During its 2005 full model line preview in Detroit, General Motors expressed optimism about USA auto sales. It expects an industry-wide result in the low 17 millions for 2004 with modest growth in 2005.
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GM is going into the 2005 model year with a focus on new products to built strong brands and capitalise on favourable economic trends.
“The US market is an intensely competitive business with rapid product changes”, said Paul Ballew, GM executive director of global market and industry analysis.
Ballew forecast continued growth in the luxury segment and in trucks. He added that the average vehicle transaction price in the USA rose to $US27,023 in 2003, up from $ 26,249 the year before. One reason for rising transaction prices is a 30% improvement in the affordability of vehicles compared to just over a decade ago, based on a vehicle cost as a percentage of personal income.
According to Ballew, this improved affordability is helping foster the trend of consumers buying more expensive vehicles, with luxury vehicles sales in USA market reaching 1.8 millions units a year and one-third of all vehicles sales having a transaction price of $US30,000 and up. As a result, industry revenue gains are forecasts to be in the 6% to 7% range this year and next.
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By GlobalDataGM is paying close attention to productivity. The latest Harbour Report study showed that the automaker posted a 5.2% overall improvement in its North American manufacturing productivity over the last year, and its overall productivity has improved 25% over the last six years. In the 2004 study, GM assembly plants led eight of the 14 categories and took four of the top five spots in the overall assembly plant rankings.
The automaker will try to maintain the positive momentum at Cadillac, GMC and Chevy Trucks and is investing in revitalising the Buick, Chevrolet car, Pontiac and Saturn brands.
As an example, GM is investing $ 3.2 billion in Buick to create an all new product portfolio by 2006. With this Buick is beginnin a renewed emphasis on cars while continuing to build momentum on the truck market. For 2005, Buick will introduce the Terraza seven passenger premium crossover sport van, and will show, in late 2005, a 2006 model year vehicle to replace the LeSabre car line
GM also wants to leverage its Saab and Hummer brands. Saab will double its product portfolio in 2005 with the introduction with the all wheel drive (Subaru-built) 9-2X and (GM USA-built) 9-7X. The 9-7X midsize SUV introduces Saab into the growing luxury SUV market and Hummer is adding the H2 SUT, a new body style for the H2 line featuring a cargo bed in the rear that is adaptable and expandable.
In mid-2005 the brand portfolio will be increased with the launch of the midsize H3 SUV.
Rogério Louro
