Turnaround efforts in Europe and the US could bring General Motors a more positive 2004. The manufacturer is counting on its new Astra model to increase its sales in the old continent. However, GM’s efforts to improve on its reliability image come to nothing every time a vehicle recall or production stop is in the press.
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For the first time in 25 years, US car manufacturers have outranked their European rivals and positioned themselves behind Asian manufacturers at the top of the 2004 Consumer Reports reliability category. For the Big Three, 2004 should be the year that will see a reverse in declining US market share.
However, Asian manufacturers are now targeting more profitable segments such as SUVs and pickup trucks while continuing to carry the concept of quality and reliability. This means that the problems for GM, Ford and Chrysler are not over. To compete it is crucial for domestic US manufacturers to further improve reliability.
General Motors is working very hard to improve its image and change customer perception, however, quality problems keep occurring. Following three recalls last February, GM is now recalling over 93,000 Oldsmobile Aurora sedans because of a fuel leak that could cause fire. The manufacturer also temporarily stopped distribution from an assembly plant on Friday due to a problem that could cause transmissions to fail in some of its 2004 SUVs and pickup trucks.
In Europe, GM’s three-year turnaround effort is slowly starting to show results. The manufacturer, which depends largely on its Opel unit, is banking on its new Astra model to gain sales and market share. The new Astra’s stylish design might characterise a new beginning for GM’s product line-up strategy as European competition relies more and more on design. However, GM could be looking at more production cuts in Europe if the new Astra is not a hit.
In both Europe and the US, design and reliability are essential to stay in the market. If GM still repeatedly has to recall vehicles, its efforts to change customer perceptions will all come to nought.
SOURCE: DATAMONITOR COMMENTWIRE (c) 2004 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.
