Slicing and dicing for the silver lining

[Globalist]

Slicing and dicing for the silver lining

By Edward Lapham
Automotive News / May 23, 2005

Mark LaNeve points to an interesting metric to show that General Motors isn't faring as badly as some people think: market share points per brand.

LaNeve, GM's vice president of North American vehicle sales, mentioned the measurement in passing at a media briefing last week during which he and marketing/ad chief Brent Dewar explained GM's new brand focus to reporters.

You don't hear that comparison used much, but it sounds impressive, especially since LaNeve says it shows that GM is still in the ballpark with the competition.

OK. So let's do the math.

For the first four months of this year, the three Toyota Motor Sales brands averaged 4.4 points of market share.

Then came American Honda's two brands, with 4.1 points each.

Next was Nissan with an average of 3.3 points for its two brands, which put it neck-and-neck with GM, whose eight brands averaged 3.2 points.

DaimlerChrysler's five brands averaged 3.0 points and Ford Motor Co.'s seven brands averaged 2.7 points.

How significant is this metric?

You can break it neatly into tiers: Toyota and Honda have better than four points for each brand; Nissan, GM and DaimlerChrysler have three points or better; Ford, less than three points.

Nothing startling there.

But if you exclude non-North American brands to measure the performance and market strength of the traditional North American factories, the numbers change.

GM's six core brands - Chevrolet, Pontiac, Buick, Cadillac, Saturn and GMC - average 4.2 points.

The Chrysler group's three brands - Dodge, Chrysler and Jeep - average a strong 4.7 points of share. If you throw in Mercedes but not Maybach, the average is about 3.8.

Meanwhile, Ford's three North American brands - Ford, Lincoln and Mercury - have a whopping average of 6.0 points of share.

What does this all slicing and dicing tell us?

If you're trying to refocus your brands, the statistical wizardry makes it easy to see which ones are below average and need help, as if it weren't already obvious.

But here's the dose of reality: No matter how you cut it, in the aggregate GM still had 25.6 of the U.S. light-vehicle market.

Not all brands are created equal. So by definition, some must be below average. In GM's case, Pontiac, Buick and Saturn are below average. They need help.

GM says help is on the way. But don't expect dramatic changes in the statistics anytime soon.

Incremental sales from underperforming brands still help keep the factories humming.

You may e-mail Edward Lapham at elapham@crain.com

[Globalist]

Here is the proof that GMI is becoming a source of inspiration for GM executives. In March 23rd, I wrote:

Re: GM Says It May Kill Off One of Its Brands

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

Difficult to pick which brand should go. No matter what you do, you won't satisfy all enthusiasts.

Maybe GM should define an efficiency metric for each brand taking into account sales, sales growth, loyalty and what does it cost to market each brand. A tired brand will be the one where you are putting too much money without substantial results. Then the question is maybe they don't have the right products, and let's give them the right products, and we will be talking about the same topic in 10 years.

[KingElvis]

I suggested in the Buickman thread that GM combine Hummer Saab and Cadillac - and I read in the NY Times weekly auto email that indeed, GM will encourage this combination.

Also, I've been beating another certain horse to death, namely that GM should get rid of overlap models...and voila.

On Thursday they announce their new idea to pair down Buick, Pontiac and Saab 'overlap' models.

The plan to keep Chevy and Cadillac as "full line" to me seems like a fatal flaw though.

What if CHevy has a $30G 'high end' performance sedan and Cadillac offers a $30G 'entry luxury' sedan? Who will bother with Buick and Pontiac? If you can get a fast Chevy and value Cadillac - Buick and Pontiac will be left out in the cold.

Anyway Globalist, you and I should start an auto consultancy. Are you listening LaNeve? We want to get paid!

[Globalist]

Originally Posted by KingElvis

Anyway Globalist, you and I should start an auto consultancy. Are you listening LaNeve? We want to get paid!

Why not. We should talk about it.

[KingElvis]

I adjusted my settings so I should be getting email from members now.

I tried e mailing you a note. I thought your exchange with Buickman was particularly interesting. You've got some real experience there.

[Globalist]

Thank you. I am reading your email right now.
And Congrats for your book: "Horsepower War." I will send you my thoughts later.
I am working on a book project and I would like to learn from your experience.
Also explore consulting opportunities with you.