Blog Coverage: General Motors Announces Major Restructuring Actions; Reports Exit from India and Multiple other Markets

Upcoming AWS Coverage on Honda Motor Co. Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 19, 2017 / Active Wall St. blog coverage looks at the headline from General Motors Co. (NYSE: GM) as the Company announced on May 18, 2017, key restructuring actions in its GM International operations to enable financial growth. The Company expects to focus its capital and resources on business opportunities expected to deliver higher returns. General Motors has announced that it will cease sales of Chevrolet vehicles in India, Singapore, and South Africa by the end of 2017. Register with us now for your free membership and blog access at:

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One of General Motors’ competitors within the Auto Manufacturers – Major space, Honda Motor Co., Ltd (NYSE: HMC), reported on April 28, 2017, its consolidated financial results for Q4 FY17 and the fiscal year ended March 31, 2017. AWS will be initiating a research report on Honda Motor in the coming days.

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Breaking down the Announcement

This announcement comes on the heels of the previously announced exit of the Company from Europe. General Motors sold its car operation to France’s Peugeot in the continent. According to sources, Peugeot may take control of GM’s Talegaon plant, India, while resuming the exports through a contract manufacturing arrangement.

General Motors was once the biggest car Company in terms of sales, but recently, it has been retracting from several major and unprofitable markets where it has withdrawn from a race with Toyota Motors Corp. (NYSE: TM), Volkswagen AG, and the Renault-Nissan alliance for industry leadership. General Motors market share has declined to about 0.5% in India for April 2017 representing a staggering 42% decline since April 2016.

In India, General Motors will resume operations at the manufacturing facility at Talegaon to continue as an export hub for Mexico and Central and South American markets. The Company will cease the sale of Chevrolet vehicles in the Indian domestic market by the end of 2017. Existing Chevrolet customers will be offered continued support, nevertheless. GM India has around 6,000 employees and around 400 of these, or about 8%, will be laid off gradually.

In the South African market, Isuzu will purchase the Company’s Struandale plant and the remaining 30% shareholding in the Isuzu Truck South Africa joint venture. Isuzu will additionally purchase General Motors’ vehicle Conversion and Distribution Centre and will assume control of the Parts Distribution center. General Motors has announced the withdrawal of Chevrolet from the South African domestic market by the end of 2017. GM will resume works with the PSA Group to evaluate future opportunities for the Opel brand in South Africa.

In East Africa, Isuzu has agreed to acquire GM’s 57.7% shareholding in GM East Africa under a previously announced agreement on February 28, 2017. In the domestic market, the Company will withdraw sales of the Chevrolet brand.

In the Singaporean market, GM International will streamline its regional headquarters, which will retain responsibility for strategic monitoring of the remaining regional businesses and markets, including Australia and New Zealand, India, Korea, and Southeast Asia.

Company Growth Prospects

General Motors is driving on strong sales in two of its important markets, US and China, which are noticeably the largest industry markets of the world. The Company is investing about $600 million a year on self-driving car engineering and car-sharing ventures. General Motors and its joint ventures sold about 272,770 vehicles in April 2017 according to the announcement made on May 04, 2017. Although sales were down 1.9% y-o-y, the Company’s deliveries of luxury vehicles, SUVs, and MPVs climbed by about 14% combined on an annual basis.

The Company expects to realize annual savings of approximately $100 million and plans to take a charge of approximately $500 million in Q2 FY17, as a result of these actions. The charge will be treated as special and excluded from the Company’s EBIT-adjusted results. About $200 million of the special charge will be cash expenses. General Motors International Operations (GIMO) net profit ($319.00 million) for Q1 FY17 has declined by $60.00 million since Q1 FY16, for the period ending March 31, 2017.

Stock Performance

At the close of trading session on Thursday, May 18, 2017, General Motors’ stock price rose slightly by 0.15% to end the day at $32.47. A total volume of 14.01 million shares were exchanged during the session. The Company’s share price has surged 10.51% in the past twelve months. . The Company’s shares are trading at a PE ratio of 5.02 and have a dividend yield of 4.68%. The stock currently has a market cap of $49.72 billion.

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