GM Focused On Profitable Growth, Not Chasing Pointless Market Share
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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.
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Also need to remember 2012 was a comeback year for Toyota, Honda and other Japanese brands that were hit in 2011. 2013 should be a much more “normalalized” year.
Is there a way of getting editing added to this site?
That’s a feature we’re working on, @62vetteefp. We’re looking at a few weeks/months for complete deployment. Thanks for hanging in there in the meantime 🙂
Alex
Not worried about market share ?? This doesn’t happen by throwing a bunch of new models , it comes from having the right product in the major sales segments , over the long haul .. They fell to third place in Canada simply by not having sub and compact and Honda Accord , Toyota Camry sized products that had been growing in refinement and customer desirability over the years . Canada and much of the European nations have been paying 4.00 plus for fuel for years . It has got so that these companies don’t compete with GM , they compete with each other , GM isn’t even in the same ballpark . Here’s an example of what the biggest GM dealership did to get sales in Canada’s richest province…this two block long massive GM dealership family opened a Nissan dealership on the end of the lot , it did so well , they moved it to a large new dealership two blocks away , several years ago opened a Kia dealership at the back of the lot and it did so well , opened a Suburu one as well . This is a long time family operation that has some very smart people running it . GM didn’t have the products that customers wanted and needed !! GM had a best seller in the compact line , the Cavalier coupe , in particular , with the cute bustle rear , lots are still on the streets here .GM cancelled this best seller , introduced the Cobalt , which was built to a pricepoint , CHEAP , it didn’t match up to the more refined imports and it too was cancelled . How’s that for intelligent marketing sense ?? Now they had what ? the AVEO ? More importantly , what did the happy owners of the Cavaliers think to find their valued cars were discontinued ? What happens to customer satisfaction , to resale values , to obtaining replacement parts , etc ??The big killer in Canada , as well , was GM not regularly refining its 1/2 tons . Both Ford and Chrysler understood how important this segment was to its market share and steadily refined their products such that their sales and customer satisfaction are number 1 . The Ram was voted top 1/2 ton for 2013 by Motor Trend . GM did an upgrade to the 3/4 ton , but it was too little too late . The new one for 2014 looks good now but Ford , I’m sure will be ready . Weeks ago I forecast that the one thing GM didn’t address was weight , predicted Ford would shed at least 500 lbs and with that great turbo V6 offer unparalleled fuel economy and better performance . It turned out a couple of weeks later that they announced that their pickup will lose 700 lbs m/l . My call is that the turbo V6 gas and a new V6 TURBO DIESEL will power most applications and only one V8 gas and one V8 turbo diesel will be offered . Growth in market share and volume doesn’t come overnite , its being in the market segments with competitive products and refining those products regularly with a mission to be the best . This builds customer sales/ satisfaction and grows brand awareness for the long term . Ackerson said , lately , on the introduction of a new model , I can’t remember which , the Impala perhaps , that the new model would do okay , it was in a tough market segment . It isn’t the market that’s tough , its that GM hasn’t been growing/refining its product to match the competition which has been nuturing/growing its market segments for years and is getting most of the sales….you snooze , you lose !!
The Cavalier’s J body was garbage, no contest. It’s B-pillars would have been stronger if they were made of paper. The Cobalt was infinately better, and subsequently Delta 1 and Delta 2 platforms build off the rigidity that the Cavalier could only dream of.
By the way, those Cavaliers you see around lay credit to the venerable 3.1, as I’m sure you’ll notice that their bodies are rusting away while the engine still rolls on.
And don’t lie to me for a second and tell me that Mopar had anything compeditive in the compact or subcompact segment in just the last 5 years. The Caliber? They couldn’t give those things away; it had nothing on the Cobalt, even in the hi-po models. As for the Aveo, at least GM tried with a subcompact entry; Mopar didn’t even bother.
But you’re still out of date if you think the Cobalt and the Aveo matter anymore. Both are long gone and have been replaced with superior cars; cars that outclass a Cavalier in technology and build quality. Both traits the Cavalier never had, not to mention it’s inferior safety record.
The J bodies are dead and gone for a reason; they sucked. Sure GM could have keep the NAMEPLATE and move it to Delta1, but the Cavalier name was far too damaged and stained by it’s inferiority to be salvaged.
So gio ahead. Tell me why a car built on a 30 year old platform is better than anything built on Delta 2. I’m sure you’ll have the most convincing arguments.
Yeah, 2011 cruze was such a winner and really performed well without issue.
Usayjim, dude what… Here you go again with Cavalier, oh my gosh seriously… One of the main topics of this story is resale value. Did you read the story… Belting out as many crapaliers as GM could did not wirk so well for GM. It diminished the resale value as these cars were common on the rental lots… The cars build quality and interior quality was horrific, GM is light years from this phase, resale levels for GM products is much improved…
GM is smart here as they had all the market share in the world and lost it all due to no profit.
You learn and tool your line up for profit then once you have the money you invest in market share. This is how VW has grown as they have.
GM could go back to the old ways and gain a lot of market share by dumping on the fleet market but that is a dead end.
GM needs to earn their way back in the market and trust of the public. This will take time and is a marathon so anyone wanting a fast result is going to be disapointed.
All the new models are to get GM caught up as they fell way behind on getting new product out over the last 15 years. They are still replacing models that should have been replaced years ago. The W body still being sold is a clue to this.
Also new segments are being created with vehivicles like the Encore and Verano. Buick needs product and why not inovate as they have nothing to lose and these smaller models will do fine overseas to make the investment back even if they fail here.
Well, you conveniently leave out GM leech UNION costs
nicely done.
Isn’t it smarter and easier to keep clients than to try and find new ones or win back lost ones?
Not when those clients are dying off or when you’re unwilling to invest in new technology that would appeal to more clients. Doing the “same old same old” isn’t anything to be proud of, it’s a death sentence played out over many years in which we watched GM wither.
Smarter and easier? More like dumber and lazier. It takes drive and dedication to find new clients and to make appealing products for them.
Proof? Consider Cadillac and Lincoln. Guess which marque opened up, let it’s old clients die off, invested in new technology, responded to present consumer demands, and has more appealing products?
(Hint: early A&S cost estimates were $10 billion. I’d say that helped kick start things.)
Market share is the result of an appealing product portfolio and a strong reputation. Avoiding discounts and wholesale rentals will help boost the reputation part. But even I, a long term GM fan, cannot find any of the current GM range that I want to put in my driveway. The lack of body variations and the uniformity of the delta shaped high waistlines with poor visibility leaves me totally cold.
Somebody at GM had better carefully analyse what has prompted Chrysler’s gain in market share, especially when many critics had written off the company three or four years ago. Marchionne has not filled his ranks with people from outside the industry as GM has done. Maybe there is a lesson in there somewhere.
Grawdaddy , you are right , there was lots to not like about the Cavalier , however , this model remains one of GM’s top sellers of any vehicles in its history . Started in 1981 thereabouts , it hit its stride in 1984,selling 462,000 and 383,000 in 1985 . Then between 1987 and 1997 it sold an amazing 2,500,000 m/l , the best in the US and Canada . Here in Canada , 1993 Cavalier sales marked the last year that a passenger car in our country topped the sales chart . From yr 2000 sales seldom dipped below 200,000 a year but no improvements of note were made until the 2004 model when that great 2.2 liter engine was introduced as well as many improvements , On Star was also available . This period finally saw Japanese imports, the Toyota Corolla , Honda Civic start to exceed Cavalier sales and begin to dominate the marketplace in the smaller car segments . GM was truly a great pioneer
in the compact car segment and don’t get enough recognition for their accomplishment . What is evident , though , is that the quality of production was hit and miss . Reading customer forums about this model is something else . Out of 4 stars about half the respondents had terrible chronic problems and gave it one star , the other half three or 4 stars and few problems . Indeed , Edmonds , gave it about 2 stars overall . To say that this J body was garbage really saying is that the over 3 million customers who bought this Cavalier from 1984 through 1997 were quite stupid . On the contrary , it took nearly 20 years before the Japanese would take it out . Toyota’s motto was customer satisfaction and reliability and this was a thorn in the side of GM , build quality . My personal last comment on this matter is that GM from about the year 2000 on , they appeared to be fielding so many models , as well as expanding the Saturn line with clones of other divisions products that not enough time was spent improving the quality and improvements to existing models . Ever want to read Lemonade reviews of the 2002 Malibu chronic problems , that model design made the all time list of lemons . Locally , My aunt and the wife’s best friend regularly almost monthly had their cars back at the dealerships for electrical problems that wouldn’t go away . I admire GM as our extended families drove nothing else from the 50’s through the 70’s My wife , though she loves her problem free 2003 Camry , her favorite car all time is the turquoise 57 Chevy she drove for years . I hope one day that they will concentrate their efforts on Chevy and GM , and instead of expanding their ever increasing lineup , spend that time to be more attentive to improving quality and reliability to better the competition with their offerings in the important growth market segments .The years when GM defined the vehicle marketplace are almost all gone . Due to high fuel prices and huge competition , your Ford, Chrysler , Japanese and Korean manufacturers are lean , hungry for more market share and are defining the market segments . GM gets into the specialty area very well with the Camaro , Corvette and Cadillac , but except for Camaro these are not high volume , quick turnover products that stimulate a lot of buyers , repeat customers and brand awareness . GM is a big boy and doesn’t need more negative comments , so I’ll move on to perhaps analyze golf balls , the season will be upon us in a couple of months , my arse should be thawed out by April , cheers , JC