Analyzing the Business Environment of General Motors in Canada

This essay provides an analysis of the business environment of General Motors in the Canadian market. It begins with an introduction to the competitive automobile sector, highlighting General Motors as a leading global brand with operations in Canada. The essay then explores the global and Canadian automobile industries, discussing market size, the presence of major manufacturers, and consumer preferences, including the growing trend towards electric mobility. It emphasizes the significance of the Canadian market for General Motors, particularly due to free trade agreements with the United States. The essay examines the closure of GM's Canadian assembly plant and its implications. Furthermore, it delves into the future possibilities for General Motors in the Canadian market, particularly the potential of electric mobility and the importance of political factors such as trade agreements. The essay concludes by summarizing the opportunities and challenges for General Motors in the Canadian market and the need for adaptation to changing consumer preferences.

Running head: BUSINESS ENVIRONMENT
Business environment
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Introduction
In the current business scenario, automobile sector is one of the most competitive sectors
with the presence of huge number of automakers. Some of the automakers are global and having
their operations across the world while some are operating only in their home country. Among
all the global car brands operating across the world, General Motors are the leading one and
considered as the one of the top car brands in the world in terms of sales volume (Zhang &
Stening, 2014). Among all the markets where General Motors are operating, Canada is one of
them where almost the entire car ranges are being offered. However, there are certain market
specific issues and opportunities being faced by them that should be reviewed properly.
In this essay, the different factors relevant in the business of General Motors will be
discussed including the current market trend and future potentialities in the Canadian market.
Global and Canadian automobile industry
It is reported that the global automobile industry is valued at $3 trillion as of 2018 and in
comparison to that, the size of Canadian automobile market is $19 billion. Moreover, the
Canadian automobile industry is integrated with the entire North American industry and thus
production is also segregated between the two countries. It is also reported that total five
manufacturers are having the assembling plants in Canada, which are Ford, General Motors,
Honda, Toyota and FCA. More than 2 million cars are being assembled in Canada every year
(Tuman, 2013). Thus, it can be concluded that compared to the global scenario, less number of
car brands are having their operation in the country. However, on the other hand, it should also
be noted that the car preferences in Canada is different to that of the other regions. This is due to
the fact that where most of the urban centers are having the preferences for small and fuel

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efficient urban cars, Canadians are preferable more towards the diesel guzzling big trucks and
SUVs. This is evident in the product offerings of the General Motors and other brands in the
country. In the recent time, the awareness towards the electric mobility and entry of Tesla in the
Canadian market is rapidly changing the existing market scenario.
Importance for General Motors
Even though Canada is the not the largest market for General Motors in the world but still
it carriers a different significance in their global strategy. This is due to the reason that Canada
and the United States are having free trade agreements and thus it was easier for General Motors
to trade between the two countries. In the later stage, when the United States were in trade wars
with other countries such as China and Russia, General Motors leveraged on their Canadian
operations in exporting to the global markets (Guajardo, Cohen & Netessine, 2015). However, in
December, 2018, General Motors closed their lone assembly plant in the country and thus
currently they do not have any plant in the country. On the other hand, the closure of the
facilities in Canada can also be perceived as the positive note due to the reason that it will help
them in initiating the turnaround strategy. After the recession of 2008, General Motors felt the
pressure of closing down their less profitable operations, which include the Canadian one
(Pavlinek, 2015). Currently, vehicles are imported from the United States and sold in Canada.
Due to the fact that two countries are having free trade agreements under NAFTA, the price
remains the same even after importing.
Future possibilities
One of the major potentialities of automobile sector in Canada is in terms of electric
mobility. This is due to the reason that customers increasingly prefer for the electric vehicles and

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it got further amplified with the introduction of the high performance Tesla cars. Thus, in the
case of General Motors also, entering in this sector will be fruitful in increasing their sales.
However, it should be noted that electric cars are being preferred for acceleration and efficiency
(Dijk, Orsato & Kemp, 2013). This is the key reason behind the instant success of Tesla in the
market. Thus, it is recommended that General Motors should also have the presence in electric
mobility in terms of both urban and performance vehicles. For instance, General Motors are
having electric urban car in the forms of Chevrolet Bolt but gap is identified in the electric
performance car segment. Thus, General Motors are not having direct competing factor against
Tesla. They should have electric solutions in more performance segments. This will help them to
ensure the positive long term business from the Canadian market as well as globally (Abdelkafi,
Makhotin & Posselt, 2013).
In addition, the future possibility for General Motors in the Canadian market also lies in
political environment. This is due to the reason that if the free trade agreements between Canada
and some other countries especially from the Asian region get emerged, then it will be beneficial
for General Motors in starting their export process again. This is due to the reason that in the
recent time, the trade war between the United States and China is causing challenges for the
companies such as General Motors in their international business. Thus, free trade agreements
between Canada and some other potential countries will create huge opportunities for General
Motors to bypass the American operations in the global trade.
Conclusion
Thus, it can be concluded that there are number of possibilities and opportunities being
left for General Motors in the Canadian market. In this essay, these possibilities are being

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analyzed. In addition, the current position of the General Motors in Canada is also identified and
evaluated and it is seen that they are not having any manufacturing plants currently in Canada.
However, with change of the customer preferences towards the electric mobility, it is important
for General Motors to come up with varieties of electric vehicles in order to tap the growing
opportunities. Reviewing the automobile market of Canada in comparison with the global
scenario is important because future trends can get identified.

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Reference
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