Because GSM is the European standard and is being used in many other countries. Even more, it's very reliable and has a very high coverage rate compared to other communication networks.
A: The GPS satellite system covers the whole world. There are more then 170 countries with GSM coverage worldwide. More about the coverage you will found at http://www.gsmworld.com .
The VTU only uses SMS and GSM data. It takes only a very short period of time to send a SMS data package, and it only needs a very weak GSM signal (field strenght). However, transmission of a data message using the GSM modem call is still the cheapest solution at this moment.
The memory of the VTU stores all the messages, and sends a message immediately when it's in reach of a GSM bas station.
A: GPS was developed by the U.S. military to enable accurate navigation. 24 satellites have been placed in orbit some 20.000 km from the earth's centre. GPS satellites are continuously transmitting a radio message containing information including when the data was sent, which satellite sent it and the current reliability of the system. More about that topic at link GPS tracking.
When the GPS antenna doesn't have a clear sight off the sky, and therefore cannot see the satellites. For instance if the car is in a deep underground garage or under a metal roof. More about that at link GPS antenna installation .
A: No, the VTU can still send a message by GSM, and transmit the latest known position (for instance the entrance of the garage).