Press Release

GM Announces Global Distribution Strategy for Service Parts Operations

12/09/96

GM Service Parts Operations Has Global Distribution Strategy

DETROIT, Dec. 5 -- General Motors Service Parts
Operations (SPO) has its sights set on being a world leader in the
automotive aftermarket, and it has the global distribution strategy in
place to make it happen.

General Motors Vice President and General Manager of SPO
William J. Lovejoy presented SPO's global growth plan when he
addressed the Society of Automotive Engineers (SAE) Global Vehicle
Development Conference here today.

"The global opportunities for the automotive industry largely reside
outside the United States. The economic growth rate from 1996 to 2005
for the Asia Pacific, excluding Japan, is forecast at 6.2 percent as
compared to a U.S. growth rate forecast annually at 2.4 percent."  He
identified four areas that SPO is concentrating on to grow globally:
1) development of ACDelco all-makes products, 2) establishing and
building the ACDelco brand, 3) building and expanding SPO's global
distribution framework to make parts available around the world, and
4) expanding the capability of North American GM dealerships to grow
their all-makes service through GM Goodwrench Service Plus
merchandising.

"SPO's charter is twofold," said Lovejoy. "To maintain total customer
enthusiasm after the purchase of a GM vehicle and also to provide
parts for all types of vehicles, which ties in with our ACDelco
all-makes strategy. Our vision is to provide the right part at the
right time and right price. The right time is now -- we strive to have
parts available locally in our distribution partners' inventory so
that same day repair or maintenance can be achieved."

Lovejoy explained SPO's different North American warehousing
facilities: Processing Centers, which receive parts from suppliers and
often paint, assemble or package the product before distributing it to
the parts distribution centers (PDCs); the PDCs then receive parts
from the processing centers and suppliers to ship to GM dealerships
and aftermarket distributors; the National Distribution Center, which
distributes parts with low demand (like carpet and inside door panels)
to GM dealerships and aftermarket distributors; and the newly created
National Return Center that receives and processes returned parts from
GM dealerships and warehouse distributors.

"Even though we have this extensive distribution network in place in
the United States, we continually look at new and better ways to do
business. For example, a few years ago, we took a big step in what I
am sure is the right direction." Lovejoy went on to explain that when
Schneider Logistics (Green Bay, Wisc.) was selected as SPO's
transportation manager, it was the biggest third party agreement in
U.S. logistics history. Schneider Logistics selects, manages and pays
all of the transportation providers SPO utilizes. "Service demands on
our systems were growing, and the need to reduce costs was just as
intense. Traditionally, we would have hired people and built systems,
but we needed to take a new approach and look outside the organization
for a solution."

During the two years of SPO's agreement with Schneider Logistics,
costs have been cut, and parts are being delivered every day to every
dealership and others within their requirements. "It's this type of
'out of the box' thinking and acting that will enable us to grow
globally," added Lovejoy.

Lovejoy then focused on the development of all-makes ACDelco products
and establishing the ACDelco brand globally as the top-of-the-mind
automotive parts that drive the world.

"This all-makes opportunity is enormous. With 650 million vehicles
globally, and GM's share at 17 percent, it is important that we
develop with Delphi and outside suppliers an all-makes product
portfolio for vehicles like Honda, Toyota, Daihatsu, Volkswagen,
Nissan and others." SPO's initial focus is on batteries, filters,
spark plugs, brakes, starters and alternators, shocks and fluids.

"To establish the ACDelco brand, we advertise in more than 55
countries globally and utilize traditional resources including
newspaper, outdoor, magazine, television, radio and direct mail." He
also mentioned that SPO works closely with an international network of
advertising agencies to ensure local cultural customs are recognized
and communications are tailored to the local market.

"Sports marketing is an emerging and important area," added
Lovejoy. "We are playing a significant role in sponsoring an ACDelco
car, driven by Dale Earnhardt, in the joint venture between the
U.S. NASCAR group and the Suzuka Circuit in Nagoya, Japan."

Lovejoy then covered SPO's plan to build distribution and shared the
following example of how unique partnering relationships are working
to help SPO penetrate the Japanese market.

"Getting product into Japan's distribution system is a significant
challenge, requiring a partner that already has a successful presence
in the marketplace. About two years ago, we started talking to Toyota
about our two organizations partnering to expand into Japan's
independent aftermarket with ACDelco-branded, all-makes product. We
formed an alliance that has enabled us to sell ACDelco-branded
batteries and other products through their well- established
distribution channels in the Japanese aftermarket."

Lovejoy said that China is an important element of SPO's global growth
plans, with establishing a presence while minimizing potential risks
being the key.

"Through alliances with key partners who understand and know how to do
business in China and who know how to manage and successfully operate
distribution companies within China, we have been able to establish a
presence there. Our distribution footprint is by no means complete,
and we continue to build our distribution in China while the country
continues to undergo dynamic and pervasive change."

Lovejoy said SPO has also expanded its distribution presence in other
Asia Pacific markets through some "non-traditional" partnerships. "In
Taiwan, we are in the process of forming a network of ACDelco Service
Centers in partnership with one of our distributors who is part of the
very large Panvest Financial Investment Group." These service centers,
which target service purchasers seeking a reliable, dependable,
high-quality repair experience, regardless of the make of the vehicle,
are being launched with distributors throughout the Asia/Pacific,
Middle East, Europe, and Latin America regions. He added that, "Our
plans are to have hundreds of these ACDelco Service Centers in
operation outside of North America in the next several years.

"These examples emphasize that, in today's marketplace, you can't go
it alone and that traditional distribution arrangements are no longer
sufficient. New partners with established distribution need to be
enlisted on a worldwide basis to ensure a presence in a rapidly
growing world of opportunity. We're confident at SPO that we're on the
right track with our distribution strategy to be a world leader in the
automotive aftermarket."

SPO, headquartered in Flint, Mich., markets automotive replacement
parts and accessories worldwide under the GM and ACDelco brand
names. SPO also provides inventory consultation and recommendations
for improvement in parts, accessories and service merchandising under
the GM Goodwrench Service banner. For more information, visit the
ACDelco "On The Edge" web site at http://www.acdelco.com and the GM
Goodwrench Service "Cyberbay" at http://www.gmgoodwrench.com.