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GM Sees 2007 Sales Gains


 

 

At least three General Motors divisions should post retail sales gains for 2007, forecast Troy Clarke, head of the automaker’s core North American operations. In an interview with TheCarConnection.com, the GMNA president said he expected sizable improvements for Buick, Chevrolet and Saturn because “Those are all brands where we have key product launches” during the coming year, including such entries as the new Buick Enclave, the updated Chevrolet Malibu, and Saturn’s next-generation Vue crossover. Clarke said he is hoping that retail sales for GM’s other U.S. brands will be, at the very least, flat for the year, though there are opportunities for gains elsewhere, including Cadillac, which is readying a revised version of its CTS sedan.

The GM executive stressed that the company is putting emphasis on the retail side of the sales equation in 2007, accepting it will likely lose some share as it trims back on fleet markets, particularly to the low-margin daily rental companies. It has also been trying to maintain more discipline on incentives, steering clear of quick-fix campaigns, such as the employee pricing programs of 2005. Those fire-sale programs temporarily boosted volume but ultimately led to severe “payback” periods, while hurting brand image and slashing residual values. This “more robust” approach, suggested Clark, has already led to an upturn in GM’s average transaction price, and there are signs it is positively impacting residuals, as well.

During the recent Detroit auto show, several senior GM executives indicated they’ll be pushing to cut costs still more during 2007, even after achieving a $9 billion reduction in fixed costs. But there appears to be no immediate need to eliminate more plants or trim the North American workforce – with the exception of productivity gains fueled by natural attrition. There’ll be “no letting up” on cost, said Clarke, but in 2007, the big emphasis will be on “going after the revenue side of the equation.”

With previews of hot new products like the Malibu , CTS, and Chevrolet Camaro convertible, GM grabbed a disproportionate share of headlines at the 2007 North American International Auto Show, but Clarke was quick to say that “Nobody’s claiming victory. The turnaround is gaining traction, but we’ve still got a lot to do.” Part of the challenge is to improve GM’s image, particularly on the east and west coasts, where the automaker has been hammered by its Japanese archrival, Toyota . Part of the U.S. maker’s strategy has been to go after areas where Toyota is strong, including both mid-size passenger cars and hybrids.

 

One of the Detroit show’s most widely-covered announcement was the unveiling of the Chevrolet Volt, a so-called plug-in hybrid. The prototype’s large lithium-ion battery pack would store enough energy to drive about 40 miles without firing up Volt’s internal combustion engine. But for longer drives, it would automatically switch to gasoline power, giving essentially unlimited range and solving one of the problems with a purely electric vehicle, such as GM’s old EV1.

 

Clarke discounted skeptics who have questioned whether the Volt is just a publicity stunt. “There’s tremendous demand for cars in the world,” he noted, pointing to booming sales in markets such as China and India . “To think we’re going to allow the (global car) market to grow and only fuel it with petroleum is absurd.” Like other GM officials Clarke insisted Volt the PHEV into will go into production when there is a suitable battery.

 


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