GM taps into Los Angeles market
Automaker unveils fuel-efficient, 'green' vehicles in hopes of capturing
The Detroit News
Los Angeles -- Though General Motors Co. stabilized its U.S. market
share in the third quarter, it is slipping in the nation's largest auto
The Detroit automaker hopes to change that with a fleet of
fuel-efficient and "green" vehicles it unveiled at the Los Angeles Auto
Show. The cars the automaker showed off here should appeal to
Californians and could help meet Chairman and interim CEO Ed Whitacre's
mandate to boost revenue and market share, analysts said.
And there's no better, or tougher, place to try than California, a land
dominated by Asian imports.
The four vehicles promoted at the show -- the Buick Regal midsize sedan,
Chevrolet Cruze compact car, Chevrolet Volt extended-range electric car
and Cadillac CTS coupe -- also could help change perceptions among
consumers who otherwise would never consider a GM vehicle due to past
The Regal and Volt, however, are at least a year away from hitting
showrooms and analysts say GM needs to post gains quickly, as evidenced
by President and CEO Fritz Henderson's forced ouster Tuesday in part
because the board didn't think he'd made enough changes.
"I think it is an opportunity, especially when their share is as low as
it is in California," said auto analyst Erich Merkle of Autoconomy.com
in Grand Rapids. "Ford is much closer to making inroads with the Fiesta
and following it up with the Focus about six months later. That's a
couple solid subcompact and compact vehicle offerings from Ford right
around the time the Cruze launches (in third quarter 2010). GM does have
a plethora of small vehicles coming out, but it's going to take some
time to get to market."
Susan Docherty, vice president of sales and former Buick-GMC general
manager, acknowledged the importance of California, saying the state is
critical to GM's survival and transformation.
GM's U.S. market share in the third quarter was 19.5 percent, flat
compared to the first half of the year, but its share of the California
market has plunged 2.7 percent this year, according to the California
New Car Dealers Association.
That's a steeper decline than even Chrysler Group LLC, which has
struggled mightily the past year. Of Detroit's Big Three automakers,
only Ford Motor Co. gained market share in California this year,
according to the dealer's association.
GM's share in California through September was 11.5 percent, trailing
Ford by a percentage point and less than half of Toyota Motor Corp.'s
24.2 percent share.
GM continues to suffer from perceptions formed in the late 1970s and
early 1980s when quality plummeted and drove consumers toward
better-built, more fuel-efficient Japanese imports, California dealers said.
Those perceptions haven't been erased despite advances GM has made,
particularly with fuel-efficient crossovers. There are signs of
progress, dealers said.
"Now, it's just all about perception," said Scott Allen, who owns a
Cadillac dealership east of Los Angeles. "We need consumer perception to
move off of 'my dad bought a Toyota and told me never to buy anything
The state's power to influence and change perceptions helps explain why
GM this week confirmed the Volt will be sold in California, along with
select other markets, before the car is available nationally.
Allen was buoyed by GM's heavy presence at the auto show, particularly
with the Volt, which is targeted toward environmentally-conscious consumers.
"If the product hits the ground and is well-received in California, that
will flow throughout the country pretty quickly," Allen said.
The Volt, likely won't boost GM's share in California, but could help
The Volt won't be a high-volume car, at least initially.
GM plans on producing about 8,000 Volts for the 2011 model year before
eventually expanding to as many as 60,000, Vice Chairman Bob Lutz said
during his keynote speech at the auto show Wednesday.
Buick's high-volume models could make up for that, however.
GM said sales of the new LaCrosse in California, which launched this
year, are up 53 percent year-to-date compared to sales of the prior
model last year. In October, LaCrosse sales in the state increased 207
percent compared to the same month a year earlier.
The 2011 Buick Regal, unveiled at the auto show, is being counted on to
continue the transformation of a brand that historically draws older buyers.
The modern sports sedan, based on the GM's European Opel Insignia, is
scheduled for production in the first quarter of 2011. It will get at
least 30 miles per gallon and feature a 2.4-liter 4-cylinder engine or
optional 2.0-liter turbo-charged version.
"The car certainly has more California appeal than anything Buick has
had traditionally," said Michael Richards, the new head of Buick-GMC.