At a presentation at the New York Auto Show earlier this week, General Motors announced that it will redesign, refresh, or replace roughly 90 percent of its vehicles in the North American market between 2013 and 2016 — officially announcing a product onslaught expected by many a General Motors enthusiast for quite some time.
One of the reasons behind the faster-than-usual vehicle update cycle is GM’s ability to double its rate of bringing product improvements to market during the 2013-2016 three-year timeframe versus the 2009-2012 timeframe, explained GM North America Chief Financial Officer Chuck Stevens.
The product offensive commences in 2013, when 39 percent of GM’s North American offerings refreshed, redesigned, or replaced, starting with the following vehicles:
- 2014 Chevrolet Silverado
- 2014 Chevrolet SS Performance Sedan
- 2014 Chevrolet Corvette
- 2014 Chevrolet Impala
- 2014 Chevrolet Camaro
- 2014 Cadillac CTS
- 2014 GMC Sierra
- 2014 Buick Regal
- 2014 Buck LaCrosse
While plans for 2015 weren’t discussed, GM did say that 2016 will bring 89 percent new or redesigned products.
GM’s presentation also touched upon its financial strategy, including the intent to cut non-production costs by six percent. A large part of the way in which that plan will be achieved is the reduction of information technology costs. The automaker is embarking on an about-turn of its IT efforts by bringing 90 percent of IT work in-house and simplifying the high-tech operations by removing duplicate or overlapping databases and applications. In the past, General Motors outsourced 90 percent of its IT needs, which resulted in a bloated and ineffective IT architecture. The in-housing strategy will see GM hire several thousand IT workers in the United States, and will allow the automaker to become more nimble and effective technologically, while bringing secondary benefits in the form of reducing costs.
And as we mentioned earlier this week, GM is looking to increase its profit margin in North America from 7.4 percent (an average over 2009-2012) to 10 percent by mid-decade. The plan is part of a larger objective spearheaded by General Motors CEO Dan Akerson to increase GM’s profit margins globally. Given the timeline for GM’s plan to boost profitability in North America, it doesn’t seem that the company’s profits will change that much in 2013, and GM communicated the same earlier this year.
However, GM’s highly-profitable North American unit should see an increase in second-quarter profit thanks to the market launches of the all-new and highly-profitable 2014 Chevy Silverado and GMC Sierra pickup trucks. The timing for the sales launch couldn’t be much better, as the vehicles will arrive at a time when the housing market picks up steam.
Of note: General Motors will release vehicle sales results for the month of March 2013 on the morning of Tuesday, April 2. Tune in to GM Authority then for our complete By The Numbers series, and more GM News.