GM wants to miss some sales in the name of profits

Article by Christian Andrei, on August 26, 2010

Apparently, General Motors Co. is prioritizing profit over sales as it raises the output from its existing plants rather than restarting idle plants. GM does this despite signs that the economy will recover this year and that GM's forecast could be exceeded. Dealers are also coping with the fact that it doesn't have as many ready-to-sell vehicles in their lots.

GM used to keep factories operating at all costs. GM has seen the advantages of having lean inventories. 

These include low incentives; better brand values; and annual profits. Mike DiGiovanni, GM's top sales analyst, said that in the short-term, the tighter alignment of production and demand could cost a few sales but that eventually, it will build the brands.

By doing so, the residual values will go up, people will pay more for the cars and this will also enhance the image of the brand, making it gain more market share.

To cope with demand while at the same time keeping costs to a minimum, GM will by spring have five of its 16 operational North American plants working at more than a 100% capacity with two standard shifts, five days per week. [via autonews]

Topics: gm, profit

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Retired Formula 1 driver Jenson Button has just received his brand new McLaren MSO 675LT Spider. This was confirmed after McLaren Beverly Hills posted a picture on its official Instagram...
by - January 24, 2017
Ford and Toyota have come together in the hopes of standardizing their vehicles’ smartphone integration system. The open-source platform is said to compete with Google Android Auto and Apple CarPlay...
by - January 24, 2017
The race to autonomous driving has been dictated by the need to make the road safer and reduce the incidents of vehicle crashes. Several major carmakers in the world have...
by - January 24, 2017
The Shooting Brake is probably the least rendered body shape in the automotive world. But it’s also the most sought after design among car nuts for its unique, old-fashioned charm....
by - January 23, 2017
Perhaps to make the upcoming Valentine’s day more special, Tinder dating app and Ford UK have cooked up a special blind date for all the single blokes and chicks in...
by - January 23, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries