“Design is the key differentiator between your products and the other guy’s,” declared General Motors “car czar” Bob Lutz, during a mostly off-the-record background briefing in which the automaker gave a sneak peek at a dozen critical, upcoming products.
During that session and another briefing, the next morning, Lutz conceded that GM has, in many instances, missed the mark on product trends, such as hybrids. But the biggest challenge for the automaker — and the biggest opportunity — is to regain a lead in terms of design.
“Design,” explained the septuagenarian executive, “has to lead the creative process.” Though the key focus is on exterior design, Lutz stressed that GM is working to sharply upgrade its interiors, as well. Exteriors, he noted, may attract a buyer, but an attractive, well-executed and ergonomic interior helps keep a customer loyal.
To achieve its product targets, GM has completely reorganized its product development system, Lutz and other company officials said. Instead of operating a loosely knit network of regional design and engineering centers, GM has now assigned individual regions to play the lead in specific product segments. Korean-based Daewoo is handling the smallest passenger cars, for example, while the
Referring to the recently-abandoned alliance talks with Renault/Nissan, Lutz said, “We don’t need an alliance to achieve (these goals)….because, for the first time in our history, we’re forming the alliance within GM. We don’t have to argue with anybody about who gets what. (This way) it’s all flowing to the bottom line of GM.”
The background sessions were clearly intended to give skeptics within the media and analyst communities a sense that GM is finally moving in the right direction. If that message was missed, officials pointed out a number of recent achievements. CEO Rick Wagoner, for example, noted that there has so far been a $4 billion improvement in GM’s bottom line this year, “which has largely been driven by our North American business.” The company has effectively achieved its goal, he said, of reducing operating costs by an annual $9 billion.
Meanwhile, sales and marketing chief Mark LaNeve pointed out that GM is the only one of the domestic brands to cut incentives this year, by an average $700 a vehicle. At the same time, residuals have risen an average eight points over the last 18 months on GM products, helping deal with “a big area of disadvantage for us historically.” That has, in turn, allowed GM to nudge up pricing, said LaNeve, in every product niche except the highly competitive mid-utility vehicle segment.
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