General Motors Searches for the Corner

Automotive Industries,  Sept, 2001  by Ray Windecker

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Bob Lutz, GM's highly respected and newly appointed product czar, recently said that GM had already rounded the corner. Internally, that is probably emotionally and psychologically true, but the corner is not yet apparent in market share. The first seven months of the year brought GM a 27.5 percent share, down from 27.8 percent in 2000 and 28 percent in the comparable year ago months.

Signs of the approaching corner are plentiful. Lutz himself is a powerful weapon -- early on as an important chess piece in the game of bolstering GM's image in the minds of employees, analysts and media, and long term in the focusing of the product development process.

GM trucks, picking up an additional 0.3 percent market share so far this year, are an encouragement, as is the ability to remain profitable. Also on the plus side are reasonable gains in productivity and slight nudges in quality.

There are signs of breaking out of GM's debilitating, longstanding lethargy. Even the unloved Aztek showed some gumption and a new aggressiveness. Also, the blaring headline problems of its Dearborn, Mich., rival and a lingering malaise at DCX have undoubtedly pushed some buyers in GM'S direction and will allow the General additional months to maneuver.

Lastly, and of some consequence, DCX and Ford are out of favor with much of the daily and "deep analysis" print media. That leaves GM an open field to play any good news hand to a reasonably receptive print media market with virtually all of the electronics boys reading from the print media script.

There is a market share corner out there somewhere. Honda and Toyota rounded it several years ago and because of that have been able to gain significant share, even in a down market. The question is, will the addition of Lutz help GM turn the corner where it really counts -- on the showroom floor?

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