fascinating fastback-like shape, something similar to the Impala sedan. The interior has been done pretty well too, and could be considered a class leader when compared with Toyota (TM, Financial) Camry, Ford (F, Financial) Fusion, or Honda (HMC, Financial) Accord. The superior quality leather and metal trim adds to the finish and quality of the sedan. This time, General Motors has given special attention to the rear seat making it more comfortable by providing enough legroom and head space.
General Motors also displayed its long awaited Cadillac CT6 Sedan at the auto show. It almost has all the features one can desire for. The luxury model has a well-trimmed interior that have massaging seats. The fascinating exterior complements the entire look of the car. General Motors has provided robust engines for owners to experience a powerful drive. It’s made the backseat pretty spacious and comfortable for rear passengers. The company has allocated $12 billion to expand the market presence of Cadillac and aims to take it global.
Cross town rival Ford is also keen on capitalizing on the growing luxury market across the globe. While General Motors impressed the industry with the Cadillac CT6, Ford surprised by revealing the new Lincoln Continental concept at the auto show. Ford introduced the Lincoln brand late last year in China and the response was overwhelming. The company plans to produce Continental keeping in mind the preference of Chinese customers. As such the automaker is stressing on rear seat improvement as the wealthy in this Asian country chose sitting at the rear seats while the cars are being driven by hired drivers.
General Motors, on the other hand, isn’t just targeting China. It wants to market the luxury brand globally. The company is trying to improve its brand image in order to compete with its German rivals BMW, Mercedes Benz, and Audi with the aim to improve its market share in the luxury space. This would help bolster General Motors’ bottom line considerably as luxury cars are known for bringing higher margins to its makers compared with mainstream models.
It would be interesting to see how well General Motors is able to recover this year and compensate investors for the lull they witnessed in 2014. The new launches should assist the company gain significant slice of the market and re-establish its position.
