Other Editorials

Market Share Myopia

Jim Dollinger
Friday, December 8, 2006

Detroit News
Dan Howes' Weblog

On GM's share slide 'bottoming'

Here in the belly of the automotive beast, we look for signs the long march through Loserville may soon be over. So comes now General Motors Corp.'s top North American sales guy, Mark LeNeve, proclaiming that the General's market share slide has "bottomed out."

Really? This before arch-rival Toyota Motor Corp.'s (excessively?) ballyhooed Tundra pickup even starts rolling off its brand-new Texas assembly line? This even as other rivals are making deeper inroads into the smaller car market? This as GM dealers, especially on the coasts, are reportedly languishing under the accumulated weight of years of missed expectations for GM prodcts.

Which is not to say that GM -- or Ford, for that matter -- isn't fielding some of the best cars and trucks in its history. It is, and so is Ford. Trouble is, too few American consumers believe it enough to even give their metal a whirl, much less sign on the dotted line and drive off the dealer lot.

Understand LaNeve's impulse to declare the bleeding stanched. Wall Street and dealers want to hear it; the union and salaried employees wants to hear it; GM communities across the country and beleaguered Detroit Auto want to hear it.

But now is not the time, however promising things look near-term, to start declaring the GM revival is here. Heard it before, more times than a lot of folks can count. Retired GM Chairman Jack Smith had it right when he said, "Deeds, not words."

Yes, he had it right.

Question for Mr. LaNeve from Buickman:

If gaining one tenth of one point will thrill you out of your mind, and is one hell of a job, what will an average achievement bring?

Market share continues to slide and will again next year. First quarter production has been slashed by over 9% as the inept marketing by incompetent executives causes further irrepairable damage to our brands and brings bottom line losses in spite of new product and lowered expenses. Plant closings and employee buyouts are no way to grow the business, neither is consolidating dealerships, selling assets, and increasing debt by mortgaging machinery and equipment. Even worse, there are few assets left to sell in order to mask the futility of Red Toe Tag sales and March Madness distress merchandising.

Thursday, December 07, 2006

GM aims to gain market share

LaNeve is optimistic, especially for crossover vehicles, but says success will be incremental.

Greg Bensinger / Bloomberg News

General Motors Corp. is counting on new sport utility vehicles and redesigned cars to stop a slide in U.S. market share, GM's top marketing executive said.

GM's sales decline has "bottomed out," and the world's largest automaker hopes to regain some lost share, North American marketing chief Mark LaNeve said Wednesday in an interview in New York.

That would mean selling about 170,000 more vehicles annually.

LaNeve didn't specify a time frame for ending a sales skid now in its fourth year, though he later told reporters, "If we grow a tenth of a point next year, I'll be thrilled out of my mind. "If we gain a tenth, that's a hell of a job."

GM has been struggling to halt an 8.3 percent drop in U.S. sales through November, with the Saturn and Hummer brands the only ones posting gains this year. The automaker's U.S. market share was about 24.7 percent, compared with 26.2 percent in 2005.

"It's not going to happen overnight. I'd love to see market share go up 1 percent next year, but it's going to take a lot longer than that," LaNeve said. He said he expected GM's sales gains to be "incremental."

The company last added market share in 2002, according to Woodcliff Lake, N.J.-based Autodata Corp. GM's U.S. sales through November were 3.73 million vehicles.

"Next year's going to be a good year," LaNeve said. New, more car-like SUVs such as the GMC Acadia and Saturn Outlook are "really going to be big sellers," he said.

LaNeve said he expected combined sales of 120,000 to 130,000 of the two crossover vehicles and the Buick Enclave in 2008, the first full year of production for all three.

Shares of GM fell 77 cents, or 2.6 percent, to close at $29.37 in New York Stock Exchange composite trading on Wednesday. The stock has gained 51 percent this year.

GM to idle SUV plants

Meanwhile, GM said Wednesday it will cut production in January at three plants that build large sport utility vehicles because demand has slowed.

The factories in Mexico, Texas and Wisconsin make models including the Chevrolet Tahoe and GMC Yukon, Tom Wickham, a GM spokesman said. The plants will close for the first two weeks of January, then reopen Jan. 15 at lower production, he said.

"The SUVs are still selling reasonably well, but the inventories were getting high," said David Healy, a Burnham Securities Inc. analyst who doesn't rate GM and owns some of its shares.

"They're taking a realistic look at the future outlook for this segment."

GM is scaling back at the SUV plants as part of its 9.2 percent cut in North American production announced Dec. 1.

Chief Executive Officer Rick Wagoner has said the Detroit-based company plans to increase revenue by attracting more buyers through a strategy that emphasizes lower prices and fewer incentives.