You know, I really couldn't care less if Toyota sells more cars than GM.

What's important to me is that GM (and to an emotionally lesser extent Ford and Chrysler) remain profitable, and that they learn how to scale with demand.

What's BMW's market share? <5%? Does anyone ever discredit them for that? No. Why? BECAUSE IT DOESN'T MATTER.

Build great cars. Do it efficiently, and make sure that the manufacturing process is scalable.

Nothing else matters.

 

I agree with you to an extent, however:

- a companies health is often judged by its growth.
- reduced volume requires downsizing which can be costly and disruptive.
- the same retiree costs get sucked out of a smaller pool.

IMO GM and Ford need to establish a realistic baseline for volume and adjust their infrastructure to be adequate for that volume, and then grow from there. It's very difficult to profitably manage a company that has continually dropping revenues.

 

100% Agree. PROFIT is what pleases shareholders, and is the best food for growing new products.

 

I think the big reason market share has been a big topic is becuase of how far the domestic brands have lost. GM having 55% in 1955 and hovering at 20% today is a drastic change.

Another point for Market share is the $$$ connected to each percentage point and how that translates into sales. GM will be judged on sales not profit and loss when the No. 1 automaker is determined.

But I agree that making great cars for a profit is the key. There is plenty of money to be made at sales and market share levels far below GM's. But health care and pensions don't get smaller even if GM does. So they are cought with high overhead and capacity but decreased market share that translates into reduced earnings.

 

Worldwide marketshare is kinda an irrelevant topic here, IMO, because its basically decided on which Chinese or Indonesian subsidiary sold the most $6000 cars.

Domestically it matters mostly because GM set a whole bunch of growth targets (30% IIRC) in the 90s and then failed to meet them, which was a spectacular strategic mistake. Otherwise poSSum pretty much nailed it -- it is expensive to shrink. (Closing Olds cost what, $1B?)

 

I generally agree with all that's been said.

...BUT you don't want GM to shrink. As been said, it actually costs to shrink, factories close or layoff, people loose jobs.... GM ends up going overseas to further cut costs....

Economies of scale, it's cheaper to make A LOT of product than a little bit of it.

 

Agreed, shrinking sucks.

However, Honda and Toyota are here to stay. They've proven that they know what they're doing, that they can make cars for a profit, and that their manufacturing processes can scale (although they only seem to scale upward).

In the future, I foresee GM, Honda, and Toyota sharing similar amounts of market share. That's fine with me. In fact, I hope that it's more than just those three. I'd like to see Ford and Chyrsler on that list, as well as Nissan and Hyundai. Competition is good, and I don't want GM to get so far ahead that they get cocky again and stop feeling the need to design great cars. We've seen that happen once, and once was one time too many.

 

I wonder how 20% of new car sales today compares to 55% of car sales in 1955 in net units. Don't have time to research, just something to think about.

 

Its Wikipedia, so take it with a rather large grain of salt, but here you go...

http://en.wikipedia.org/wiki/U.S._Au...uction_Figures

 

Nice idea and one that GM would gladly take but right now they are fighting for their very existance much less getting ahead and being cocky. Those days are long gone!

 

Are you confusing GM and Ford?

They're not in a position to be cocky, but I wouldn't say GM is "fighting for their very existence." The turnaround is almost complete, and there are several GM cars you can buy today that are competitive with the very best out there. The full-size trucks are first rate. Corvette is as strong as ever. The latest revisions of CTS and STS are excellent. Impala is really nice, and so is the Grand Prix GXP. Sky is a low-volume car, but really nice. G6 is pretty nice, and Aura received some very favorable reviews.

Coming down the line in the very short term, we have G8 and Malibu looking to stir things up, and a little further off, we have Camaro coming. There's a new Aveo due soon, the Ion is being replaced by the Astra. Acadia, Outlook, and Enclave were released to rave reviews.

Oversized, absurd, and thirsty as ever, Hummer continues to sell well.

There are still a few cars that need work. Colorado and Canyon have pretty much ruined GM's standing in the small pickup market. Cobalt doesn't measure up to Civic (although the SS Supercharged is a strong performer). DTS is long overdue for a refresh (and it's coming). LaCross and Lucerne are decent, but lacking when compared to their competition from Lexus and others.