Market Overview

GM's Big Data, Big Possibilities



General Motors Company (NYSE: GM) Automotive companies have the opportunity to leverage new sources of Big Data to accelerate product design, improve vehicle performance and enhance the driver experience. Advanced analytics and new data preparation and enrichment capabilities, can yield new insights on some of the automotive industry’s traditional business areas including. The company plans to implement cost discipline to continue to generate strong business results moving forward. General Motors reported record profits of $9.19 billion in 2011.

GM announced this month it will invest nearly $332 million in four manufacturing sites to produce more efficient engines and transmissions, GM's commitment to deliver what customers want: technology-driven performance. UAW Vice President Joe Ashton, directs the union’s GM department stated “This investment goes a long way to ensuring GM remains a marketplace leader and our members can continue to support and share in the company’s growth.”

General Motors had another consecutive year of strong earnings. Fourth quarter net income of $0.9 billion, up from $0.5 billion last year. Revenue increased 1 percent to $152.3 billion, compared with $150.3 billion in 2011. The EBIT-adjusted of $1.2 billion in the fourth quarter, up from $1.1 billion last year. Since 2009, GM announced investments of more than $8.5 billion in U.S. operations, $1.2 billion so far in 2013 creating more than 24,700 jobs.

Last year, GM had planned consolidating 23 data centers to 2. The company will also be reducing the number of applications GM runs by at least 40%. GM also adopted HP's Autonomy data management and Vertica analytics software. George Kadifa, executive VP of HP Software, stated "the largest deployment of our full software portfolio in the world." IT challenges for GM will be under pressure to innovate new ideas, expand areas in customer research such as social network sentiment analysis, globalizing applications, management, and global collaboration.

“We think there’s an opportunity to grab data and understand better how the car operates and how consumers use the vehicles and feed that information back into our design process and help optimize the user’s experience in the future as well,” stated John Ginder, Ford Motor Company.

GM Competition

GM and competitor auto companies are investing in ways to keep the driver connected safely by leveraging predictive analytics. GM is aggressive in its vehicle launch and focus on improving the topline. GM is in a better position than its competitors to take advantage of its aggressive growth because its reorganization plans will operate on a leaner cost structure and balance sheet. GM has another edge over its U.S. rivals, strong overseas demand, especially in China, which is now the world's largest market for auto sales.

Ford Motor Co (F:New York) Ford could use its heavy new big data focus to aggressively find strong financial opportunities. Ford's share price is up more than 700% since 2009. Ford's net income last quarter was $1.63 billion, but the company earned $2.3 billion in North America before taxes.

The Ford Focus is the best selling auto and is especially popular in China, where GM competes. A Ford F-series that is on its way out might not show as well. Fresh pickups from GM are also on its way in 2013. Ford Europe has been losing big money for several quarters, including $468 million in the third quarter of 2012.

Ford is also aggressive in big data. Ford used text-mining algorithms on its auto platforms. The three-blink indicator was introduced on the new Fiesta in 2010 and is now available on most of Ford's products. The use of text-mining algorithms was critical in predictive analytics and data mining market research versus traditional market research.

Kia Motors Corp (OTCOTHER: KIMTF) announced the recalling over 1.6 million vehicles this month. The move may mean the world's fifth-biggest automaker ends up recalling even more vehicles. the company slid down industry rankings for quality in recent years. Kia plans to fix issues and improve rankings for 2013.

Kia leverages big data working with Denuo. The company is redesigning all of Kia's web properties, including its website, in-store kiosks and, eventually, mobile apps. Kia’s strategic plans involve improving the user experience on its various web portals and customer experience improvements. For the long-term, Denuo has been tasked with thinking about the role internet-enabled cars will play in the lives of consumers.

GM Fourth Quarter Results

Revenue in the fourth quarter of 2012 increased 3 percent to $39.3 billion, compared with the fourth quarter of 2011. GM’s fourth quarter 2012 net income attributable to common stockholders was $0.9 billion, or $0.54 per fully diluted share, including a net gain from special items of $0.1 billion or $0.06 per fully diluted share.

In the fourth quarter of 2011, GM’s net income attributable to common stockholders was $0.5 billion, or $0.28 per fully diluted share, including a net loss from special items of $(0.2) billion, or $(0.11) per fully diluted share.

EBIT-adjusted was $1.2 billion in the fourth quarter of 2012, compared with $1.1 billion in the fourth quarter of 2011. Fourth quarter EBIT-adjusted for 2012 includes the impact of restructuring charges of $(0.2) billion.

GM shares advanced the most in three weeks gaining 3.2% to $29.28. The company's strengths are seen in revenue growth, increase in stock price during the past year, increase in net income, attractive valuation levels and growth in earnings per share. GM reaffirmed April 11 its commitment to its money-losing European operations, pledging to invest $5.2 billion in Adam Opel AG to support the unit's recovery. Since the same quarter one year prior, revenues slightly increased by 3.5%. GM is poised for EPS growth in the coming year.

Investors should be bullish for GM. The company had a solid year in 2012, delivered a third straight year of profitability and took significant actions to put the company on a solid path for future growth. General Motors and Ford will work together to jointly design new fuel efficient transmissions, a move that could potentially save them millions of dollars. This year GM’s priorities will be executing flawless new vehicle launches, controlling costs and its big data can create a longer-term customer relationship. Big Data is transforming one of the world’s oldest industries.  

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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