Globalization of Production:GM in Uzbekistan

Yekaterina SongInternational Business &

Trade

Questions to Discuss1. Why GM chose Uzbekistan among other

Central Asian countries?2. What are the reasons of General Motors’

high sales in Uzbekistan? 3. What would be one of the main reasons of

smaller market share of GM cars in Indian market comparing with Uzbek automobile market?

4. What are the positive impacts from Glob-alization of GM car production can be found in Uzbekistan?

5. Is there any threats for GM in Uzbekistan Automobile Market in the near future?

GM in briefO Largest American Automobile Corpo-

rationO Foundation date: 1908O was largest automobile producer in

the world during 77 years (till 2008)O owns factories in 31 different coun-

triesO sales in 157 countriesO total number of employees: 202,000

GM Brands

GM UzbekistanChevrolet

Uzbekistan

UzbekistanO Independence 1991 (21 y.)O Secular country with majority of Muslims

80%O Over 120 different nationsO President is a head of the stateO Spoken languages: Uzbek (90%), Russian (50%), Farsi O Main industries: Cotton (2nd exporter), Gas, Gold (4th pro-ducer), Machinery, Chemicals; Tourism and services (7,000 historical sites)

GM UzbekistanO Joint Venture of UzAvtoSanoat JSC (75%) and GM

(25%)

O produces Chevrolet brand cars and Daewoo

O founded in March, 2008

O location: Asaka city, Eastern part of Uzbekistan

O production capacity: 250,000 automobiles a year

GM Uzbekistan assortment1. Chevrolet Tacuma (2007~2008 y.)2. Chevrolet Epica (2007~2011 y.)3. Chevrolet Nexia (2008~2011 y.)4. Matiz $ 6,9005. Matiz Best $ 6,8006. Chevrolet Spark $ 9,3007. Chevrolet Lacceti $ 14,500 ~ 17,7008. Chevrolet Captiva $ 30,0009. Chevrolet Malibu $ 33,20010. Chevrolet Cobalt (from 2013 y.)

Features & Achieve-ments

O In 2011, 94% of all new cars sold in Uzbekistan was produced by GM Uzbekistan

O GM-Uzbekistan is 3rd largest exporter of automobiles to Russia

O Uzbekistan is 8th largest market for Chevrolet in the World (in 2011)

1. Why GM chose Uzbekistan but not any other Central Asian country?

1. Why GM chose Uzbekistan but not any other Central Asian country?

O1992 UZ-Daewoo J-V

O 2008 GM Uzbekistan

2. What are the reasons of General Motors’ high sales in Uzbek-

istan?

1. What are the reasons of General Motors’ high sales

in Uzbekistan?

O GM Uzbekistan is the only Passenger Cars producing Company in Uzbekistan.

O High import tariffs for foreign cars – 20~30% + additional cost of $3,000~9,000, + shipping cost

O Expensive Auto-service for imported cars.

3. What would be one of the main reasons of

smaller market share of GM cars in Indian mar-

ket comparing with Uzbek automobile mar-

ket?

Indian Market for Passenger Vehicles

Passenger Vehicles Market Share in India

Tata Motors 16.45%

Maruti Suzuki India 46.07%

Hyundai Motor India 14.15%

Mahindra & Mahindra 6.5%

Others 16.83%

4. What are the positive impacts from Globaliza-tion of GM car production can be found in Uzbek-

istan?

4. Positive impactsO more jobs (5,000 employees working in GM

assembly plant)O money inflow into state budget O development of related businesses (60% of components localization is already reached. 80 domestic companies supplies their products to GM Uzbekistan factory)O advanced technologies from Korea, Italy, Hol-

land, USA, German, Japan, Czech, India, and Poland

O Education (ex: Turin Polytechnic University in 2009)

5. Is there any threats for GM in Uzbekistan Automobile Market in the

near future?

O http://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/us/en/2012/Mar/0321_uzebmalibu.html

O http://www.thenational.ae/lifestyle/motoring/uzbekistan-an-unlikely-example-of-chevrolets-global-influence

O http://www.autoblog.com/2010/07/06/psa-chevy-owns-94-of-uzbekistan-car-market-for-make-benefit-gl/

Thank You!!