General Motors has said it expects new vehicles to account for nearly 40% of showroom sales in 2007 as it rolls out products designed under a new system to cut costs and revive brands.
Go deeper with GlobalData
Executives of the automaker, meeting with reporters and analysts last night, also told Reuters a key push for the automaker in 2007 would be to take steps to drive gains in the residual value of its vehicles – a key consideration for new car buyers and lease underwriters.
The news agency said the steps outlined by senior GM executives are part of the automaker’s strategy of moving beyond the cost cutting that has characterised its turnaround effort this year to show that it can grow revenue without resorting to costly sales incentives.
According to Reuters, GM’s overall US sales were down 8% in the year to November and the company is banking on the success of new cars and car-based “crossover” vehicles – including models for its Saturn, Buick and Cadillac brands – to grow revenue.
GM chief executive Rick Wagoner told Reuters GM had increased its capital spending by $US1.5bn (GBP760m) over the last two years and would continue to invest more to drive sales gains.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“Next year will be a very important year for us on the revenue side,” Wagoner reportedly said, adding GM expected its sales from launch models to rise from 20% of US sales this year to nearly 40% next year.
GM’s product development chief Bob Lutz told Reuters GM intended to stake out a reputation for exciting design even as it drives down costs by building more vehicles on common platforms – an area where rivals such as Toyota are seen as having a large lead.
Lutz reportedly said future versions of GM’s current-generation of small cars – the Astra built by its Opel-subsidiary and the Aveo built by Korean affiliate Daewoo – would share a single platform. “They will all come from the same Lego set,” he said.
Lutz also told reporters that GM had earmarked elements of its global development to teams in different countries seen as having particular expertise.
For example, future mid-market sedans would be developed by a team based in Germany, development work for small SUVs and light pickup trucks would be done mainly in Brazil, leaving engineers in the United States to focus on full-size pickups and SUVs, he told Reuters.
Lutz reportedly said GM’s progress in integrating its own operations showed that rejecting an alliance with Renault-Nissan was the right choice.
“We said we didn’t need an alliance to achieve this,” Lutz told Reuters. “And this is why – we are achieving an international alliance within GM.”
