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 Last month, it named its first female CEO and automotive writers on
Monday voted the Chevrolet Corvette Stingray and Silverado as car
and truck of the year, respectively.
Yet the "new" GM remains bedeviled by a decades-old problem:
stagnant or sliding share of sales in its home market.
The past two years have seen one of the biggest new-product blitzes
in company history; GM has launched new products to replace 70
percent of its U.S. sales volume since 2011.
But GM's U.S. market share remained stuck at 17.9 percent last year,
the same level as 2012, and down from 19.6 percent in 2011, when it
was only two years out of bankruptcy.
While GM executives voice optimism that the company will soon post
gains, they acknowledge that changing perceptions after decades of
lackluster products will take time.
"Market share increases are not instantaneous," Mark Reuss, GM's new
chief of global product development, told reporters at the Detroit
auto show on Monday. "We've got a lot of baggage. Don't
underestimate what people thought of us, or these brands, through
these hardships and 30 years."
There are other issues too: rapid-fire executive turnover in the
company's marketing ranks, factory furloughs for retooling to
produce new models and, on a more positive note, a newfound pricing
discipline that puts profit ahead of market share by reducing costly
buyer discounts and low-margin fleet sales.
"Our third-quarter (profit) margins ran over 9 percent," said Reuss.
"That's a big deal." Indeed, the company's profit has rebounded
sharply after the disastrous 2009 bankruptcy.
DECLINING CHEVY, FLAT CADDY
Still, some numbers are startling. Today GM's entire U.S. market
share is just over half what Chevrolet, its largest single brand,
enjoyed in the company's heyday 50 years ago, when GM accounted for
more than half of all U.S. car sales. Back then, GM's market share
was about twice as much as Ford Motor Co's <F.N>.
While GM remains America's No. 1 car company, as measured by sales
volume, its lead has shrunk to just a couple percentage points over
Ford, which still ranks second, ahead of third-place Toyota Motor
Corp <7203.T>. But Ford, unlike GM, has increased its share modestly
in recent years.
Ford, however, has less baggage than GM. Unlike GM, Ford did not go
through bankruptcy and a government-funded bailout. And its
marketing ranks have not had anywhere near the level of turnover as
GM's.
The turmoil started with the August 2012 departure of global
marketing boss Joel Ewanick, followed by the departures last year of
Cadillac global marketing head Don Butler and Chevrolet marketing
chief Chris Perry. GM last year hired Tim Mahoney from Volkswagen
North America to become Chevrolet global chief marketing officer and
former BMW <BMWG.DE> executive Uwe Ellinghaus to be Cadillac global
chief marketing officer. Last week, it promoted Paul Edwards to
succeed Perry at Chevrolet.
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Chevrolet remains a huge concern. In the past two years, Chevy has
seen its U.S. market share decline to 12.5 percent from 13.9
percent, despite launching such important redesigned models as the
mid-size Malibu and full-size Impala sedans and the full-size
Silverado pickup.
"Chevrolet is really struggling," said Larry Dominique, a former
Nissan Motor Co Ltd <7201.T> executive who heads leasing specialist
ALG. "Stingray being named Car of the Year is great for the Corvette
brand, but it probably doesn't help Chevy dealers sell more Malibus
or Cruzes."
Cadillac's U.S. market share also is flat from 2011 to 2013, at 1.2
percent, even though the brand added two new sedans, the compact ATS
and full-size XTS, and redesigned its volume model, the CTS.
Dominique said buyers of Asian and European brands do not tend to
cross-shop GM's four U.S. brands: Chevrolet, Cadillac, Buick and
GMC. And GM dealers tend to be clustered more in the Midwest, the
traditional heartland of its audience, while the import brands
dominate the coastal markets.
"We want to grow GM and that means growing market share and profits,
but it's not at all costs," said Reuss, who until his recent
promotion had been president of GM North America since the 2009
bankruptcy and reorganization.
FOCUS ON RETAIL
GM still has among the highest average sales incentives in the
industry, but it finished 2013 with the highest average transaction
prices in its history, said Alan Batey, who has been interim global
marketing boss since Ewanick's departure and succeeds Reuss this
week as president of North America.
Batey said GM has been putting more emphasis on sales to retail
customers while limiting sales to lower-margin fleet customers.
"Our focus has really been on retail and that's where we've got the
growth," Batey said.
"I like to think of market share as an output, not an input. But I
think with all the great things that are going on, the momentum
we've got, there's no reason why all four brands cannot achieve a
gain, year-over-year increases."
(Additional reporting by Paul Lienert in
Detroit; editing by Matthew Lewis)
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