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GM Sales Chief Focuses on Retail Share

Mark LaNeve says he would like to see Cadillac compete against the Mercedes S-Class and BMW 7-Series.

NEW YORK – Conceding that General Motors Corp.’s overall volume will decline this year and next, Mark LaNeve, vice president-sales, service and marketing, says the auto maker increased its retail market share in 2006 and that is where he is focusing.

“Retail sales are up 1.2% this year,” LaNeve says, adding GM’s overall market share this year was 24.7% through November. “I’ll be thrilled out of my mind to grow 1/10% this year. “We feel we have growth ahead of us.”

He suggests new portfolio entries could help GM sales grow. “For instance, Cadillac is not competing in the ultra-luxury segment yet.”

LaNeve says he would like to see Cadillac compete against the Mercedes S-Class and BMW 7-Series. And a new global product below the CTS also is being considered for the brand’s portfolio.

LaNeve credits retail market-share gain for GM’s decision to reduce sales to rental-car fleets. The auto maker’s fleet sales have declined by 150,000 units this year, while total industry fleet sales have climbed, he says, adding, “We’re going to take another major step (to reduce rental sales) next year.”

The GM sales chief says he plans to attack the marketplace in every segment in 2007. Other targets for the year include increasing GM sales on the coasts and improving customer retention.

LaNeve says he would like to lower incentives further while consolidating brands into three channels. These include combining Buick, Pontiac and GMC dealers into one channel, premium brands into another and Chevrolet into a third.

GM has lost market share because there are more brands competing in more segments. “It’s very difficult to withstand that,” LeNeve says, but adds the growth imports have enjoyed by entering new segments “is behind us.”

He predicts GM can begin to turn the tide by competing more vigorously in segments where it was weak. “We now have 22% of the small (cross/utility vehicle) market,” he says.

New products from Buick, GMC and Saturn will help GM achieve share gains in the segment, he predicts. “The next 10 years will depend on execution and the ability to create new segments,” LaNeve says.

Meanwhile, he sees significant opportunities for GM to redefine the market for CUVs. “These vehicles have the space of minivans and the utility of SUVs with better fuel economy.”

LaNeve forecasts the CUV market will grow by 1 million units between now and 2010. GM’s CUVs – the GMC Acadia, Saturn Outlook and Buick Enclave – will have a combined volume of 120,000-130,000 units, he predicts.

GMC will have the highest volume and Saturn will be close behind. “Buick’s share will be less,” he says.

LaNeve also promises new model entries will grow GM’s share of the midsize car segment. He cites the new Saturn Aura as an important element in GM’s turnaround in the category.

The auto maker’s 5-year, 100,000-mile (160,930-km) warranty also plays a big role in GM’s strategy to increase sales.

“We couldn’t afford to do this five years ago,” LaNeve says. But the actual cost of GM’s warranty expense has seen a steep decline, he notes. “So we could dramatically improve our warranty.”

Early customers value the improved warranty to be worth $1,000-$2,000. “We want our customers not to worry about our products,” he says.

LaNeve says all GM brands are profitable, or close, when analyzing contributory costs. He defines this as revenue minus incentives and material costs.

“That’s how my team calculates profits,” he says. However, this does not include fixed costs. “How you allocate fixed costs is a very tricky business.”

Looking toward the future, LaNeve is confident GM will withstand the onslaught by Toyota Motor Corp.

“There’s room for more than one car company in the world,” he says. “If Toyota succeeds, it doesn’t mean we fail.”

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