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General Motors and Avto Vaz. General Motors and AVTO VAZ of Russia To: GM
Board of Directors From: David Herman, President General ...
Submitted by KarenStutz on March 21, 2007
Category: Business
Words: 3313 | Pages: 14
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General Motors and AVTO VAZ of Russia
To: GM Board of Directors
From: David Herman, President General Motors-Russia
Date: February 6, 2001
Subject: Business Plan for General Motors- Joint venture with AVTO Vaz in Russia
Goals –GM Russia Joint venture with Avto VAZ:
To make and sell cars in the former Soviet Union and eventually export a considerable percentage of them. This can be successfully achieved through a Joint Venture with AvtoVaz to penetrate the Russian market and produce and sell Chevrolets.
Be of the first auto makers to strongly penetrate the Russian market and gain first come benefits: Having the chance to get a network and get started with suppliers and other partners in Russia in a way that will put GM among the leaders. (Avto Vaz dealers across the country make up the only truly national distribution network for cars in Russia. And the existence of this dealer network is very positive for GM because building a dealer network from scratch is enormously difficult. )
To increase GM Global Market Share above its 13.6% mark by entering emerging markets: Due to GM shrinking global market share in 2000, Emerging markets like Russia represent the so called white-territories which are still unclaimed and uncertain markets for the traditional Western automakers and therefore provide a huge opportunity.
Situational Analysis:
Political Environment
Recent economic reforms and the perceived stability of President Putin’s government indicate that the conditions are right for investment at this point. The European Bank for reconstruction and Development seconds this assumption..
Economic Environment
The Russian economy, although recovering from the 1998 collapse is still weak, uncertain and subject to...
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