Question

1. Do you think the GM idea to enter Russian market will be a success?

2. Did GM face competition from US companies going in Russia?

3. Do you think people have the purchasing power in Russia to buy cars? It is still a luxury thing, isn’t it?

4. Do you think it would be feasible for GM to go solo in Russia in future once it establishes its own distribution network and local labor force?

Answer 1

GM'S idea to enter the russian markets cannot be a success due to the following reasons:

1) if the company is thinking for the long run. then it might be a feasible option to invest in RUSSIA, thinking in the short run the idea might fail.

russia is a place that may not provide returns in the short run.

GM doesn't have parts and components manufacturing in Russia. It has to import from european suppliers,while the demand for cars keep falling, so the costs are rising demand is falling.

2. yes. competetion from the existing companies will always be there once GM decides to venture into the Russian markets. GM faces competetion from FORD MOTORS. NISSAN and RENAULT also performes well for shareholders.

3. YES ,people in RUSSIA have the purchasing power, like the other countries, people of Russia also demand for cars,cellphones and fashion items. Russia stood 57th in the world in terms of purchasing private cars.

4. yes. it might be possible that in the long run ,with demand for cars increasing in Russia and by establishing its own distribution units and cutting down on costs it might be feasible for GM to go solo in the future.