Eco 202
12/09/2009

Demand for GM The recession has many companies struggling to stay afloat as the demand for many products has drastically declined. While very few companies have gone unaffected by the recession car manufactures have been hit harder then most. With plants all over the country shutting down just so the company can get by, but even with all the layoffs and closed plants it was just not enough for some. GM was one such company being driven to declare bankruptcy GM was then restructured with help from the government and given the chance to try again. Now GM must find ways to increase demand for their cars and beat out the competition. What is demand and why is it important? Demand is how much a product or service is desired by consumers. (Economics Basics) Demand is important because with out demand companies would not be able to exist because they would have no customers. Because the demand for a company’s product is so important being able to manage that demand becomes an important part of business planning. When managing demand a company ultimately wants to be able to set a price that will attract the highest amount of customers while still being able to make a profit. The company also wants to make sure that demand does not exceed the supply and that it is not less then the supply. Making sure the company can keep up with supply and maintaining the demand for that supply can be a difficult task. Keeping up a demand for its vehicles is going to be critical as GM continues to restructure them selves and get back to being the automotive titan they have been seen as in the past. One way that auto makers keep up demand is with returning customers loyal to the brand. This brand loyalty is critical as it guaranties you future sales however brand loyalty has been on the decline. A graph from the New York Times shoes that brand loyalty has been on a dramatic decline for some time now.
[pic]( VLASIC, BILL)

With brand loyalty being so important GM like many manufacturers often offers incentives for returning customers to purchase another GM vehicle. Often these incentives will include a thousand dollars or more off the perchance of a new vehicle for returning customers ( Alphen, Tony Van. ). Other methods are used to keep up with existing customers such as newsletters, and customer satisfaction phone calls. GM is working hard to keep up their customer loyalty to maintain demand. In order to create consumer loyalty and generate interest in the company GM is being driven to develop new and exciting cars. The demand for some of these vehicles is exceeding what GM is currently able to supply. One example of this is with the new Chevrolet Camaro. An article by USA Today says “General Motors says it's struggling to meet demand for its new 2010 Chevrolet Camaro, with some buyers paying $500 to $2,500 more than the sticker price” (O'Donnell, Jayne) While the Camaro will not single handedly save GM it is proof that GM can produce a vehicle in which the supply can not keep up with demand. When looking at GM its American presence is generally what is most focused on. However GM is very well positioned in the Global market, with a high demand in other countries for its reliable yet affordable vehicles. While GM sells and manufactures vehicles world wide it has seen its largest demand in China. As stated in their quarterly report GM sales in the Asia Pacific region have grown twenty percent from the previous year. The sales in china alone were up sixty seven percent compared to a year ago. GM’s Sales all over the globe saw an increase, with seventy two percent of GM’s sales coming from the global market. (GM, p1) Being so well positioned in the global market GM is able to expand its customer base over a wide range of vehicles allowing them to target the small, mid-size, and large vehicle markets. Being able to anticipate and see demands in the market is very important and GM is doing this. With gas prices on the rise and many people worried about global warming GM is producing alternative fuel vehicles and hybrids. GM’s biggest contender in the hybrid/alternative fuel market is the Chevy volt. “Volt is an electric car that can create its own electricity. Plug it in, let it charge overnight, and it’s ready to run on a pure electric charge for up to 40 miles – gas and emissions free. After that, Volt keeps going, even if you cant plug it in. Volt uses a range-extending gas generator that produces enough energy to power it for hundreds of miles on a single tank of gas” (2011 Volt) With the Volt GM is positioned for a strong presence in the alternative fuel market as the technology used to develop the volt will be able to be used in future GM vehicles. Even though it is recovering from bankruptcy and has been through some tough times GM is rebounding well. The increasing demand for their cars is the driving force behind this bounce back. With exciting new products like the Chevy Camaro which has consumers waiting in line for one, to the Chevy Volt which is on the leading edge of electric car technology GM is capturing consumer interest. With a rising market share in foreign markets as well as at home in the Americas GM is well positioned to continue growing. With a focus on customers and maintaining brand loyalty GM is on its way to reclaiming a spot as a titian of the automotive industry.

Works Cited

2011 Volt. Cheverolet. Web. 05 Dec. 2009. .

VLASIC, BILL. "For Car Buyers, the Brand Romance Is Gone." New York Times 20 Oct. 2009: b1. Web. 7 Dec. 2009. .

Alphen, Tony Van. "GM woos orphaned customers." The Star. The Star, n.d. Web. 8 Dec. 2009. .

O'Donnell, Jayne. "Chevrolet races to meet demand for 2010 Camaro." USA Today. N.p., 29 June 2009. Web. 8 Dec. 2009. .

"GM Announces 2008 Global Sales of 8.35 Million Vehicles." www.gm.com. GM, 21 Jan. 2009. Web. 9 Dec. 2009. .

"Economics Basics: Demand and Supply." Welcome to Investopedia.com. Web. 8 Dec. 2009. .