General Motors Company (GM) Looks to Russia for Increased Sales

In early March, Bloomberg reported that General Motor’s lead over Toyota in China widened by 7.9% with respect to sales gains. This is something that I would seriously consider. China is one of the largest car markets, and like Russia, it has a huge middle class population that views car ownership as a status symbol. If General Motors can beat Toyota, an Asian company, in China, it can certainly do a lot more in Russia. Meanwhile, Toyota is considering the possibility of temporarily suspending the construction of new factories and rather focus on investing in those that are already in operation. As part of its strategy, Toyota Motor (NYSE:TM) plans to suspend plans for the construction of new plants beyond those already announced. This year, the company expects to complete its two new factories in Thailand and Indonesia.

Ford’s Fusion Energi, a new plug-in hybrid Ford was declared the “Connected Car of 2013” during the Consumer Electronics Show of 2013 in Las Vegas, USA. The automaker ensures that the new Fusion offers the most advanced connectivity and driver assistance systems in the segment of luxury sedans. The plug-in hybrid version is equipped with the SYNC connectivity system of last generation and with the MyFord Mobile app for smartphones.

2012 saw an outstanding performance by Renault, which is among the automotive brands that were spotlighted in Brazil in recent years. For the third consecutive year, the company registered above-market growth and spawned more than 241,000 units, representing an increase of 24.3% over 2011, compared to a market that grew 6.1%. During the year, the market share was 6.65% vs. 5.67% in 2011.

Volkswagen intends to end its partnership with Daimler AG since Volkswagen seeks to develop closer ties with the subsidiary of MAN SE trucks. Volkswagen began developing a new model of the utility Crafter, which has been produced by Daimler under a collaboration agreement that expires in 2016.

Conclusion

General Motors Company (NYSE:GM) has a market cap of $46.93 billion and an enterprise value of $31.66 billion. Its profit margin is relatively low at 3.79%, but it has a huge revenue of $150 billion. The investments that are being made in Russia are vital to General Motors’ growth. With the crisis in developed countries, the solution seems to be to invest in emerging markets like Brazil, Russia and China. Of these three countries, Russia places a lot of importance on car ownership. This will provide immunity to General Motors even if the country’s economy is not in a very good shape. I anticipate Russians will continue to buy their favorite GM cars, and revenue will continue to rise.

The article General Motors Looks to Russia for Increased Sales originally appeared on Fool.com and is written by Maxwell Fisher.

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