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May 2006 Sales: General Motors Corp.


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9-2x....LOL.

Mark needs to understand that volume will never be where it was in the past because of a reduction in fleet sales and outrageous incentives. GM is going to have to make some truely, unbelievably great cars to reach those levels and I highly doubt it will reach them even with great cars because those levels were artificially inflated, kind of like a woman stuffing her bra.

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Well if fleets are about 1/3 of sales (I believe they were in the past), and 1/3 of sales were down 28%, that means that the other 2/3 of sales had to be down 10% to get an average of down 16% (10%+10%+28% = 48/3 = 16%). That's a very rough estimate, but I'm guessing that's relatively close (+/- 3%).

There was -1 Classics sold :lol:

Anyways, there were not many bright spots...

The CTS needs to get here NOW, the LaCrosse needs a refresh but the Lucerne seems to be doing well, it looks like the DTS was hit hard by the fleet reduction, and the STS needs a refresh too. The Aveo should pick back up when the new one arrives, the Cobalt seemed to do relatively well and the Impala did well. The Malibu appears to be the victim of reduced fleet sales once again. The Z06 is giving Corvette sales a boost it would seem. G6 did well, GP was down due to fleet probably, and the Solstice continues it's torrid pace. The Vibe needs a redesign. Saab continues to suck, and the SKY helped Saturn out quite a bit.

Buick really needs the Enclave ASAP, the Escalade is doing well and the SRX was up surprisingly. I'm surprised the Suburban is already at near year-ago levels, but everything besides the HHR and T900s sucked for Chevy trucks. Same thing goes for GMC. The H3 has really taken off for Hummer it would appear, and the Torrent is giving Pontiac some much-needed volume.

All in all, a terrible month for GM. Very few bright spots. Until the Aura, new Malibu and CTS, Lambdas, a T900 pickups come I'm not that optimistic that GM will do very well in sales.

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Aren't the Avalanche, Yukon, Tahoe and Suburban all examples of redesigned trucks rushed to market?  Not a good sign that they are all down already.

New ones sell at sticker, last years was 10K off sticker

Some numbers for the month

GM 345 000

Ford 278 000

Toyota 235 000

DCX 212 000

Honda 142 000

At this rate Toyota could pass Ford next year and even GM soon after.

No joke. unless people get tired of seeing Toyota everywhere.

Edited by Matt276
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New ones sell at sticker, last years was 10K off sticker

Some numbers for the month

GM    345 000

Ford  278 000

Toyota  235 000

DCX  191 000

Honda 142 000

At this rate Toyota could pass Ford next year and even GM soon after.

No joke. unless people get tired of seeing Toyota everywhere.

Honda could pass DCX in the next year or two as well.

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So who would have guessed that for the year GM's strongest brands are Isuzu, Saturn, Hummer and Saab :o:lol: If you think I am lying take a look it is true, it's true. So maybe the damaged brands are Chevy, Pontiac, Buick, Cadillac and GMC.

And the brands that are not down much do not have very good lineups to be honest. Is it because to many people they are not GM brands? Is the anti Gm bias that bad? Or is it because they are traditionally low fleet sales brands? Or what?

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New ones sell at sticker, last years was 10K off sticker

Some numbers for the month

GM    345 000

Ford  278 000

Toyota  235 000

DCX  191 000

Honda 142 000

At this rate Toyota could pass Ford next year and even GM soon after.

No joke. unless people get tired of seeing Toyota everywhere.

You'll want to include Mercedes-Benz's 21,xxx sales to DCX for the month of May... you've only listed the sales for the 'Chrysler Group' with DCX's total sales.

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All in all, a terrible month for GM. Very few bright spots. Until the Aura, new Malibu and CTS, Lambdas, a T900 pickups come I'm not that optimistic that GM will do very well in sales.

I would not expect those products to stop the slide. The big gainers were the Fit, Accord, Civic, Yaris, Corolla and Camry.

The Corolla and Camry each sold over 40,000 vehicles last month. That is incredible volume and shows the near term market shift back to smaller cars.

GM will NOT make up for lost volume with a new round of large sport utlities, full sized pick-up a couple niche sedans and a Malibu.

GM sold only app. sold 20k, Impala and Cobolts which are brand new vehicles. The Malibu was a no show at 12k.

Assuming gas prices remain where they are, this does not took good for GM.

Even the GMT-900 were lukewarm. They might help the bottom line because of reduced incentives and it is too early to guage the near term success in the market because they are brand new. But the sales of those vehicles does not leave me with a warm fuzzy feeling inside.

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And I don't think the Lambdas will sell so well either, People are moving to small fuel efficient cars, they just don't want to buy gas anymore, and I understand that. It's the future and GM is not prepared for that. Even a new Camaro would not stop the slide.

All the money thrown into Hummer should have been spent for developing new fuel saving technology five years ago, so GM could face the Toyota Hybrid system. We can only blame GM, not consumers.

Sad, but Toyota is the real winner (right now, at least)

Short term solution would be to offer the Vue's hybrid system into more cars next year. But will GM do it?

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Not that it's much of a difference to most people here, but don't forget that GM has limited Impala production to 250,000 for the year. So it's hard to actually judge 23,000 monthly sales in regards to market performance as a new model when that's about how many GM is limiting itself to sell.

Edited by VenSeattle
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Not that it's much of a difference to most people here, but don't forget that GM has limited Impala production to 250,000 for the year.

Don't forget that 50% of the 320,000 Impala sold last year went to fleet.

Toyota and Honda may claim they have the hearts and minds of the average American.

But only GM can claim they have the hearts and mind of the average business traveler.

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Don't forget that 50% of the 320,000 Impala sold last year went to fleet.

What is the Fleet/Retail mix of the remodeled 2006 Impala? Is it still 50%? I doubt GM plans to only have 90,000 retail Impala sales for 2006.

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What is the Fleet/Retail mix of the remodeled 2006 Impala? Is it still 50%? I doubt GM plans to only have 90,000 retail Impala sales for 2006.

It probably dropped to around 30% of sales for the new 06 model. That would keep the 06MY retail sales in line with the 05MY.

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It probably dropped to around 30% of sales for the new 06 model.  That would keep the 06MY retail sales in line with the 05MY.

Well, I hope that this strategy works and increases the average transaction price per Impala. Let's see if it works out by the end of the year.

Do you know if the Impala's average transaction price has increased any for the first 5 months?

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Do you know if the Impala's average transaction price has increased any for the first 5 months?

I have not seen anything good in the way of exact data. It would be my guess it is around the same as last year when the price reduction vs. rebates is factored into the equation. It might be slightly higher because of revised product mix.

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Well, I can't speak for GM corporate, but around here the incentives on the Impala has been a LOT less than a year ago (we had $3,000 cash rebates then and now we have NO cash rebates) and we are not having any problems selling them. Most people see the inherent value of a $25,000 (Can.) V-6 equipped the way the base Impala is. Also, around here they like the fact that it is built close by.

In general, at the dealer level we are working with a lot fewer rebates than a couple years ago and our sales are holding their own.

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Well, I can't speak for GM corporate, but around here the incentives on the Impala has been a LOT less than a year ago (we had $3,000 cash rebates then and now we have NO cash rebates) and we are not having any problems selling them.  Most people see the inherent value of a $25,000 (Can.) V-6 equipped the way the base Impala is.  Also, around here they like the fact that it is built close by.

  In general, at the dealer level we are working with a lot fewer rebates than a couple years ago and our sales are holding their own.

The old impala was as ugly as sin. The new one looks much better.

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All the money thrown into Hummer should have been spent for developing new fuel saving technology five years ago, so GM could face the Toyota Hybrid system. We can only blame GM, not consumers.

Good point. GM totally missed on hybrids.

They don't seem to be any good at making their own small cars either. And they have been selling their stake in the companies that can.

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How many GM's does it take to make 1 Camry?

How many GM's does it take to make 1 Camry and 1 Corolla?

May-06

LaCrosse 4,990

Impala 23,702

Malibu 12,881

G6 11,534

Grand Prix 6,878

60,075

First off... I'm not arguing with you. I just looked at your post again and realized it appears slanted... I think you could have painted the picture far differently. I'm going to look at GM's numbers from a different perspective...

------------------ Compact cars --------------

None of the vehicles listed above compete with the 1 Corolla (Corolla/Matrix). You would have reached your 'total' much quicker had you used them. Delta variants are GM's competitors to the compact market... and GM's Cobalt+HHR are direct competitors to Corolla+Matrix

Corolla (Corolla+Matrix) was 41,550.

Cobalt: 21,247

HHR: 7,827

----------------

Total: 29,074

Not to be funny, but almost 30,000 isn't something for Chevrolet to be ashamed of. And it was reached as efficiently as Toyota achieved Corolla's total... However, if you want to compare "GM's" to Corolla, then you'd also include the Delta-based Ion & Corolla-based Vibe.

Cobalt: 21,247

HHR: 7,827

ION: 7,782

Vibe: 4,197

--------------

Total: 41,053

Pretty much, Delta variant sales are very close to Corolla (even excluding the Corolla-based Vibe)

--------------- Midsize cars ---------------

Similar issue happens with the 1 Camry (Camry/Solara) comparison... but less efficiently done... W-platform variant sales come very close to Camry/Solara (43,112):

Impala: 23,702

Grand Prix: 6,878

LaCrosse: 4,990

Monte-Carlo: 2,112

----------------------

Total: 37,682

The 37,682 total does not include the Epsilon-based triplets:

Malibu: 12,881

G6: 11,534

9-3: 1,986

-------------

Total: 26,401

Total midsize GM sales for May: 64,083 (using two platforms and several variants)

Yes, Toyota achieves its sales more efficiently, but GM still sells more midsize mainstream vehicles, even if you factor out GM's est. 30% to fleets and Toyota's est. 10% to fleets.

(You could try and include the 9,554 ES350s into this, but none of GM's FWD midsize sedans compete in that class/market. The ES350 is also engineered, built, and imported completely separate from the Camry. Regardless, Toyota's sales total still doesn't exceed GM's 64,083 when the ES is included.

Avalon is separate because GM's G-Platform vehicles compete with the Avalon. G-Platform sales are higher than Avalon so it doesn't work in Toyota's favor. It would probably be best to include the ES350 into an 'ES350+Avalon' group comparison verses the G-Platform twins... just to distinguish between competing classes/markets.)

-------------------------------------------------------

Should GM be able to sell more considering how many versions it offers? Yes.

But how many 'Chrysler Group' vehicles equal 1 Camry or 1 Corolla? How many Nissans? How many Fords? How many Hyundais? How many years of Mitsubishi, Suzuki, VW, or Subaru sales equal 1 Camry or 1 Corolla? Is it really a viable comparison to the point of preaching doom about GM? Honda is the only one who competes in similar single nameplate volume, but really, what else does Honda offer? Civic & Accord are Honda's entire sedan line-up. Acura could be included, but let's not embarrass Honda. My point is that your comparison is negative regardless of who you choose... Even to Honda. And just because no other manufacturer is as efficient at Toyota, doesn't mean they're all failing or will disappear. Most (if not all) compete far worse to Toyota in terms of volume than GM.

Chevrolet was able to sell 29,000 compacts during a time when Corolla had best ever monthly sales. That's a good performance considering how tough the current compact market is.

With Impala, Malibu, & Monte Carlo... Chevrolet was able to sell 38,695 midsize vehicles while Camry had its best ever performance numbers.

You can paint several different pictures depending on how you want to tally the numbers, but on the car side Chevrolet was competitive to Toyota during May... just not as efficient. As for trucks/SUVs... well, still no comparison.

Epsilon II will hopefully consolidate the Epsilon/W-Platform strategy and possibly provide a larger volume Chevrolet sedan that more clearly competes with Camry. In the mean time, the Aura will just increase GM's 64,000 monthly volume of mid-size sedan sales.

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Should GM be able to sell more considering how many versions it offers? Yes.

But how many 'Chrysler Group' vehicles equal 1 Camry or 1 Corolla? How many Nissans? How many Fords? How many Hyundais? How many years of Mitsubishi, Suzuki, VW, or Subaru sales equal 1 Camry or 1 Corolla? Is it really a viable comparison to the point of preaching doom about GM? Honda is the only one who competes in similar single nameplate volume, but really, what else does Honda offer? Civic & Accord are Honda's entire sedan line-up. Acura could be included, but let's not embarrass Honda. My point is that your comparison is negative regardless of who you choose... Even to Honda. And just because no other manufacturer is as efficient at Toyota, doesn't mean they're all failing or will disappear. Most (if not all) compete far worse to Toyota in terms of volume than GM.

Ven;

By including the HHR and Cobalt and Vibe in the analysis, you only better illustrate my earlier post.

How many GMs does it take to equal 1 Toyota?

With buyers transisitioning from trucks to cars in the mid-sized segment, you would think that buyer would move from Trailblazers to a GM midsized sedan.

But that is not the case. GM is weakening in the midsized segment even though those product are relatively fresh.

I am sorry, but the Toyota numbers for the month are incredible and only further illustrate the problems at GM.

And I am sorry to tell you, that your comments about Honda are just wrong. Honda can do with two vehicles, what it takes GM 4 or 5. That is not a good sign for GM.

The fact is Honda and Toyota can do with with a few vehicles what it take GM to do with a lot.

What that means to GM is that, they have serious problems in the mid sized market. It takes a lot of investment to support all of those models to equal 1 Toyota or Honda.

The other companies you bring up are not a good comparision. Subaru, Hyundai etc are are not GM (With having to support multiple division). To a degree you are correct about Ford and Ford does have many of the troubles that GM has in the midsized segment.

Either way you look at it, GMs has serious problems in the midsized segment that will not be corrected in a couple years. I am sorry but it is not GOOD.

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Ven;

By including the HHR and Cobalt and Vibe in the analysis, you only better illustrate my earlier post.

How many GMs does it take to equal 1 Toyota?

With buyers transisitioning from trucks to cars in the mid-sized segment, you would think that buyer would move from Trailblazers to a GM midsized sedan.

But that is not the case.  GM is weakening in the midsized segment even though those product are relatively fresh.

I am sorry, but the Toyota numbers for the month are incredible and only further illustrate the problems at GM.

And I am sorry to tell you, that your comments about Honda are just wrong.  Honda can do with two vehicles, what it takes GM 4 or 5.  That is not a good sign for GM.

The fact is Honda and Toyota can do with with a few vehicles what it take GM to do with a lot.

What that means to GM is that, they have serious problems in the mid sized market.  It takes a lot of investment to support all of those models to equal 1 Toyota or Honda.

The other companies you bring up are not a good comparision.  Subaru, Hyundai etc are are not GM (With having to support multiple division).  To a degree you are correct about Ford and Ford does have many of the troubles that GM has in the midsized segment. 

Either way you look at it, GMs has serious problems in the midsized segment that will not be corrected in a couple years.  I am sorry but it is not GOOD.

well lets see how the Aura handles the Camry and Accord...

and i heard that later in the year the impala is supposed to go on the offensive against the camry

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Good point.  GM totally missed on hybrids. 

They don't seem to be any good at making their own small cars either.  And they have been selling their stake in the companies that can.

Not only hybrids but small efficient cars too.They've had 30 years to come up with a competitive small car that gets excellent fuel economy and they haven't been interested. When people think of a small reliabe car that gets excellent economy they think of two companies, Toyota and Honda. Even the Korean cars can't compete with the Civic,Fit,Yaris,Corolla in fuel economy. All they are doing is bragging that thier 900's get 20mpg on the HWY, Who cares?
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9-2x....LOL.

Mark needs to understand that volume will never be where it was in the past because of a reduction in fleet sales and outrageous incentives. GM is going to have to make some truely, unbelievably great cars to reach those levels and I highly doubt it will reach them even with great cars because those levels were artificially inflated, kind of like a woman stuffing her bra.

[/quote

I am not sure where the Fleet Sales reduction is supposed to be coming from? Chevrolet delivered 209,108 in May, however only 139,222 were sold retail by the Dealers. For 2006, GM has sold 35% of the units into Fleet Sales. There is no reduction in Fleet sales and days supply is as high as ever.

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Aren't the Avalanche, Yukon, Tahoe and Suburban all examples of redesigned trucks rushed to market?  Not a good sign that they are all down already.

they aren't down, there just aren't that many at dealerships (yukon xl/ suburban, etc)

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The point is taken about model/platform efficiency, and clearly Toyota and Honda are the winners here; however (and this is a big HOWEVER), that is only of interest to the accountants, and hasn't that been GM's problem for a while?

You cannot tell me that everybody in YOUR neighborhood drives only a Camry or Accord? If Malibu or Impala were the only vehicles GM offered, wouldn't this be a horrible world to live in.

What seems to be boasted here (advocated?) is that it is better, no PREFERABLE, to all of us drive the same vehicle. Using that logic, then, we should all be greatful Toyotas are kicking GM's ass so we can sooner all drive the same vehicle.

Good GAWD.

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The point is taken about model/platform efficiency, and clearly Toyota and Honda are the winners here; however (and this is a big HOWEVER), that is only of interest to the accountants, and hasn't that been GM's problem for a while?

  You cannot tell me that everybody in YOUR neighborhood drives only a Camry or Accord?  If Malibu or Impala were the only vehicles GM offered, wouldn't this be a horrible world to live in.

  What seems to be boasted here (advocated?) is that it is better, no PREFERABLE, to all of us drive the same vehicle.  Using that logic, then, we should all be greatful Toyotas are kicking GM's ass so we can sooner all drive the same vehicle.

  Good GAWD.

No the goal of this business is to sell product and make money first. Something GM has forgotten how to do.

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Ven;

By including the HHR and Cobalt and Vibe in the analysis, you only better illustrate my earlier post.

How many GMs does it take to equal 1 Toyota?

Evok, HHR & Cobalt are very similar to the development of the Corolla/Matrix. Same platform, two vehicles, attacking two different parts of the compact market. The HHR is as much Cobalt as the Matrix is Corolla. There's no difference. HHR is a GM's unique answer to the Matrix.

With buyers transisitioning from trucks to cars in the mid-sized segment, you would think that buyer would move from Trailblazers to a GM midsized sedan.

But that is not the case.  GM is weakening in the midsized segment even though those product are relatively fresh.

I am sorry, but the Toyota numbers for the month are incredible and only further illustrate the problems at GM.

And I am sorry to tell you, that your comments about Honda are just wrong.  Honda can do with two vehicles, what it takes GM 4 or 5.  That is not a good sign for GM.

The fact is Honda and Toyota can do with with a few vehicles what it take GM to do with a lot.

Yes, GM is less efficient than Toyota and Honda, but GM still sells 64,000 midsize vehicles a month on two platforms(include the upcoming est 9k-10k for the Aura... and you have 74,000.) Toyota sold 43,000 using one variant on one platform. Honda used three variants on one platform (TL, TSX, Accord) and sold barely more than Toyota... 46,464. Honda even sucks and is inferior when compared in the similar fashion as you have with 'GM & Toyota.'

What that means to GM is that, they have serious problems in the mid sized market.  It takes a lot of investment to support all of those models to equal 1 Toyota or Honda.

The other companies you bring up are not a good comparision.  Subaru, Hyundai etc are are not GM (With having to support multiple division).  To a degree you are correct about Ford and Ford does have many of the troubles that GM has in the midsized segment. 

Either way you look at it, GMs has serious problems in the midsized segment that will not be corrected in a couple years.  I am sorry but it is not GOOD.

Your point about Subaru, Hyundai, etc is invalid because they follow a marketing "structure" like you want GM to follow. They should be able to compete against Toyota one-on-one... just like you're expecting GM to do. The fact is they don't. They don't even compete against several single variants off GM's two platforms. One would think their position would be far more vulnerable/volatile than GM's because of their lack of diversity and flexibility of multiple brand images. If they become a “damaged brand” they’re dead. See Mitsubishi. Your comparison is strictly relative and only produces the results you want when using Toyota & GM. It's a flawed comparison to illustrate success. A single product volume is not necessarily the key to its own success or a defining factor to the success of a company as a whole.

The loathed Pontiac G6: 11,534

Highly regarded Subaru Legacy: 7,197

Snubbed Chevrolet Impala: 23,702

Elevated Hyundai Sonata: 17,035

Old-School Premium Buick LaCrosse: 4,990

Renowned VW Passat: 4,545

This paints a different picture. These smaller companies can’t match GM’s single variants (that benefit from lower engineering costs due to platform sharing) yet you want to focus on and condemn GM for not matching one of Toyota’s. I think those smaller manufacturers need to be worried about GM if GM is able to hold on and bring to market the new RWD & Espilon II vehicles. If they can't match/beat GM when GM's products are as weak (or as average) as they are now, how will they compete in 3-4 years?

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Ven, why do those smaller companies have a hard time even matching a single GM midsize variant in sales? I'm not being a smart ass but just think about it for a second.

If Toyota or Honda had five midsize cars instead of one they would be in the same boat. More money to spend on platform/badge engineering and advertising, less money to invest in the next-gen, sales in a tailspin.

Edit: spelling.

Edited by sciguy_0504
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here's the fleet #s for mid-yr 2005.

http://www.fleet-central.com/af/t_pop_pdf....05/cars_web.pdf

Impala: 23,702 (62.1%)

Grand Prix: 6,878 (52.2%)

LaCrosse: 4,990 (no data)

Monte-Carlo: 2,112 (36.1% vs Solara 8.2%)

now the argument could be made that GM is reducing fleet sales, but so is Toyota.

I bet the new Camry is well below 14%, and the new Corolla (arriving this yr) will be well below 16%.

Let's not forget

FJ

6,670

H3

3,418

Edited by toyoguy
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Evok, HHR & Cobalt are very similar to the development of the Corolla/Matrix. Same platform, two vehicles, attacking two different parts of the compact market. The HHR is as much Cobalt as the Matrix is Corolla. There's no difference. HHR is a GM's unique answer to the Matrix.

Yes, GM is less efficient than Toyota and Honda, but GM still sells 64,000 midsize vehicles a month on two platforms(include the upcoming est 9k-10k for the Aura... and you have 74,000.) Toyota sold 43,000 using one variant on one platform. Honda used three variants on one platform (TL, TSX, Accord) and sold barely more than Toyota... 46,464. Honda even sucks and is inferior when compared in the similar fashion as you have with 'GM & Toyota.'

Your point about Subaru, Hyundai, etc is invalid because they follow a marketing "structure" like you want GM to follow. They should be able to compete against Toyota one-on-one... just like you're expecting GM to do.  The fact is they don't. They don't even compete against several single variants off GM's two platforms. One would think their position would be far more vulnerable/volatile than GM's because of their lack of diversity and flexibility of multiple brand images. If they become a “damaged brand” they’re dead. See Mitsubishi. Your comparison is strictly relative and only produces the results you want when using Toyota & GM. It's a flawed comparison to illustrate success. A single product volume is not necessarily the key to its own success or a defining factor to the success of a company as a whole. 

The loathed Pontiac G6: 11,534

Highly regarded Subaru Legacy: 7,197

Snubbed Chevrolet Impala:  23,702

Elevated Hyundai Sonata: 17,035

Old-School Premium Buick LaCrosse: 4,990

Renowned VW Passat: 4,545

This paints a different picture. These smaller companies can’t match GM’s single variants (that benefit from lower engineering costs due to platform sharing) yet you want to focus on and condemn GM for not matching one of Toyota’s. I think those smaller manufacturers need to be worried about GM  if GM is able to hold on and bring to market the new RWD & Espilon II vehicles. If they can't match/beat GM when GM's products are as weak (or as average) as they are now, how will they compete in 3-4 years?

You wasted your time with so many typed words.

I will be brief and to the point since you obviously do not know what you are talking about.

It costs GM a multiple of 3-5 times, in dedicated resources, marketing budgets, development, to achieve the same volume as Toyota in the mid sized segment as it takes GM in selling the same amount of vehicles through different marketing channels.

Sorry but GM is business and not a fan club.

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To me the fact that are selling them w/o alot of incinteves is better than selling more of the w/ incinteves. More profit will hopefully lead to better products down the pipeline.

until they have idled plants... then u throw all your profits down the tube...

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You wasted your time with so many typed words.

I will be brief and to the point since you obviously do not know what you are talking about.

It costs GM a multiple of 3-5 times, in dedicated resources, marketing budgets, development, to achieve the same volume as Toyota in the mid sized segment as it takes GM in selling the same amount of vehicles through different marketing channels.

Sorry but GM is business and not a fan club.

Different approach...

So I don’t know what I’m talking about and I’m wordy. That’s fine. I honestly would like you to help me understand. I’ll illustrate the inferred solution by your original illustration... a Perfect Case Scenario:

1) Fairfax, Oshawa 1, Oshawa 2, & Orion all manufacture Impalas

2) Chevrolet continues to sell the same volume of midsize sedans as GM does today: 64,000 monthly sales volume.

Do you believe this would actually solve GM's problems? Would GM be profitable if the above was true?

I honestly don't believe so, which is why I find your illustration flawed. All it says to me is that the Chevrolet Impala was able to beat Toyota Camry in sales. It doesn't guarantee GM would be profitable doing so.

The Impala already outsells Ford, DCX, Hyundai, Subaru, Mitsubishi, VW, and Nissan midsize rivals on an individual basis. Why would going from #3 to #1 make that much of a difference in GM's current condition?

Yes, you mention a decrease in development, engineering, and sales channels costs but I feel there are far more underlying expenses crippling GM than a single 'volume leader' or 'Home Run' would fix... nor the elimination/consolidation of 6 midsize sedans would be able to resolve.

Overall, I don't think it is so much as GM's strategy that's broken, but GM's structure behind it.

Maybe you had something else in mind. Are you implying GM should drop 5 midsize offering, shutter two plants, and dissolve three brands? That still wouldn’t guarantee GM a single ‘home-run’ midsize sedan.

Or… are you just questioning (out loud) the market health of GM’s 64,000 monthly sales?

Edited by VenSeattle
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It costs GM a multiple of 3-5 times, in dedicated resources, marketing budgets, development, to achieve the same volume as Toyota in the mid sized segment as it takes GM in selling the same amount of vehicles through different marketing channels.

Evok, with GM's market share probably heading down to 20 percent, would cutting back to just Chevrolet and Cadillac (and eliminating Pontiac, Buick, GMC, Saturn, and Saab) be wise?
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Evok, with GM's market share probably heading down to 20 percent, would cutting back to just Chevrolet and Cadillac (and eliminating Pontiac, Buick, GMC, Saturn, and Saab) be wise?

Depends if you are going for profit or volume I guess. For volume, ideally GM could have a brand for every individual person. Not so good for profit.

GM's volume is based on an unprofitable model. Haven't they seen that Simpsons where Homer designs his ideal car and bankrupts his brother?

When Buick has a minivan, you know something is horribly wrong.

I think 20% is just on the way to < 15%. GM should be planning based on that.

Edited by LTB51
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Evok, with GM's market share probably heading down to 20 percent, would cutting back to just Chevrolet and Cadillac (and eliminating Pontiac, Buick, GMC, Saturn, and Saab) be wise?

Sorry for the delay.

At this moment I do not think it is practical for GM to eliminate any brands.

Brands with immediate future:

Saturn and Saab are the only two brands that have the ability to compete for non-traditional GM customers. We shall begin to see the investment in Saturn payoff assuming the marketing is strong. Saab needs investment in Saab products. The future of Saab is the that it is not associated with GM in the minds of the public. People around here might not by into it, but GM migh have an easier time replacing Buick with Saab than the other way around. The cost structure will come in line with the complete integration of the brand into the rest of GM. Biggest problem I see is the small dealer foot print and really they are a one product company with only the 9-3 and those variants. Saab is worth the investment because it does not have the GM baggage.

The unknown:

Pontiac, Buick and GMC are big question marks and will require GM to seriously leverage and balance the investment globally.

GMC will most likely hold that division together in the near term because trucks, suvs, crossover, vans will still command the volume that will drive sales and revenue for the dealer group. To save either Buick or Pontiac or both may be tricky. Sales in both brands will continue to drop and both brands are associated with all that is wrong with GM in the publics mind. That assumes they even come across the radar screen for shoppers.

There really is no easy answer for Buick and Pontiac. GM still has time to stop the slide, but to turn both brands around will require serious product and investment.

Personally, Buick can leverage product from China. Pontiac in the short term can leverage zeta product from Holden. The bigger question is, are those products enough to grow the business?

So in summary, it is tough for GM to axe another division in the short term and GM does have the ability to leverage their global network of product to shore up some divisions. But I remain on the fence as to the long term viability of both Pontiac and Buick given the product GM can leverage for those two brands in the short term and their impact on the NA market.

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What's to cut? They've already starved Buick of product. What appears to be three vehicles -- LaCrosse, Lucerne (Statesman), Enclave -- can't be costing them much money, since they're all based on something else. I suspect the Lucerne (Statesman) will be an easy rebadge of the Holden, though I was it were given a real stylish Buick appearance. How could it not be expected that sales will fall when Rendezvous needs refreshed, Rainier is a clone, and Terraza was 1 of 4 copycats to start with? GM doesn't even talk up Buick, despite its quality awards, or the latest, that rollover crash rating for the Lucerne. What do you expect? It should be a no brainer to take China's Buick and use them here, and I don't see why people say Pontiac could became a NA Holden, Buick can have something from them, too. LaNeve already said they didn't expect to grow the business with Buick or Pontiac. Doesn't Buick - Pontiac - GMC equal one good brand or sales channel?

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a Perfect Case Scenario:

1) Fairfax, Oshawa 1, Oshawa 2, & Orion all manufacture Impalas 

2) Chevrolet continues to sell the same volume of midsize sedans as GM does today: 64,000 monthly sales volume.

Do you believe this would actually solve GM's problems? Would GM be profitable if the above was true?

I honestly don't believe so, which is why I find your illustration flawed. All it says to me is that the Chevrolet Impala was able to beat Toyota Camry in sales. It doesn't guarantee GM would be profitable doing so.

Yes with plenty of assumptions. If the Impala commanded volume like the Camry, GM could probably close one of the plants if not more that you mentioned. With the efficiency of building 1 model, there is less cost in plant complexity (sequencing, sorting, body shop tooling, etc). Of course there would be added tooling cost resulting from the added capacity for some componetns and systems but that would also be offset by the marketing budget that is currently used for the other divisions and brands. My big assumption is that the Impala has the same loyal following as the Camry that is willing to purchase a vehicle close to sticker and assume a same low fleet penetration rate as Camry. GM would also save money by designing and devloping "1" vehicle. Not to mention the white collar staff reductions or reassigned to other programs.

The Impala already outsells Ford, DCX, Hyundai, Subaru, Mitsubishi, VW, and Nissan midsize rivals on an individual basis. Why would going from #3 to #1 make that much of a difference in GM's current condition?

Ford and Chrsyler Groups midsized vehicles are a disaster and have been for some time. They face the same issue as GM.

The other brands are niche players in the business and though there sales might be limited in the US, they are selling globally designed vehicles. GM's midsized vehicles are not global. Hyundai in particular has a very srtong vehicle with the Sonata with 17,000 sales last month. VW's Jetta is sold through out the world. The Chinese Lacross used to be global but that no longer is the case. Mitsubishi is another story all together. Much like Isusu, they have one foot out the door in the US market. With Toyota's equity stake in Subaru, it is possible that we might see some changes in their business. The Nissan Altima will be new for 07, let us see how that product fares next year in the market. But overall since the 2002 redesigned, the Altima has doubled in sales.

Yes, you mention a decrease in development, engineering, and sales channels costs but I feel there are far more underlying expenses crippling GM than a single 'volume leader' or 'Home Run' would fix... nor the elimination/consolidation of 6 midsize sedans would be able to resolve. 

Of course GM has many underlying issues. Besides their structural problems their products are the single biggest issue driving their continued drop in market share. GMs midsized market share continues to decline, when the market segment grows. This is a volume driven business, and their variable cost goes through the roof with a drop in volume. GM lost market sales in a growing market. That is not good to the bottom line.

Overall, I don't think it is so much as GM's strategy that's broken, but GM's structure behind it.

No, the whole things is broken. They do have too many division that they really can do little about. There product is not being accept by the market and for the most part their midsized vehicles are very fresh. Those that are new, GM is going to have live with them for years to come. The Aura's volume will be offset by the loss of the Ion. And the 386 Malibu is just an estimate right now.

Maybe you had something else in mind. Are you implying GM should drop 5 midsize offering, shutter two plants, and dissolve three brands?

Not yet on axe Pontiac and Buick. The brands might be salvageable but, they might not command the volume in NA they currently have. Maybe only a fraction of what they will get this year. In either case, GMs slide agaist the main competition does not appear to be ending anytime soon on the car side.

That still wouldn’t guarantee GM a single ‘home-run’ midsize sedan.

No - But it could go a long way in bringing focus to the product that is left and free up resources.

Or… are you just questioning (out loud) the market health of GM’s 64,000 monthly sales?

That too, loosing volume in a segment that is up is not a good sign. It does not speak well for the product that is being offered.

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