For General Motors, 2015 was a very successful year as production continued to expand and for 2016, it expects to produce more than 9.8 million vehicles. Part of the reason for this optimism is that GM is starting to enter the Chinese market.
General Motors has recognized that the Chinese market offers room for significant expansion and as a result, it is planning to produce 60 new models by 2020 to break into this enormous potential market. GM is also pushing its R&D to develop new technologies so that its vehicles can be better connected to the internet and offer a wider range of options for drivers.
Another key factor is that it needs to adjust its designs to overcome the difficult road conditions in China. GM also hopes that its innovations with electric and hybrid engines will gain some benefits from the Chinese government to give it an edge in the market there, as vehicle air pollution is becoming a real problem in China.
Despite the fact that GM covers a wide range of sectors in the market, the company is still facing threats from new technologies and in particular, the advances in autonomous driver technology. GM is lagging behind in this sector which could impact its results longer term.
GM’s current investment in Lyft could also be a significant step, especially if it can manage to increase its investment to the point where it becomes the major shareholder. Lyft’s alternative car ownership format continues to grow and encourages cars usage and once again and GM’s electric and hybrid cars will boost its opportunities.
GM is also in a strong position financially with earnings of $9.7 billion in 2015 up from $2.8 billion in 2014, an increase of 246 percent. This has made the stock a strong buy among key analysts over the last twelve months, with its value ranging from $24 to $38 so far this year. With gas prices still low and a huge untapped market opening up, GM is certainly looking like a stock to consider.