LAS VEGAS - The cure for General Motors' ailing market share lies in a crop of new entry-level vehicles to be launched in the next four years, the automaker says.
GM is relying on overseas companies - Toyota Motor Corp., Isuzu Motors Ltd., Suzuki Motor Corp. and Adam Opel AG - to bring the new vehicles to market.
By 2004, GM will introduce seven new products aimed at younger buyers. GM will de-emphasize cars in the new lineup and concentrate on small trucks and crossovers that blend characteristics of cars and trucks.
The entry-level market - vehicles that sell for less than $20,000 - accounts for one of every five vehicles sold today, GM said. Only Chevrolet, Pontiac and Saturn will carry the entry-level vehicles, said Ron Zarrella, president of General Motors North America. Zarrella laid out the strategy in a speech here Tuesday, Oct. 31, at a conference held by J.D. Power and Associates.
'In the entry level, we've lost a lot of market share and a lot of young customers,' Zarrella said.
'I do believe that this will stop our market share decline.'
GM's share of the U.S. vehicle market, including Saab, tumbled from 31.3 percent in 1997 to 29.4 percent at the end of 1999. Through October of this year, GM's share was down to 28.6 percent.
When the new-product offensive is complete in 2004, GM expects its entry-level sales to rise to 1 million units annually compared with 850,000 units today, Zarrella said. That 1-million-unit target also takes into account a cooling off of the auto sales market, he said.
'The main obstacle is to build the right kind of product without losing money,' Zarrella said.
'We lose a lot of money today in small cars, and we sell more small cars than anybody else.'