Having observed the slow-motion car crash that was General Motor’s collapse into bankruptcy in June 2009, it is quite incredible to read the news that it appears to have regained its spot as the world’s biggest car-company.
GM has released figures that it sold 9.03m cars in 2011, exceeding VW’s 8.16m and most likely Toyota’s figure. The Japanese company hasn’t yet released full-year results, but a figure around 7.5 to 8.0 seems likely on the basis of the first nine months of 2011.
What’s so amazing is that a car company can recover from years of decline, a constantly eroding market share and finally a crash into bankruptcy and two and a half years later get back on top. Possibly this feat is only achievable by an American company, operating in the world's most open market, and driven by the ultimate desire to survive.
Also significant is that GM is now making profits — about $6b in 2010 and north of $8.5b in 2011. Previously when it was the world’s biggest car-maker it achieved volume at the expense of profitability, rightly bringing constant criticism from the finance world.
I also think this recovery is great news for the European operation and Vauxhall.
Firstly, the noises coming out of Detroit earlier this month suggest that the US wants to keep Opel and Vauxhall. Now that GM is number one again, surely it doesn’t make sense to throw away volume from Europe?
Although in reality it’s vital to hold on to Europe for more fundamental reasons – engineering expertise.
GM is now reaping the benefits of the work that Bob Lutz and Rick Wagoner did to overhaul and globalise GM’s engineering operations. They may have got plenty else wrong, but thanks to those two, GM is now in the right position to create more well-engineered and attractively-styled cars than at anytime, than the late 1960s. Remember that much of that engineering work was entrusted to European engineers, which is now underpinning cars that American and Chinese buyers want, proven by good sales in both those regions.
Incidentally the Chinese and US markets are now equally important to GM, each accounting for 2.5m units.