Economies of Scale GM

Gm is the second largest suto maker in the world and on the heels of Toyota to become the largest once again. GM has now turned to worldwide design teams to design cars for their different divisions all around the world. By doing this GM is able to save oney on parts. They are able to use economy of scales to place large orders with their suppliers to lessen the average cost per part for the vehicles.

By ordering so many parts GM, also lowers suppliers bargining power. Suppliers are more likely to accept terms that GM demands to ensure they continue to stay in business. By lessening cost GM would be able to either increase profit margin or lower the cost to the costumer, which would increase sells.

http://www.thecarconnection.com/tips-article/1010253_gm-design-goes-worldwide