. Oil prices started dropping after Gulf War and reached its lowest price in 1994. These were surely good signs for auto industry. B.IndustryGeneral Motors is in vehicle manufacturing, designing, building and marketing cars and trucks business.Chrysler Motor Corporation, one of GM’s major competitors created Chrysler for fulfilling market’s luxury car demand, Dodge is offered as a middle-priced car as well as trucks, Plymouth for the market’s low budget or entry level segment and the DeSoto as a step-up from the Dodge. Ford, after losing its big market share and technological advantage, has always been a serious competitor for GM. Ford created Lincoln as a prestigious name, Mercury as a middle-priced offering. Besides the big three, Japanese auto-makers such as Honda, Toyota and Mazda had some nifty vehicles of their own. Japanese share of the U. S. car market continued to grow and became 27% in 1991. Also, foreign car share of the U.S. car market went up from 30% to 34% from 1990-1994. (Source: Motor Vehicle Outlook, FTA Revenue Estimating Conference, Minneapolis, Minnesota, September 2001)Before entering into the auto industry, a company needs to invest huge amount of money, so, domestic potential of new entrants is low for this industry. Korean car producers can be described as foreign new entrants.GM has about 30,000 suppliers all around the world. GM Worldwide Purchasing is operating in the four man regions of the world: Asia Pacific, Europe, Latin America and North America. Annual purchases of GM are about $86 billion in goods and services in support of approximately 8.6 million vehicles produced in 30 countries around the world. Since GM has so many numbers of suppliers, we can say that the power of the suppliers is not a real threat for the company.Some of the factors affecting the auto sales are disposable income, vehicle prices, interest rates and affordability. Disposable income and interest rates were low ...
