General Motors could leave South America due to financial problems

As the elders of my town would say " General Motors, who has seen you and who sees you ". The one who, in his day was the first car manufacturer in the world, is living an authentic nightmare. 2009 was the point at which everything changed, because in addition to losing his scepter in the automotive sector , he has not managed to raise his head. The blame for all this is their accounts , as they never seem to match their sales.

The last big move that General Motors did, In addition to selling Opel to the PSA Group , it had to do with the dismissal of thousands of workers from their factories in the US. After that, Mary Barra, CEO of the American group, expected to reduce part of the structural expenses. However, now he has announced another possible withdrawal that would touch the group. South America is the area of ​​the globe that is resisting, because according to its numbers, the profitability does not finish arriving.

Sales do not match the economic balance

We have known this information now, but it was announced by Mary Barra /strong> days before the opening of the Detroit Show . According to the CEO, the situation of General Motors in South America is complicated, as its operations are 40 percent below break-even. Thus, he announced that they are studying the possibility of leaving the region. For this, he confirmed that they are studying investments , because they do not want to keep putting money in a market where they are burning it.

Today, Brazil and Argentina are the strongest markets General Motors in South America . However, its sales volume does not justify the investments that must be made to maintain its factories and models. However, Carlos Zarlenga , president of GM Mercosur, has confirmed that the situation of the consortium in the region is critical and that in order to reverse it, it needs great sacrifices on the part of all.

The best-selling models of General Motors in the region are Onix and Prisma , although they have achieved this by reducing price and margin. In addition, both products are economical and, therefore, do not reach the level of profitability sufficient to clean up the accounts. It will be necessary to see the evolution of the situation, because in the factory of Alvear (Argentina) a labor cut has already been confirmed.

Source - Autoblog