General Motors 2015 Annual Report Download - page 7

Table of Contents
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Several methods are used to promote our products, including the use of dealer, retail and fleet incentives such as customer rebates and finance rate support.
The level of incentives is dependent in large part upon the level of competition in the markets in which we operate and the level of demand for our products.
I n 2016 we plan to continue to price vehicles competitively, including offering incentives as required. We believe this strategy, coupled with sound
inventory management, will continue to strengthen the reputation of our brands.
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Retail sales are cyclical and production varies from month to month. Vehicle model changeovers occur throughout the year as a result of new market
entries. The market for vehicles depends on general economic conditions, credit availability and consumer spending.
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We market vehicles worldwide primarily through a network of independent authorized retail dealers. These outlets include distributors, dealers and
authorized sales, service and parts outlets.
The following table summarizes the number of authorized dealerships:



GMNA 4,886
4,908
4,946
GME 6,330
6,633
7,087
GMIO 7,755
7,699
7,472
GMSA 1,281
1,272
1,201
Total worldwide 20,252
20,512
20,706
We and our joint ventures enter into a contract with each authorized dealer agreeing to sell to the dealer one or more specified product lines at wholesale
prices and granting the dealer the right to sell those vehicles to retail customers from an approved location. Our dealers often offer more than one GM brand at
a single dealership in a number of our markets in order to enhance dealer profitability. Authorized dealers offer parts, accessories, service and repairs for GM
vehicles in the product lines that they sell using GM parts and accessories. Our dealers are authorized to service GM vehicles under our limited warranty
program and those repairs are to be made only with GM parts. Our dealers generally provide their customers access to credit or lease financing, vehicle
insurance and extended service contracts provided by GM Financial and other financial institutions.
The quality of GM dealerships and our relationship with our dealers and distributors are critical to our success as dealers maintain the primary sales and
service interface with the end consumer of our products. In addition to the terms of our contracts with our dealers we are regulated by various country and
state franchise laws that may supersede those contractual terms and impose specific regulatory requirements and standards for initiating dealer network
changes, pursuing terminations for cause and other contractual matters.
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Costs for research, manufacturing engineering, product engineering and design and development activities relate primarily to developing new products or
services or improving existing products or services including activities related to vehicle emissions control, improved fuel economy, the safety of drivers and
passengers, urban mobility and autonomous vehicles. In the years ended December 31, 2015, 2014 and 2013 research and development expenses were $7.5
billion, $7.4 billion and $7.2 billion.
Product Development
The Product Development organization is responsible for designing and integrating vehicle and powertrain components to maximize part sharing across
multiple vehicle segments. Global teams in Design, Program Management, Component & Subsystem Engineering, Product Integrity, Powertrain and
Purchasing & Supply Chain collaborate to meet customer requirements and maximize global economies of scale.
Our global vehicle architecture development has been consolidated and headquartered at our Global Technical Center in Warren, Michigan, to further the
standardization of our overall vehicle development process. Cross-segment part sharing is an essential
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