General Motors Company TABLE OF CONTENTS

COMPANY PROFILE

General MotorsCompany

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TABLE OF CONTENTS

Company Overview..............................................................................................3

Key Facts...............................................................................................................3

SWOT Analysis.....................................................................................................4

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General Motors CompanyTABLE OF CONTENTS

COMPANY OVERVIEW

General Motors Company (GM or "the company") is engaged in the development, production andmarketing of cars, trucks and automobile parts. The company also provides automotive financingservices.The company operates globally with major presence in North America, Europe, and SouthAmerica. It is headquartered in Detroit, Michigan and employed about 213,000 people as of December31, 2012.

The company recorded revenues of $152,256 million during the financial year ended December2012 (FY2012), an increase of 1.3% over FY2011. The operating loss of the company was $30,363million during FY2012, as compared to an operating profit of $5,656 million in FY2011.The net profitwas $4,859 million in FY2012, a decrease of 35.9% as compared to FY2011.

KEY FACTS

General Motors CompanyHead Office300 Renaissance CenterDetroitMichigan 48265 3000USA

1 313 556 5000Phone

Fax

http://www.gm.comWeb Address

152,256.0Revenue / turnover(USD Mn)

DecemberFinancial Year End

213,000Employees

GMNew York Ticker


General Motors CompanyCompany Overview

SWOT ANALYSIS

General Motors (GM) is engaged in the development, production and marketing of cars, trucks andautomobile parts.The company derives significant competitive advantage by having a strong positionin two of the world’s largest auto market the US and China. Its major presence in these two marketssupports in delivering sustainable business growth which helps GM to further consolidate its globalmarket leadership. However, intense competition in the marketplace could result in lower salesvolume as well as margins for GM and may result in declining market share.

WeaknessesStrengths

Low profitabilityStrong positions in the US and ChinaUnderfunded pension obligationsRobust technological capabilities

ThreatsOpportunities

Intense competition and declining marketshare

Intense focus on in-car technologyGrowing Chinese automotive market

Stringent government laws and regulationsWeak European economic situation

Strengths

Strong positions in the US and China

GM’s major strengths are its market leading positions in the US and China, the world’s two largestautomotive markets.The company’s business is diversified across products and geographic markets.With one of the strong product line-up in the industry, GM, its subsidiaries and joint venture entitiessell vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden, Isuzu, Jiefang, Opel,Vauxhall and Wuling brands.

In North America, GM manufacturers and markets the following brands: Buick, Cadillac, Chevroletand GMC. In the US, the company sold 2.6 million vehicles, with market share of around 17.5%. Inrecent years, riding on the strong performance in North America, GM increased its capital expendituresfrom $6.2 billion in 2011 to $8.1 billion in 2012, mainly due to its low break-even point in NorthAmerican market as well as its global geographic diversity of its earnings.

In the emerging and growing Chinese market, GM is the largest foreign auto maker by sales. Thecompany and its joint venture partners sold a record 2.8 million vehicles in 2012 in China. GM andits joint ventures offer one the broadest lineup of vehicles and brands among automakers in theregion. GM operates through 12 joint ventures and two wholly-owned foreign enterprises in Chinese


General Motors CompanySWOT Analysis

territory. The company sells passenger cars and commercial vehicles under the brands Baojun,Buick, Cadillac, Chevrolet, Jiefang, Opel and Wuling. Currently, the company has more than 4,200dealerships in China and is rapidly expanding in the country’s growing central and western cities.In addition, GM has significant presence in the Chinese luxury auto market through its Cadillac brandwhich has dealer network spread across 150 locations in the country.

Hence, GM derives significant competitive advantage by having a strong position in two of the world’slargest auto market the US and China. Its major presence in these two markets supports in deliveringsustainable business growth which helps GM to further consolidate its global market leadership.

Robust technological capabilities

GM has strong product designing and development capabilities. The company spent approximately$7.4 billion on the research and development (R&D) activities in 2012. It is focused on developingnew products and services, improving existing products and services, including activities related tovehicle emissions control, improved fuel economy and the safety of drivers and passengers.

For instance, GM’s Buick is the only brand in the industry to offer forward collision alert, lane departurewarning, rear cross traffic alert, side blind zone warning, and a rear vision camera on every vehicle.Furthermore, GM received more US patents in 2012 than any other automaker.These patents werepart of its focus on the advances in performance, efficiency, sustainability and in-vehicle infotainment.The company’s OnStar delivers range of capabilities from stolen vehicle assistance to voice navigationand live advisor support.

In September 2012, General Motors Research and Development invented an industry-first aluminumwelding technology which is expected to enable more use of the lightweight metal on future vehicles,which can help improve fuel economy and driving performance. Furthermore, currently, GM Chinais fabricating and testing prototype battery cells and complete systems at its Advanced TechnicalCenter in Shanghai, enabling GM researchers and engineers to gain critical knowledge in thedevelopment of next-generation vehicle battery systems.

Hence, in a rapidly evolving auto industry, GM’s strong technological capabilities lead to productdurability which in turn enhances its customer retention rates, and drives profitability.

Weaknesses

Low profitability

Although, GM is witnessing improved top-line performance every year since the Great Recession,its bottom-line results have been uncertain and consistently under pressure. In terms of the overallbusiness performance, GM operates through very thin profit margins. For instance, in the Fortune500 list, GM was ranked at fifth position in terms of its revenue, but was ranked 20th at profitability.The operating loss of the company was $30,363 million during FY2012, as compared to an operating



profit of $5,656 million in FY2011. Furthermore, in the first quarter of 2013, the company reporteda 14% fall in net profits.

As compared to peers, the company’s performance substantially falls behind. For instance, Ford,GM’s main rival and the second largest automaker in the US, scores above GM in the profitabilitymetrics. In the first quarter of 2013, Ford earned an average of $3,200 in pretax profit on each ofthe 761,000 vehicles it sold in North America, while GM earned about $1,700 on the 829,000 carsand trucks it sold in the region.

Though, GM is continuously improving its accounting and regional framework to focus on moreprofitable vehicles and markets, the sustained losses in its major markets could affect its ability totake advantage of the opportunities arising in the market place. In addition, it could result in declinein GM’s market share as well as increased cost of borrowing with stricter covenants.

Underfunded pension obligations

GM has significant underfunded pension obligations. The company provides benefit pension plansfor most of its employees. GM's pension plans in the US were underfunded by $14.0 billion and$14.2 billion in FY2012 and FY2011, respectively. The company's non-US pension plans wereunderfunded by $13.8 billion and $11.2 billion in FY2012 and FY2011, respectively. The fundedstatus was declined due to adverse equity and credit markets, which reduced the market value ofplanned assets.

The pension funding obligations could increase significantly due to a reduction in funded status asa result of a variety of factors, including weak performance of financial markets, declining interestrates, investment decisions that do not achieve adequate returns, and investment risk inherent inthe company's investment portfolio. Moreover, if the total values of the assets held by GM's pensionplans decline and/or the returns on such assets underperform its return assumptions, the pensionexpenses would generally increase and could materially adversely impact the company's financialposition.

Opportunities

Intense focus on in-car technology

GM is highly focused on its broad global strategy to deliver a new generation of connected cars andtrucks with embedded 4G LTE (long-term evolution) mobile broadband, which is also one of thelargest deployments in the automotive industry.

GM aims to attract younger, tech-savvy buyers through innovative in-car technologies. Severalstudies have found that more than two-thirds of new car buyers own a smartphone, and for 82% ofthem connectivity strongly influences which car they buy. Moreover, the average US consumer isspending more than 2-1/2 hours a day on their smartphones and tablets.To capitalize on the emerging



trend, GM teamed up with AT&T to sell vehicles embedded with 4G LTE mobile broadband, a wirelessconnection that allows for faster flow of data that would allow passengers in the backseat to watchstreaming video. Over time, the application of widespread in-vehicle 4G LTE connectivity wouldenable vehicles to interact directly with their environment to enhance safety, efficiency andconvenience for drivers and passengers.

Also, both the companies would work together on a broad ecosystem focused on developing newcommunication applications to enhance the driving and riding experience. In addition, recently, GMintroduced a new set of vehicle application programming interfaces (APIs), which enable developersto build on GM vehicles’ infotainment systems, as well as a new flexible application framework thatwill allow drivers to add apps and infotainment features to their vehicles after purchase. The built-in4G LTE structure is specifically designed for in-vehicle use as it is integrated into the vehicle’selectrical system.

Hence, an increased focus on in-car technology could enable GM to generate new sources of revenueand enhance profit margins as well as competitive advantage.

Growing Chinese automotive market

The Chinese automotive industry, the fastest growing global industry by volume of vehicles sold, isimportant to GM’s global growth strategy. Currently, the company employs a multi-brand strategyled by its Buick and Chevrolet brands for Chinese market. According to industry estimates, by 2020,the market in China could reach 30 million units annually, up from about 19 million in 2011.Furthermore, the company aims to quadruple its share of China's luxury auto market to 10% by 2020as its plans to launch new Cadillac models and expand its distribution network in the world's largestcar market.

To capitalize on the growing Chinese auto market, the company plans to introduce more than 10new or upgraded products in China on average each year through 2016. In addition, Shanghai GMopened a new plant in Yantai, Shandong, and broke ground for its fourth manufacturing base inWuhan, Hubei. Similarly, SAIC-GM-Wuling opened a new passenger car production facility near itsheadquarters in Liuzhou, Guangxi, and announced plans to build a third production base in ChongqingMunicipality.

Moreover, GM’s Pan Asia Technical Automotive Center (PATAC) joint venture opened a climaticwind tunnel in Shanghai, and together with PATAC, SAIC and Shanghai GM, the company openedone of the largest automotive proving grounds in the country in Guangde, Anhui.

As part of its China growth strategy GM operates through a number of joint ventures affiliated withthe Chinese government. In addition, the company offers one of the broadest product line-up ofautomobiles in the country. Hence, GM can leverage its strong position in the Chinese automotivemarket to further drive its sales volume and expand its market share.

Threats



Intense competition and declining market share

The global automotive industry is highly competitive which has affected GM in the recent past. Thecompany’s global market share fell to 11.5% at the end of 2012, down from 11.9% in 2011. Theweak vehicle sales volumes in FY2012 was a reflection of an intensified competitive environmentin the US, including aggressive competitor pricing and media spending, as well as key competitor’snew product launches. Furthermore, the company's US market share also fell to 17.5% at the endof 2012 which is its lowest level in decades and down from 19.2% a year earlier.

The principal competitive factors include price, quality, available options, style, safety, reliability, fueleconomy and functionality. GM faces strong completion from companies such as Volvo, BayerischeMotoren Werke (BMW), Daimler, Fiat Group Automobiles, Ford Motor, Honda Motor, Hyundai Motor,Mazda Motor, Nissan Motor, Renault, Toyota Motor and Volkswagen. Furthermore, due to the currenteconomic conditions, demand for automobiles has fallen sharply, both in North America and in otherparts of the world.

To offset these high fixed costs, some of the company's competitors have responded to recentdeteriorations in economic conditions and vehicle sales by attempting to sell more vehicles by addingvehicle enhancements, providing subsidized financing or leasing programs. Hence, intense competitionin the marketplace could result in lower sales volume as well as margins for GM and may result indeclining market share.

Stringent government laws and regulations

GM is subject to laws and regulations that requires control automotive emissions, including vehicleexhaust emission standards, vehicle evaporative emission standards and onboard diagnostic system(OBD) requirements. Advanced OBD systems are used to identify and diagnose problems withemission control systems. Problems detected by the OBD system may increase warranty costs andthe chance for recall. Emission and OBD requirements become more challenging each year asvehicles must meet lower emission standards and new diagnostics are required and will continueto become even more stringent throughout the world.

The US government and various state governments imposes stringent emission control requirementsincluding preproduction testing of vehicles, testing of vehicles after assembly, the imposition ofemission defect and performance warranties and the obligation to recall and repair vehicles that donot comply with emissions requirements. The company must obtain certification that the vehicleswill meet emission requirements from the United States Environmental Protection Agency (EPA)before selling vehicles in the US and Canada and from the California Air Resources Board (CARB)before selling vehicles in California and other states. CARB has proposed more stringent exhaustemission and evaporative emission standards, which is expected to phase in with the 2015. TheEPA is also developing similar requirements which are expected to phase in with the 2017.

In Europe, emissions are regulated by two different entities: the European Commission (EC) andthe United Nations Economic Commission for Europe (UN ECE).The regulatory requirements includerandom testing of newly assembled vehicles and a manufacturer inuse surveillance program. A new



level of exhaust emission standards for cars and lightduty trucks, Euro 5 standards, was applied in2009, while stricter Euro 6 standards will apply beginning in 2014. The new European emissionstandards focus particularly on reducing emissions from diesel vehicles. The new requirements willrequire additional technologies and further increase the cost of diesel engines, which currently costmore than gasoline engines.

Thus, if the company is found violating the applicable laws or regulations, it will be subject tosubstantial fines or penalties including civil and criminal liability. Any such unforeseen incidents mayadversely distress the financials of the company.

Weak European economic situation

The current situation relating to the weak economic recovery in Europe could moderately impactGM’s businesses. The demand for the company’s products and services tends to be cyclical andcan be significantly reduced in an economic environment characterized by lower consumer spending,lower corporate earnings and lower levels of government and business investment.

The Euro region’s six-quarter recession, the longest since the common currency was introduced in1999, deepened in the first three months of 2013 as investment and exports plunged. According toThe International Monetary Fund (IMF), the 17-country Eurozone is expected to shrink 0.3%,compared with a 0.2% retreat in its January 2013 report, with France joining Spain and Italy incontracting. Furthermore, as per European Automobile Manufacturers’ Association (ACEA), Europeancar sales fell to a 20-year low in May 2013 as record joblessness caused by a recession in Eurozonereduced demand at companies such as GM, PSA Peugeot Citroen, Renault, Fiat, among others.The registrations dropped 5.9% to 1.08 million vehicles from 1.15 million in 2012. The figure wasthe lowest for the month (May) since 1993.

In addition, auto-industry executives forecast that the European car market is expected to shrink asixth consecutive year in 2013, with a possible recovery starting by the final quarter. Moreover,Western Europe’s market is projected shrink to about 12.5 million vehicles in 2014, a 29.5% declinefrom the pre- crisis peak of 16.8 million units, and may stagnate at that level for the foreseeablefuture. Hence, the ongoing weak economic environment in Europe could result in lower sales volumefor GM which may pressurize its financial position.



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General Motors Company TABLE OF CONTENTS