General Motors Case Study Paper

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General Motors growth is best in May 2015 with sales up 3 percent year over year and retail sales were up 7 percent when competitor lost ground during the same period. Trucks and crossovers, is far outpacing the rest of the industry with 12 percent year over year and GMC truck sales are up 15 percent for the calendar year to date (Investors News, 2015) Government Policies Affecting Growth Quantitative Easing program According to Kreiter (2014), since the recession, Federal Reserve injected about $3.5 trillion in U.S Financial market and recently in its QE3 purchase of agency mortgage-backed securities and U.S. Treasury securities. The Federal Reserve decided to stop purchasing any more assets at the end of Fiscal year 2014. This was needed to counterbalance the bankruptcy of Lehman Brothers and other large financial institutes with pumping the economy with cash. In the current economic condition, it mean interest rate will start raising which is likely in the later part of 2015 and 2016. Federal Reserve considers the amount of money in the current economy is adequate to achieve projected GDP and it is reduced or no longer buying assets. Any increase in interest rate will make common consumer to think holding on to their current vehicle instead of buying a new one, which will hurt General Motors…show more content…
General Motors in its business plan has built into mitigating interest rate strategy to address any fluctuations in the U.S prime lending interest rates. General Motors has created its own financing arm as a separate finance company to lend money for consumer by adjusting interest rates. General Motor financing company either can match or reduced interest rate like one percentage or zero percentage, so that it can clear up any monthly inventory buildup for the new vehicle and
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