Two-faced America. Two giants are facing significant challenges related to sales drop in Asia. General Motors e Starbucks, despite operating in distinct sectors, are facing a common denominator: the decline of their performance in one of the most crucial and dynamic markets in the world. As GM tries to get back on track in the auto industry with new strategies and a focus on electric vehicles, Starbucks prepares for a transformation under new leadership. And the market appreciates it.
The GM revolution and the challenge of electric cars
Not long ago, GM was an undisputed giant in the automotive sector in China. By 2010, it was selling more cars in this country than in the United States, making the Asian market essential to its global operations. However, the pandemic and severe restrictions imposed by the Chinese government have heavily affected overall car sales. Furthermore, increasing competition from Chinese manufacturers of vehicles electrical, benefited from favorable government policies, has changed the rules of the game.
The EV market share has exploded, rising from 6% in 2020 to nearly 50% in 2023. This shift has surprised many foreign automakers, who viewed Asia as a safe market. Today, 18 of the 20 best-selling electric vehicles in this region are local brands, while only two are Tesla, demonstrating the growing dominance of domestic manufacturers.
A difficulty that can be found in the numbers: in the second quarter the American giant recorded a 29% drop in sales in the Chinese market and executives admit that returning to the record levels of 2017 is unlikely. To face this new reality, according to reports Bloomberg, GM has decided to restructure its operations, announcing cuts to the staff and a review of its strategies. The company will collaborate with his local partner Saic to plan a strategic reorganization, aiming to concentrate production on electric vehicles e premium models, with the aim of catching up in an increasingly competitive market.
Starbucks: A New Direction with Brian Niccol
In parallel, Starbucks is facing its own phase of renewal. After a period of difficulty that saw a sales drop, both in the United States and in Asia, and the value of the shares collapsed by more than 20%, the famous coffee chain has decided to replace Laxman Narasimhan with Brian Nicol, the former CEO of Chipotle, known for successfully reviving fast food. Niccol, who will also assume the role of chairman of the board of directors, represents new hope for Starbucks.
The announcement of this change has already had a positive effect on the market, with the title of Starbucks in rally (+ 21,73%).
Mellody Hobson, who played a key role in Narasimhan's hiring, will remain on the board as lead independent director but will step down as chairman. In the meantime, Rachel Ruggeri, current CFO, will temporarily assume the role of CEO until Niccol's arrival, expected in mid-September.
This is the third leadership change in 18 months for the company, a clear sign of its determination to regain its momentum in a competitive environment.
