GM’s market share in the U.S. and Canada fell in 2012 to historic lows:
- U.S. market share fell to 18 percent in 2012 from 19.6 percent in 2011 after sales rose 3.7 percent for year
- Canada market share fell to 13.5 percent in 2012 from 15.3 percent in 2011 after sales fell 6.6 percent for the year
But General Motors is not concerned about dropping market share in the regions, and is instead focused on building its business profitably. For starters, the decline in Canada — where GM fell to the third position behind Chrysler and Ford, was mostly caused by lost sales of the Pontiac brand, which was notoriously unprofitable — resulting in its demise during GM’s bankruptcy reorganization. GM’s inability to replace those sales in the short run, along with noncompetitive lease rates, resulted in it dropping behind Chrysler for the first time in 87 years.
However, GM has a plan in place that will change its course while rebuilding sales profitably, rather than chasing after marketing share. The plan, which includes an aggressive rollout of new models, goes into effect in 2013.
“To grow it back the right way, we really paid attention to residuals, resale value, and pricing,” Reuss said.
The General’s Chevy brand will introduce at least 13 in models in 2013 (globally), while Cadillac will launch the all-new CTS and ELR, while GMC will launch the all-new Sierra pickup. Many of the planned models compete in high-volume segments, having the potential to significantly increase GM’s market share and profitability at the same time.
The GM Authority Take
This is a hallmark strategy of the New General Motors that we’re very glad to see. Whereas Old GM would chase market share with huge discounts and other incentives only to decrease its own profits and diminish the resale value of its cars, the New GM seems to have the patience, self-control, and composure to execute a long-term strategy wherein market share may drop in the short run in the name of higher profits and market share in the long run. Now that’s a strategy we’d be happy to support and praise.