General Motors Company (NYSE:GM): Restructured Sales to Leverage Opel in Russia

Boston, MA 10/21/2013 (wallstreetpr) –  All is not well at Opel and now the parent company General Motors Company (NYSE:GM) has decided on a sales division altering as a way to boost its fortunes in Russia whose car market is kind of in a boom now. It means that leveraging Opel’s Russian standing would help it crank up sales in that car market.

According to GM, its future Russia business operations would be masterminded from its European headquarters in Rüsselsheim in Germany, which is also the headquarters of Opel, its German subsidiary. Presently, GM’s Russia sales are organized and supervised from Shanghai. These sales restructuring are expected to enhance Opel’s sales in Russia to boost revenue.

Russia is expected to be the automakers’ biggest sales market in Europe and it thus makes a lot of sense that GM is seeking to increase its general foothold in the region, both for the main unit and its German subsidiary, Opel. No wonder Opel’s CEO Karl-Thomas Neumann has termed the sales altering “the right decision at the right moment.”

In 2012, Opel sold 80K units in Russia which signified a significant sales growth for the company in the region. So far, Russia stands as Opel’s third most important market after UK and Germany in the Eurozone.

It is reported that Opel is already controlling 3% of the Russian car market and about 6% in the European market overall. GM also has foothold of this market, selling Cadillac and Chevrolet in Russia.

In the last nine months of F2013, GM realized 4.6% in its global sales. This is attributed to strong demands in China and the U.S. markets in the Q3.13 which helped offset the ailing auto market in South America and Europe. The giant U.S automaker sold more than 7.25 units in the nine months duration. This also signified 5.5% surge in the Q3.13 sales, placing GM at podium position ahead of rival Volkswagen of Germany.

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email (alanmasterson@wallstreetpr.com) or his Google+ page (https://plus.google.com/103338576216002376250).

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