GM has filed for bankruptcy, A lesson to what Indian car manufacturers can avoid doing?
What went wrong with GM?
The company just hoped that it would be able to live forever on its brand loyalty. It felt that people would just keep on buying their same cars even when things all around GM were changing rapidly. Losing sight of what people actually wanted led to this end of an era.
People wanted a car which would give them better mileage and this important indicator, of having more fuel efficient cars was also missed by GM. This is where Toyota gained and GM started losing out.
The designs of GM just simply did not appeal. GM did keep up with new models but with competition from the likes of Honda and Toyota, churning out swanky and better looking cars, the new models of GM just did not find favour. Its Aveo model was a complete failure and its Cobalt, though was doing well was no match for Toyota’s Corolla and Honda’s Civic.
The economic turbulence and then the fall in demand also just added on to the already brimming cup of woes.
Labour cost was almost $2,360 per car, which was $800 more than Ford's and $500 more than Chrysler's.
The biggest lesson for all car makers from this fall of GM – always listen to the dealers. The showrooms are the true indicators of what customers actually want. GM failed to do that.
GM ran the company the in the same way for 70 years, following the same rules laid down in the memo by its founder. Also the arrogance of success was so high, they just failed to adapt to fundamental changes in the industry.
By the time GM realised its follies and started making amends, it was too late and too little. Till then the Japanese had stolen away a considerable market share and the same brand loyalty which GM was harping on about, was now pass. thanks
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