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General Motors Reveals Business Development Plans

General Motors CompanyGM revealed its plans to strengthen its core business at an investor conference in Milford Proving Ground. The company will implement global expansion plans and launch different vehicles, apart from focusing on cost efficiency. The company expects these initiatives to boost earnings and in turn shareholders' value.

In order to enhance it core business, General Motors will expand its business over the next five years by investing $5 billion in the new range of Chevrolet vehicles along with maintaining a strong position in China with increased supply of its SUVs and luxury vehicles. The automaker will also expand the Cadillac vehicle line, widen the services portfolio of GM Financial globally and try to boost after-sales and OnStar revenues.

In the next five years, General Motors will launch many new or refreshed vehicles globally. In 2015, 26% of the global sales were generated from new or refreshed vehicles. The company expects this figure to increase to 39% in 2016 and 40% in 2017, before declining to 31% in 2018 and eventually rising to 40% in 2019 and 2020.

General Motors will also focus on ensuring cost efficiency and expects to reduce costs by $5.5 billion through the curtailment of purchasing, manufacturing and administration expenses between 2015 and 2018.

Currently, the automotive industry is rapidly changing with technological advancement and changing customer preferences. General Motors enjoys a leading position in the automotive market and intends to utilize this transition in redefining personal mobility.

The company is undertaking different initiatives to make its vehicles more advanced, safer and fuel efficient. The automaker has also outlined alternative transportation initiatives.

General Motors is presently focusing on autonomous vehicle development. The automaker plans to launch a fleet of 2017 Chevrolet Volts in late 2016, which will be driving autonomously in its Warren Technical Center campus. This initiative will provide a significant impetus to the company's autonomous vehicle development plans. General Motors also announced that the Super Cruise autonomous driving technology, which the automaker has been testing since 2012, will be installed in the 2017 Cadillac CT6.

General Motors will also focus on alternate transportation models, which are expected to generate additional revenues and profits. Meanwhile, the company announced two new car- and ride-sharing projects. One of them is already functional in the New York City while the other is expected to be launched in the first quarter of 2016.

At the Milford Proving Ground conference, General Motors displayed an electric bike or eBike which is being developed at a center in Oshawa, Ontario. eBikes will help easy travel in difficult-to-navigate urban landscapes.

General Motors also focuses on conforming to emission standards. The company is developing a fuel cell technology which will help it to achieve zero emission levels. The company has been working on advancing hydrogen fuel cell technology for over a decade now. General Motors is working in collaboration with Honda Motor Co., Ltd. HMC to develop next-generation hydrogen fuel cells and hydrogen storage systems. By 2020, General Motors expects to complete the development of commercially feasible fuel cell vehicles.

Reduction of vehicle weight is gaining increasing emphasis in today's world. Light weight of vehicles enables them to achieve the strict global CO2 standards and offers enhanced efficiency and performance. In order to make its vehicles light, General Motors is using different materials, including different grades of steel, aluminum and composites. These materials will help make the vehicles stronger, safer and more fuel efficient. General Motors has invented a welding technology which allows the use of more lightweight metals on vehicles by welding aluminum to steel. This technology will be used on the Cadillac CT6 vehicles that will be produced at the Detroit-Hamtramck plant from the first half of 2016.

Currently, General Motors is a Zacks Rank #3 (Hold) stock.

Better-ranked stocks in the auto industry include Superior Industries International, Inc. SUP and Daimler AG DDAIF . Both stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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