GM: We’re Happy to Be Number Two

[nadepalma]

Source: The Car Connection

GM: We’re Happy to Be Number Two



“We’re number two, but we try harder.”

Okay, maybe I’m just getting up in years, but I’m sure a large number of TheCarConnection.com’s loyal readers remember that classic ad tagline from Avis, the rent-a-car also-ran. But soon, you may begin hearing the same line from the folks at General Motors.

For a brief, shining moment, Toyota actually outsold the General, during the second quarter of 2007, though it slipped back during the rest of the year. In 2008, if the Japanese maker holds to its production plans, it very well may take the top spot again, and this time hold it, cautions analyst Joe Phillippi.

Does it matter? Depends on whom you ask. The folks at Toyota, notably including CEO Katsuaki Watanabe, insist they’re not paying attention. Believe it, if you wish. There’s little doubt that being number one, in-and-of-itself, is indeed not the driving force at Toyota, but growth is definitely part of their plan, and if they can flip past GM, in the process, so be it.

As to the U.S. maker, it’s been the industry’s global leader for three quarters of a century, ever since Henry Ford decided to hang onto his Model T a few years too long. Being top dog has been a matter of pride and passion, but according to some senior executives, it no longer matters.

“It sells newspapers,” insists Vice Chairman Bob Lutz, “but to us, operationally, it has no impact, whatsoever.” If anything, Lutz tells TheCarConnection that falling behind Toyota may be a good thing. “There’s a certain benefit to the internal culture to being number two.”

We’ll leave it to you to decide whether that’s just a self-serving or self-deluding way to look at the current situation. But it certainly underscores the dramatic changes the auto industry is undergoing, both here in the U.S., and around the world.

Now consider these figures: It wasn’t all that long ago that North America accounted for three of every four cars GM sold. Today, however, that’s down to 50 percent. And with the automaker pushing hard in emerging markets like China, Russia and India, Lutz predicts the share will soon slip to just 25 percent.

“The United States is become smaller and smaller and smaller, and in not too many years, it’s going to tip,” says the septuagenarian executive.

What does that mean? A number of things.

First, as GM expands overseas, internationally, it is shifting resources to growth markets, like China and India. They get the new plants and lots of new products.

And the products developed for more stable and established markets, including the U.S. and Western Europe, are less likely to be unique. Take the new Saturn Astra, which is also sold around the world as the Opel Astra, and it was primarily designed and engineered in Europe. The little Chevy Beat minicar, which GM recently approved, was developed in Korea and will be built in a variety of global plants, but almost certainly not in the U.S., even if it’s eventually sold here. The exception will be niche products, like pickups, which may be limited to a few, key markets.

“If our returns (from a market like China) are way, way beyond what we get in the U.S., guess where our money is going to go,” asks Lutz.

MORE HERE

[windvale]

I'd rather be #1 in building great cars and great profits. I'll happily leave #1 in total units to the Borg (i.e. Toyota).

[nascarnate326]

Originally Posted by windvale

I'd rather be #1 in building great cars and great profits. I'll happily leave #1 in total units to the Borg (i.e. Toyota).

Couldn't agree more. We need quality, not quantity.

[likearock00]

Or dead last.....in recalls!!

[smokyn454]

When you are #1, you tend to get lazy and lose your edge. You lose that drive you have when you are lower ranked. As long as you aren't #1, you will always have the drive.

I actually think GM is better off for this. Let Toyota take the heat for a while now.

[jkennedy293]

I believe Lutz when he says they don't care about being #1. I can't remember a single time in the last 20 years where GM bragged about being the world's largest automaker. They never espoused it in advertising, or leveraged the title in other ways to gain sales. It only started to matter to the media once Toyota started getting close. It is drama created by the media to sell papers.

I'll admit there is a certain amount of bragging rights that come with the title, but it doesn't change anything. I mean, Toyota is not going to be viewed any differently if they beat GM in global sales, and neither is GM.

[nadepalma]

I agree with others - Better to profitable and to produce competitive products than to hold onto a title that may not mean very much in the long haul. Granted, being number 1 is part of GM's DNA, but if they fall behind, so be it. I'd rather have them be a bit scrappy and push into all these new markets.

Of course, if GM does have some great successes along the way and is able to push into all these new markets, I'd just LOVE for them to go and try to make a real assult on the Japanese home market. As GM finds success in other markets, if they can deliver consistent, exciting, and quality products, then I'd love to see this happen.

For example, selling Chevrolet's European lineup in Japan or cherry picking certain global products to push into JDM, would be a nice! And if they can product most of these cars in places like Korea or China and import them into Japan, then it would be even more ironic considering how Toyota, Honda, Nissan and others got their start in the US market.

[windvale]

As long as the Chevy brand kicks the s**t out of the Toyota brand I'm happy...

[Perian]

Happy to be #2?

You would never know it by their level of incentive spending.

Saturn Vue has $3500 on the hood here in New York!*



*Includes GM owner loyalty rebate which is not available to all consumers.

[tgagneguam]

Funny, the close of their press releases include interesting statements about GM's place in the world. The statement below is lifted directly from one of yesterday's (01/17/08) press releases:

General Motors Corp. (NYSE: GM), the world’s largest automaker, has been the annual global industry sales leader for 76 years. Founded in 1908, GM today employs about 274,000 people around the world. With global headquarters in Detroit, GM manufactures its cars and trucks in 35 countries. In 2006, nearly 9.1 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM’s OnStar subsidiary is the industry leader in vehicle safety, security and information services. More information on GM can be found at www.gm.com

Nope, it sure sounds like it doesn't matter one bit to the Company.

Lutz, your statement is atypically disingenuous, and I think you know it. It comes across to me more in a way that you all see the writing on the wall.

[andy82471]

Originally Posted by tgagneguam

Funny, the close of their press releases include interesting statements about GM's place in the world. The statement below is lifted directly from one of yesterday's (01/17/08) press releases:



Nope, it sure sounds like it doesn't matter one bit to the Company.

Lutz, your statement is atypically disingenuous, and I think you know it. It comes across to me more in a way that you all see the writing on the wall.

GENERAL MOTORS CORP the world's largest automaker.

OOPS!!! Looks like it is time to modify your website GM. Can't say you are the biggest anymore. Give me a break !!!!! Being No.2 must be hurting Lutz and the gang no matter what kind of delusional spin they try to put on it.

[Ambalanche]

I just want the tag to re-appear on the underline of GM's logo "Mark of Excellence" and when people see it, believe it!

[mbukukanyau]

Originally Posted by jkennedy293

I believe Lutz when he says they don't care about being #1. I can't remember a single time in the last 20 years where GM bragged about being the world's largest automaker. They never espoused it in advertising, or leveraged the title in other ways to gain sales. It only started to matter to the media once Toyota started getting close. It is drama created by the media to sell papers.

I'll admit there is a certain amount of bragging rights that come with the title, but it doesn't change anything. I mean, Toyota is not going to be viewed any differently if they beat GM in global sales, and neither is GM.

In most of the Anti American world, it will be viewed the demise of American hegimony.
But Given the pace at which Chevy is growing around the world, Toyota will not hold that title for long

[Road Kill]

The initial shock of losing the #1 position was a bit heartbreaking but I do feel that in the long run GM will be better for it.

[56 Starchief]

Originally Posted by tgagneguam

Funny, the close of their press releases include interesting statements about GM's place in the world. The statement below is lifted directly from one of yesterday's (01/17/08) press releases:



Nope, it sure sounds like it doesn't matter one bit to the Company.

Lutz, your statement is atypically disingenuous, and I think you know it. It comes across to me more in a way that you all see the writing on the wall.

This is just the corporate boilerplate, in PR speak. It is a standardized company profile at the end of every news release. It is a concise representation of what the company is, designed so that if a reader were to just read that blurb, they would understand what the company is about. Yes, being the largest automaker is a key facet of GM. It is not, however, editorializing on the part of the PR department.