Back in October, GM’s then-CEO Fritz Henderson announced that GM would make a stand on market share, refusing to allow its share of the US market to slip below 29 percent. Oh wait, that was Gary Cowger’s campaign of 2003, which saw GM execs wearing symbolic “29” lapel pins. Where Henderson actually drew GM’s market share line in the sand six months ago was
At this point about 19 percent… We’ll finalize that, but I’m not interested in going down from that
And according to the Detroit Free Press, GM actually achieved that goal in December, logging a 21 percent share based on Autodata findings. Unfortunately, things have been slip-sliding ever since. In February, GM’s share fell to 18.1 percent, and last month it fell even further, to 17.6 percent.
Of course, having Toyota fighting its way out of some bad publicity with unprecedented incentives didn’t help… except that GM’s average incentives were nearly $1,000 higher than Toyota’s. And with GM’s turnaround plan based on an 18.5 percent share of a 12.5m overall market, this share slide would be dangerous enough even without real fears that the market won’t even hit 12m units this year. The fact that this troubling performance has come at the expense of consistently industry-leading incentives does not leave one sanguine about next month’s release of GM’s Q1 financials.
Analysts smell trouble, and apparently feel no need to sugar-coat it. As Barclay’s Capital’s Brian Johnson said of The General’s March performance:
GM’s passenger car performance was materially weaker than we expected
Erich Merkle of Autoconomy never even expected GM’s market share to recover to Fritz’s line-in-the-sand level, saying:
GM for some reason always has these critical market-share milestones that they put in place for themselves, then they blow through them. The real focus for GM has to be being profitable
And sure, GM can (and probably will) cut costs to squeeze as close to a profit as possible, but IPO investors are going to want to see more than just belt-tightening. If GM doesn’t start making headway expanding its business, and do so without increasing incentives past their already-industry-leading levels, there’s not much hope of attracting the kind of investment it needs to pay back the government for its equity stake. On the other hand, GM is going to struggle to win over consumers until it is free of its political entanglements. And with decades of market share decline having gone unchecked by the words, deeds and lapel pins of GM management, it’s clear which way the momentum is heading.
At this point about 19 percent… We’ll finalize that, but I’m not interested in going down from that.
In other breaking news, after colliding with an iceberg, Titanic captain Edward Smith reportedly stated, “I’m not really interested in the ship going down below the surface of the sea.”
Now watch as Whitless and Docherty spin this via more sappy commercials and unsolicited emails.
(“Over the past year, we have maintained our foothold over 20 percent of the American automotive marketplace. Er, I mean 19… 18 Percent? Less? Jesus. Someone take the calculator away from Susan.”)
How much money did Ford make in Q1 again? LOL. Admittedly, GM has some successful models… that they can’t build enough of due to self-inflicted constraints on production. That makes me chuckle most of all.
I can recall Roger Smith making the declaration that GM had every intention to fight back and retain the 50% US market share it once had.
Right away, you read that and think “that’s a stale and totally out of date factoid to bring up”.
….and years from now, people will look at back the 19%, 18%, 17% lines in the sand and think the same thing.
I also recall Rick Wagoner making the proclamation that GM will be solidly profitable in 2010. We saw how that worked out.
Does this slide include the brands GM discontinued? Remember GM was eight brands at it’s peak, when you halve that your overall sales numbers and share are going to drop.
Good point. What was GMs market share for just the 4 core brands a few years ago? A decade ago? Of course the General is trying to make up for lost sales by stuffing volume through Buick. Let’s see how well that works.
TriShield, I hate to break it to you, but GM is smaller for a reason. I have gotten pretty tired of them slicing and dicing their numbers – using “core brand” figures when it suits them and total sales when they feel like it. At some point, GM has to face the music and realize that it is no longer king of the hill. They need to take the sales hit from the bankruptcy/downsizing/new company thing, stop whining about it, and move on.
Not much. But the buyer are redirected to the re-badged models anyway. If some of the brands are not cut, the so called “core brands” will see a even lower sales.
That’s nice jp, but to have accurate picture of how GM is doing that would be pertinent information to know. GM is going to lose sales because they discontinued brands. What I would like to know is if the brands they still produce are gaining share or losing it as well. From what I can tell this story doesn’t tell us that.
The interesting thing to me is that even with the halving of brands, GM’s product plan timing still looks like the old feast-then-famine approach.
Chevy- getting Cruze, Equinox and Camaro boost now then a delayed wait for malibu, impala
Cadillac – big hole in a year
Buick – lots coming but costly repositioning from advertising (and robbing cadillac of marketing dollars in the old Saturn vs old brands kind of way) but then a big gap in 3 years
GMC – Granite? hmmm.
How many Hyundai brand cars are coming in the same time? Seemed like lots the last time I checked.
I think its entirely fair to compare back to the 8 brand days. Those brands were discontinued because of massive overlap with other GM brands.
Ok maybe subtract SAAB from the mix, Hummer fell off a cliff before they got rid of it so it shouldn’t change the overall numbers too much anyway, But Pontiac and Saturn buyers are most likely cruising Chevy lots now.
But wait a minute…didn’t they just blast us with the good news that they had repaid the debt, in full and ahead of schedule, no less? All that while LOSING market share? Amazing levels of efficiency we’re seeing here…
Ya, they repaid us by borrowing our Mastercard!
Good move Big Ed and Prez Goodwrench.
Bunter
IIRC GovMotors has also been piling on the fleet sales. Just wait until that saturates.
Trishield-I think those figures are for all 8 brands. They lose a point or two more with the four left standing.
Bunter
One quarter doesn’t make a trend. But, for sure, GM’s marketing isn’t helping. Rebuilding Chevy’s image as America’s standard-bearer is a huge job and more so (the way I see it) with the Cadillac/Buick/GMC distraction. One of history’s great nameplates, Impala, is being left to whither for another three years. Cruze is a new name with no recognition. Malibu needs an updating yesterday to keep buyers paying attention. Aveo too. Spending engineering and ad dollars on Terrain, Cadillac and LaCrosse is not going to help the long-term market share fortunes of Chevy and, therefore, GM as a whole. Maybe GM can do it, but I have a feeling we’ll be revisiting GM’s brand strategy down the road when Chevy (what’s left of it) and one other brand will be kept and the other two discarded.
Exactly. The gov asked, “what are you going to do to get back to profitability?” And they answered: “Bland crossovers. Lots of them.” Even their more mediocre money-grubbing strategies to instill a BIT of consumer confidence – nameplate recognition (Impala, Malibu), dealer incentives, and good warranties – have been all but scrapped. I need to short thee guys soon.
Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them. – W. Edwards Deming
Detroit is paying dearly for decades of corner cutting, foisting crap on the public and abusing customers. Many hold its wares in contempt. They won’t even look at them! The domestics delivered just 20-percent of the 2009 passenger vehicles sold in Canada, a staggering drop from their 95-percent market share in 1955 and 50-percent share in 2000. Toyota and Honda have 16.4 percent and 14.6 percent market shares respectively. General Motors’ (GM) market share has plunged by almost half since 2005. Ford and Chrysler have fallen out of the top five passenger car sellers. Chrysler, which held 7.8-percent of the car market in 2005, has slid to less than three percent and dropped to tenth place behind Mazda, Nissan, Volkswagen, Hyundai and Kia.
Asian manufacturers dominate Consumer Report’s 2010 reliability ratings. Honda, Toyota, Mitsubishi, Hyundai and Porsche are the top five in that order. Ford is middle ranked followed by most European automakers. GM is second from last and Chrysler is dead last. An honest, broad 10-year warranty would improve purchaser comfort and sales, but the Detroit Three lack sufficient confidence in their products to provide one.
Where do those numbers come from? This from a CBC news story earlier this month:
“Year-to-date, the combined market share of GM, Ford, and DaimlerChrysler nameplates in Canada was 56.9 per cent.”
GM said prior to discontinuing the brand that they might from time to time issue a Pontiac badged car as a special edition.
I wonder under which main brand they would tally those Pontiac sales.
It depends on what it is that has been re-badged. :) (Please god let it continue to be Holden brand stuff.)
Such target are useless, because no one is held accountable.
How about congress pass a law that, if GM’s market share drops any further, shoot every single GM employee (no, you can’t quit).
Trust me, it will work.
I guess we can kiss that 50 billion that GM owes us taxpayers goodbye.
We could have kissed it goodbye the moment Dubya, then Obama, signed the checks to GM.
Nice Paul Simon reference. It’s quite appropriate:
“Slip slidin’ away
Slip slidin’ away
You know the nearer your destination
The more you’re slip slidin’ away
…
God only knows
God makes his plan
The information’s unavailable
To the mortal man
We work our jobs
Collect our pay
Believe we’re gliding down the highway
When in fact we’re slip slidin’ away”
Criminy, GM, how could you have been so stupid! So many great cars, fading into history.
So what models tanked? Something must have, as the SUV plant they used to share with Suzuki is reputedly running full time to meet demand.
An IPO ain’t gonna happen. If GM can’t make money now, with its debt cleared, it will never make money.
Welcome back, RF.
I won’t rule out a successful IPO. Not that I see anything good about GM. Just that the government had so much control over everything now. It’s not hard to imagine that Obama force GS/MS to help with the IPO, and then dump all that stock into a number of group pension funds.
Good to hear from you Robert.
wsn
The only way an IPO can “work”: if the feds prop it up with YOUR tax money. Again. Still. I don’t think the political climate will allow it. The bailout daze are over. Which means GM will wander in the wilderness with a little suckle here, a little suckle there—until it breaks up and/or withers and/or rolls over and dies.
I do believe this is the way it will go. My prediction for the next GM nosedive remains 2013 or 2014. Selling hybrids or money-losers like the Volt and Converj will only accelerate their demise. These are not “cars Americans want”, to quote the President.
Even Chrysler may outlast them, since it receives oxygen from Fiat.
Moses had more luck getting Pharoah to change his ways.
Wait a minute. Weren’t the (alleged) best and brightest around these parts forever chastising GM for chasing market share instead of focusing on a return to profitability?
When a company sheds brands and closes hundreds of dealerships, should it really surprise anyone that market share would decrease?
So where are these (alleged) profits at then? They’re still losing market share AND still they’re losing money. Their CEO is still focused on market share over profits. They’re still losing money and now they aren’t meeting his goal of market share percentage. They should be focused on profitability, but I haven’t seen anything from them that says they are. It’s market share, market share, market share.
The problem is GM’s market share is downsizing faster than the company. That isn’t a good sign for profitability.
Well, it’s not all that hard to find out how GM’s core brands are doing–it just requires linking to the enemy’s site:
http://www.autoblog.com/2010/04/01/by-the-numbers-march-2010-get-off-my-back-edition/
GM is stupid to make market share predictions that it cannot possibly be sure of meeting. That said, what matters is profit, and we’ll really need to look at a full year’s worth of figures to know how they are doing. Instead of debating about things that haven’t happened yet, let’s see if the revamped GM can actually improve the way it manages its money and its product launches.
I just happened to recall that Rick Wagoner said that “Bankruptcy is not an option”
True dat…it comes as standard equipment.
Was suprised to find out the new Buick Lacrosse was the heavyist
US (sedan) car (includes Cadillac DTS) built.
Well, the autoblog guys seem to have a little different view of this than you do. . .
It seems to me that market share is a secondary consideration, and there’s no point in continuing to beat the dead horse of the precipitous fall of GM’s market share over the years.
Certainly, one would expect that closing or selling off brands at least in the short term, is going to reduce total sales volume and, likely, market share. A lost Pontiac or Saturn sale does not translate one-for-one to a Chevy sale.
The real question is what is the total sales volume that is required to support GM’s present cost structure and return a respectable bottom-line profit, not EBIDTA, but profit?
So, if costs are able to be cut faster than revenues fall, we’re doing o.k. If not, we’re not. If the fall in revenues can be arrested, that’s good. If it can be turned around, that’s even better.
“Market share” is just bragging rights, as the old GM found out and as even Toyota has fairly explicitly acknowledged.
What’s important is profitability.
Maybe Gov’t Motors should lay off all the talk of reinvesting billions in old plants, et al until its own cost structure stabilizes. After all, there aren’t that many more areas left to cut; brands, perhaps, but the UAW likely won’t allow further personnel reductions and they’re the ones running the show.
Just a thought. And here’s another one:
Whitless and Co. at Gov’t Motors would do well to STFU and concentrate on selling cars, rather than making foolhardy attempts to capture a day’s news cycle. We’ve seen a lot of ill-considered blathering out of that pitiful organization lately.
@ Rob Winfrock:
Amen to that, about Whitless should STFU. The “we paid back the loan early” ad I found seriously offensive.
Sell us the cars, not the company!