GM States poss use for G8
GM plans to expand Buick, Chevy
Automaker also seeks to retain market share with Cadillac, GMC brands
The Associated Press
updated 6:45 p.m. ET, Wed., July 22, 2009
DETROIT - General Motors Co.’s top sales analyst said he is confident the company can make up the sales it will lose when it sheds four of its eight U.S. brands.
Mike DiGiovanni, GM’s executive director of global market and industry analysis, said Wednesday that the Chevrolet and Buick model lineups will be expanded to pick up a lot of the lost sales from Pontiac and Saturn, the biggest sellers of the scrapped brands.
Along with Chevrolet and Buick, GM has decided to focus on the Cadillac and GMC brands. As part of its bankruptcy restructuring, the automaker is phasing out Pontiac, and selling Saab, Saturn and Hummer.
A lot of recent Pontiac sales, DiGiovanni said, were to fleet buyers such as rental car companies. GM can cover those with the remaining four brands.
Buick and Chevrolet should be able to make up for lost retail sales to individuals with expanded lineups, DiGiovanni said, declining to identify what models would be added.
“We’re going to grow Chevy into new niches that they are not in now,” he said during a conference call held to talk about GM’s global sales. “We will expand the Chevrolet portfolio.”
GM, which controlled 20 percent of the U.S. market in the first half of 2009, plans to retain an 18 or 19 percent share despite losing half its brands. GM sold about 143,000 Pontiacs, Hummers, Saabs and Saturns in the first half of the year, about 15 percent of its total sales, according to Autodata Corp.
The automaker emerged from bankruptcy protection on June 10 after a 40-day stay that wiped away much of its debt and other burdensome costs. But it survived because of $50 billion in aid from the U.S. government. Retaining market share and boosting sales are the keys to making money and repaying the government.
Yet Bank of America Merrill Lynch Research Analyst John Murphy, in a study of the U.S. industry released last week, called GM’s market share assumption optimistic and predicted a 15 or 16 percent range.
Murphy said GM will replace only 11 percent of its models each year for the next four years, far below the industry average of 18 percent. Newer models generally translate to better sales and market share, Murphy wrote.
But DiGiovanni said GM plans to rejuvenate its product lineup. Buick, he said, is operating with only three vehicles at present, two larger sedans and a large crossover vehicle, but the brand will see more models and increased sales, he said.
“Buick, for us, we think, is a brand that’s been underestimated in terms of its potential,” DiGiovanni said, pointing to its successful sales in China.
Chevrolet should be able to capture Pontiac buyers, DiGiovanni said, noting that the two had similar, competing vehicles. Chevrolet, Buick and GMC should be able to catch Saturn buyers.
“We think with Chevrolet covering the low end, with Buick and GMC covering the premium end, we will pick up what we are losing in terms of Saturns,” he said.
Hummer and Saab had relatively low volumes and their loss shouldn’t hurt market share, he said.
Although he DiGiovanni wouldn’t reveal what new models might go to Chevrolet or Buick, GM officials have said the rear-wheel-drive Pontiac G8 sports sedan will be rebadged as a Chevrolet but sold for only for police car use.
He said GM, with fewer brands, will be able to roll out new models faster than it had in the past, and it will have more marketing dollars to spend promoting them.
“We’ve got the products working right. We just haven’t done a good enough job on perception of the products and brand,” DiGiovanni said. “We are pretty confident in our game plan. Best one that I know of since I’ve been working in this place for 30 years.”