Above all, General Motors remains committed to using an international competitive strategy that will allow it to compete with Ford, Toyota and Volkswagon outside the United States, “Overseas, GM has embarked on a massive capital expansion plan. Long used to being No. 1 at home, the company plans to catch up with rivals such as Ford, Toyota, and VW outside North America. Over $2 billion has been committed to new plants in Austria and Spain and new matrix forms of management have been introduced to help speed the rationalization of production needed to gain economies of scale and to help the development of a world car and truck,” (Stopford, et. al., 1980: 436). This analysis will discuss the recent changes in Peru’s economic history that allow General Motors an excellent opportunity to invest in this expanding market. Also included will be a description of the products it will offer, a marketing strategy for doing so in Peru, a profile of the Peru auto industry and an analysis of the competition GM will face.
Many changes in the Peruvian economy have allowed for Peru to be a primary target for increased investment by GM. Traditionally, Peruvian economic history was one of chaos and near collapse. Until President Alberto Fujimori was installed in 1990, the Peruvian economy was on the brink of disaster, “The new administration inherited an economy near collapse, without external credit markets, characterized by hyper-inflation and a deep recession. Over the last year, however, Peru has made remarkable strides to establish a reform program and carry out sweeping stabilization measures designed to correct the country’s economic woes and reverse the effects of years of mismanagement,” (Zeiger Hatfield, 1992: 23). One of the greatest ways in which the Peruvian government has changed is its attempts to open its economy to increased foreign investment from the liberalization of many trade laws.
This open-trade mentali...