Bank Of America-Merrill Lynch have released their annual “Car Wars” report, and it predicts slumping sales for GM and Chrysler. GM’s market share of 22 percent last year is seen shrinking to a mere 15 percent, which is significantly lower than the 18 percent number that GM admits to. The real butt-clencher? Merrill Lynch based its calculations on a 14m unit SAAR, which is much higher than the 10m SAAR that we’ve been seeing through the first half of the year. Which means GM’s losses could be even worse if we don’t see a return to those sales numbers soon. Even at a 14m SAAR though, the three percent discrepancy between GM’s numbers and Merrill’s would amount to GM selling half a million fewer autos than expected. The report places blame on weakness in GM’s new-product pipeline for the projected drops. GM’s Tom Wilkinson fires back at the Freep, arguing “we understand that analysts get paid to try to predict the future… but that doesn’t necessarily mean they are going to be right.” Gosh, can’t anyone just trust GM?
The Car Wars report also savages Chrysler, arguing that (like GM) a weak product pipline will bring Auburn Hills down. Again. Still. Merrill predicts that ChryCo will be half its size within a few years. Chrysler refused comment on the report, except to say “we have no plans to be half our size in the future.”
Meanwhile, the fact that Ford plans on replacing 99 percent of its lineup in the 2010-2013 window makes Merrill bullish on the blue oval. Ford is projected to pick up about 3 percent market share by 2013, joining Honda and Hyundai/Kia as the top-tier in projected market share growth. Toyota and Nissan are seen increasing their shares as well, although at a slightly slower rate. The European manufacturers should stay about level, according to Business Week‘s take on the report.
“Ford — with a relatively strong replacement rate and lower average showroom age — could continue to pick up market share because of a strong product replacement rate over the next four years of an estimated 25%.” Not 99%
“we have no plans to be half our size in the future.”
’cause zero is not “half our size”…
Hey, I just felt something tugging on my wallet!
Yeah, 99% would mean that the front third of a Ranger pickup would be the only product not replaced during that time…
GM having a weak launch portfolio in the next 6 months driving their market share down does not hold water. GM cutting 4 or 5 weak low contributing divisions off at the knees does. I’d say a 4% hit to 15% is pretty good considering the cost of maintaining the brands left by the curb.
Gm is launching a new Lacrosse,SRX,GMC Terrain,Equinox in the next three months along with the Camaro already launched. How can 5 new cars in the next 3 months be remotely called a weak launch portfolio. Thats almost as many cars as ford sells total in their portfolio.
Chrysler on the other hand has no pipeline anywhere in the near future. Its somwhere out there where you see that mirage while standing on a large piece of blacktop pavement. Save a new 300
Okay, GM is launching weak cars (see Camaro article below).
@ gmemployee,
The 5 “new” launches listed for GM cover not only car, but also SUV platforms. How can you make the jump that this represents nearly all of Ford’s model lineup? Ford has four CAR models(Focus, Fusion, Mustang, Taurus). In order to consider apples to apples, the new launches of GM compete potentially the Flex, Edge and Taurus X and also the Escape and Explorer. Hardly “almost as many cars as Ford sells total in their portfolio.”
It’s a good thing that Ford’s portfolio is small in this case:
Nobody will buy the Lacrosse outside of Hertz, regardless if it can compete with the ES.
The Equinox, Terrain and SRX are the same damn car. Having 84 brands with 41029 models based on 6 platforms is why GM’s in this mess.
Although the Camaro won’t tank, people got sick of hearing about it two years ago and it’s had anything but a smooth launch… zing.
Do the prognosticating pundits factor in folks such as I who were repeatedly spat upon by GM and its refusal (along with dealers) to repair defects while our new vehicle was within the so-called warranty period?
Do those counters of beans factor in the people us disgruntled ones influenced by warning as many folks as possible what they may confront if stoopid enuff to buy a GM vehicle… warnings transmitted at a multitude of Web sites and in “real life”?
It has to make a difference. For four-plus years I have spread the warning whenever possible.
I have heard others broadcasting the warning, also.
Corporate droids ignoring the warnings does not convert them to non-existence.
Hmmmmm….. GM advertising… I do not recall much braggadocio in regards to that aspect of the product.
Wasn’t the time/mileage extended? 5 years/100k?
If so, I do not see that at the forefront.
Maybe the consumer has been successfully warned about the so-called GM “warranty” to nullify the warranty as an effective marketing tool.
Still, I wonder if the consumer backlash and following non-organized individual efforts to warn others about the GM “warranty” has had a real effect that goes either unnoticed by GM and its lackeys or is noticed but goes uncommented upon?
the biggest trouble is the closing of dealers. that alone will drop GM to 10% market share. combined with alienated employees, retirees. and the worst goofball marketing that they seem to refuse to change (ie today’s extra $1,000 off old invoice), will cause GM to fail completely within 18 months.
without immediate and radical surgery, this company is done like a dinner. and it’s not the product that’s the problem.
15%. Hmmmm. To put this in perspective, this was where Chrysler used to hover from the 50s into the 70s, when all of the GM partisans used to snark about what a pathetic operation Chrysler was.
Hmmm. How does this all paint out if the US market stays no higher than 10mil units per year for the next 3 years?
This is an auto makers forecast I’ve heard from an excellent source who works for a major Japanese auto company.
I’m banking on Gov’t Motors and Fiatsler dropping faster than people think. As noted above, how many citizens are just furious over being forced to bail them out with their taxdollars and not by their choice. Let’s also add in numerous individuals who purposely avoid buying vehicles produced by the UAW.
Further, lets add that there is simply a glut of both new and used cars in the USA. How many folks have extra cars they want to get rid of during this down economy?
My crystal ball says the Obama excercise in “responsibility” has already failed on many fronts. Sure, let’s also recognize Bush failed by signing off on the first round of bailout monies.
Again, I know of no friends or family who have any intention of purchasing a GM or Chrysler vehicle.
Brutal.
Everyone I know is not considering the purchase of ANY vehicle. Which is still a big problem for GM and Chrysler.
Can the “New GM” survive on 1.5 million new units per year, built & sold?
That’s 15% of 10 million vehicles per year.
Can they survive on this level for 3 or 4 years?
My suspicion is that the answer is a resounding “NO”.
Not forgetting the “Studebaker factor”. People were concerned about Studebaker becoming an orphan (something that your friendly neighborhood GM, Ford and Chrysler-Plymouth dealers would certainly not be willing to disabuse you of – in fact they probably suggested it…) and so people shied away from buying Studebakers increasingly making it a self-fulfilling prophesy.
Paybacks are truly a bitch, eh GM? Kizmet… (aka “Karma”)
Plus, starting at the time of Studebaker’s final flame-out were the introductions of Japanese cars in the USA for those folks who didn’t prefer funky air cooled Volkswagens and wanted to eschew Detroit or AMC products.
Interestingly enough, how many CHINESE car manufacturers have been saying they’d be interested in selling in the USA? This will happen and is analagous to what happened in the 1960’s with Japanese imports into the US. I suspect that eventually, Chinese cars may even be built in the USA (probably in the south, outside of the UAW unless “The one” demands every factory is UAW by “executive order” – “Klop” – allo allo anyone?)
The high irony here is that GM itself is the primary importer of Chinese car parts, given that for several years, Buick Rendezvous, and later / still Chevrolet Equinox V6’s hail from – red China.
>>Do the prognosticating pundits factor in folks such as I who were repeatedly spat upon by GM and its refusal (along with dealers) to repair defects while our new vehicle was within the so-called warranty period?<<
As Ronald Reagan used to say: There you go again. You really don’t get it do you? Those problems you keep talking about are figments of your imagination which has been strongly influenced by vicious rumors started on the internet. GM cars are great cars. They don’t have problems that need to be fixed. People just think they do because of the false perception in the marketplace started by people like you! (Who ever thought it would be that hard to put your tongue in your cheek and keep it there?)
Regards,
As I watched GM axe numerous development plans I found myself wondering if they were aware that while killing yourself unintentionally by being stupid is not technically “suicide” it is still…well, stupid.
Hey, that man in the Presidential limo just grabbed my wallet! Police! Yeah, right.
Bunter
“the biggest trouble is the closing of dealers. that alone will drop GM to 10% market share. combined with alienated employees, retirees. and the worst goofball marketing that they seem to refuse to change (ie today’s extra $1,000 off old invoice), will cause GM to fail completely within 18 months.
without immediate and radical surgery, this company is done like a dinner. and it’s not the product that’s the problem.”
Buickman nailed it. Exactly right.
Menno, the US will be a second hand market when the Chinese get what they want. You don’t build second hand cars except Cuba
Wait until angry Pontiac owners leave GM in droves. Remember, all those used Oldsmobile’s filling up Hyundai dealer lots earlier this decade. GM didn’t think they would gain marketshare by losing close to 300,000 customers.
This has been the problem with the GM/UAW Bailout from the start. GM’s business model was unsustainable at 20% of a 16 million SAAR Market. Without radical changes, they aren’t going to be able to survive at 15%/12 million SAAR. But of course, as long as they’re receiving .gov $$$, there’s no urgency to make radical changes.
They should have been forced to restructure with out Uncle Sammy’s tit in their mouth. Instead, we’re subsidizing an unsustainable Company as a political payback to a connected labor union.
One thing to remember is that last year when GM was slouching toward oblivion, it pretty much shut down R&D on everything that wasn’t already done, or named Volt. That means GM will have about a 2-year gap in new product intros starting about the end of this year. Except for that Volt thing, GM will meet 2012 with the same stuff they have now (just less of it).
I have not always agreed with Buickman. However, I must give him credit for being out front on the issue of what GM’s dealer policy is going to cost both the company and the taxpayer.
Some of the best dealers in the country are moving away from any GM exposure, even for Chevy. The canary has stopped singing in the coal mine.
This should be something that factors into the debate heading into the Senate on the pending bill to revisit the dealer terminations. Buickman, have you talked to your senator?
I tried in vain to convey the damage that GM is doing by culling dealers on another thread. I’ll repeat one anecdote here: GM elected to terminate all but one of the Caddy dealers on the SW side of Michigan. You now have a situation where GM has abandoned markets where they were the only credibly luxury option for decades, and their installed base now faces driving at least an hour for service.
You have to wonder who thought this was a logical market strategy.
The saddest part is that the best dealer in the area who lost Caddy found a new tenant…Honda.
If it wasn’t going to cost us even more taxpayer dollars it would be laughable.
Lets just hope GM can maintain a 15% marketshare.
It won’t be easy since they will lose over 300,000 customers from “bad GM”.
Maybe Fritz can order some 15% marketshare pins to get moral up.
Gm is launching a new Lacrosse,SRX,GMC Terrain,Equinox in the next three months along with the Camaro already launched. How can 5 new cars in the next 3 months be remotely called a weak launch portfolio. Thats almost as many cars as ford sells total in their portfolio.
Wow – no wonder GM are in the doggy doo – they can’t even spot that the amazing new cars they have are made up of 3 CUV’s based off the same platform – great car line up guys!! The remaining one has a Chinese interior that will sell a couple of hundred a month if lucky.
Sorry GM – you are done for. Another limp sales period followed by a trip back to your favorite courthouse will follow.
Ford however is sitting mighty pretty. All new car line up right now and even more to follow in the next 12 months – there is simply no comparison.
@Tedj101,
“As Ronald Reagan used to say: There you go again. You really don’t get it do you? Those problems you keep talking about are figments of your imagination which has been strongly influenced by vicious rumors started on the internet.”
Come now, we all know that the internet was created by Al Gore, two Presidents after Ol’ Ronny!
;)
15%. Hmmmm. To put this in perspective, this was where Chrysler used to hover from the 50s into the 70s, when all of the GM partisans used to snark about what a pathetic operation Chrysler was.
Not only that, but Chrysler was profitable, at least some of the time, with 15% market share.
GM needs to stop worrying about market share. They need to worry about making money on every unit sold.
With their current business plan – give away all the profit in the form of incentives – less market share is less unprofitable.