General Motors vice chairman Bob Lutz said on Wednesday the weakening US dollar and better quality vehicles are putting his company on equal terms at home with Japanese and European competitors, according to Reuters.
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“With the dollar at the current level, we have a much more level playing field,” Lutz told reporters at a press briefing [for new car models], Reuters said.
According to Reuters, Lutz said the weaker US dollar will make it more difficult for foreign car makers to grab US market share.
After rising steadily for two years, the dollar has dropped by about 12% against the yen and about 19% against the euro since a peak in February, Reuters said.
Reuters noted that General Motors, Ford and the Chrysler arm of DaimlerChrysler appealed to the White House earlier this year to pressure Japan to stop weakening the yen to boost the profits and competitiveness of Japanese car makers.
Reuters added that GM and Ford executives said earlier this year that the weak yen gave Japanese car makers a 30% profit advantage over their American competitors but Japanese rivals have disputed that, asserting that their superior products, and not the weak Japanese yen, are behind their US market share gains.
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By GlobalData
Reuters said that Honda last month cut its full-year profit targets partly due to expectations that the stronger yen will hurt its earnings from North America, its largest market.
According to Reuters, GM moved into third place earlier this year, behind Toyota and Honda, among multi-brand car makers in JD Power and Associates Initial Quality Survey, a key industry quality study.
Last week, based on improved quality reports, seven GM vehicles won new recommendations from Consumer Reports, an influential reference for millions of car buyers, Reuters added.
Pointing to GM’s better scores, Lutz said the difference in quality between GM, Honda and Toyota is “negligible”, Reuters said.
“I think you’re seeing the beginning of the end of clear-cut domination of imports over domestic brands,” he said, according to Reuters, adding that it would take time to change the public perception of American car quality.
According to Reuters, Lutz made his comments at a press briefing for GM’s upcoming Pontiac Grand Prix and Chevrolet Malibu Maxx, two out of at least 10 new or restyled mid-size vehicles the car maker plans to launch by 2006.
“If this multi-billion dollar assault does not provide (US market) share, I’d be seriously surprised and cruelly disappointed,” Lutz said, according to Reuters.
Lutz said that US vehicle sales for November looked a “little bit below expectations”, Reuters reported, but he added he was unsure how they would compare to October, when US sales fell to their lowest rate in four years.
