GM says U.S. retail market share has bottomed

Reuters / December 7, 2006 - 9:00 am





NEW YORK -- General Motors' U.S. market share has bottomed out and new products such as crossover vehicles are going to help drive market share gains, GM executives said.

The company is also making progress in key negotiations on labor and contract issues with former unit Delphi Corp., though it has no timeline for completing a deal.

Asked about GM's U.S. market share, Mark LaNeve, its North American sales chief, said: "We stabilized it, and it's going to trend up." He added that GM's retail market share was about 22 percent.

"I believe that is the bottom," LaNeve said at a GM holiday event in New York on Wednesday, Dec. 6. "We think we're going to gain incremental share with some new products we're bringing into the market."

He expects annual production of 120,000 to 130,000 of GM's new crossovers -- vehicles combining the properties of cars and SUVs such as the GMC Acadia, Saturn Outlook and Buick Enclave -- and said industry sales of crossovers were expected to reach 3.5 million by 2010, from about 2.5 million now.

LaNeve said the company was focused on strengthening its key brands, retaining customers, and working to create the perception among consumers that GM vehicles represent value, without resorting to short-term sales incentives.

GM's reduced emphasis on fleet sales could pressure overall market share, which stands at about 24.7 percent, LaNeve said.

"I can tell you we intend to keep taking fleet down. That will be a drag," he said.

Separately, GM's top North American executive said talks toward a deal with parts supplier Delphi were a "top priority" for GM, but that there is no timeline for their conclusion.

"It's a top priority for General Motors to continue to promote this thing to move forward, and it is (moving forward)," said Troy Clarke, GM's president for North America.

"It is painfully slow, but slowly but surely the parties are coming closer together," he said. "We can't talk in terms of timeline because we don't determine it. There are other parties that do. But the sooner the better."

Clarke said GM's contribution on labor costs at Delphi would likely be toward the lower end of a range of $6 billion to $7.5 billion. GM has already booked $6 billion in charges in expectations of a deal.

Bankrupt Delphi has been negotiating for months with its unions, creditors and former parent GM to try to reach agreements on labor costs, the scope of its business, and eventual ownership of the parts maker.

Delphi in October 2005 filed the biggest bankruptcy in U.S. automotive history. It has blamed North American market share losses at GM, rising commodity prices and wage and benefit structures inherited from GM for its losses.

 

I just hope they're right.

They do have good reason to think this.

 

I like the complete use of the Toyota "Moving Forward" advertising campaign slogan. Damnit.

 

Since that was in parenthesis it was likely added for clarity. Mark's comments probably stopped at "...it is."

 

Yeah, I hope they are right. There's so much momentum at GM right now, it has to eventually pay off. Market share can only go two directions, up or down...at some point it has to go up.