General Motors Company (GM): The Most Valuable Auto Company?

In Europe, GM is working on actively restructuring its operations. The company has announced that it will be closing one factory of its long struggling Opel unit. It has also recently hired Volkswagen’s Karl-Thomas Neumann as president of GM Europe and CEO of Opel, to turn things around. GM is planning to return to profitability in Europe by 2015. The company’s Opel/Vauxhall cars rank third in terms of popularity, trailing behind Volkswagen and Ford as computed by the number of units sold by these brands in 2012.

The other area of focus would be to make a comeback in the luxury segment with Cadillac, particularly in China. GM plans to boost its sales there to US levels by 2015, and is working towards this. It is planning to launch a more upscale version of the midsized CTS sedan, and is gaining popularity for its small size ATS sedan.

Will the CEO’s dream come true?

GM is a solid company and deserves a better valuation. So upside is definitely there.  If the company is able to come out with a winning lineup over the next couple of years, and rationalize costs, there is no reason why margins should not increase. However, the company has to first execute its upcoming launches, gain pricing power, and cut losses in Europe before it can expect to achieve the lofty target that the CEO has set. While it sure is a good target to work towards, it looks like GM still has miles to go before becoming the most valuable auto company.

The article GM: The Most Valuable Auto Company? originally appeared on Fool.com and is written by Tina De.

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