GM is Coming Back!

There is an axiom in the automobile business that says the best time to gain market share is in a down market. The reason for this is that when the economy is down, consumers are much more cautious with their spending, and purchase more out of need than emotion. It takes fewer sales to move the needle as the denominator in the equation is smaller. The trend is that once you gain market share in a down market, it is easier to retain it when the market heats up.

In each of the past three recessions since the 70’s the imports have gained market share only to retain it moving forward. In the 70’s the imports were cheaper. In the 80’s the quality story kicked in as the imports had fewer defects per thousand cars built than did the domestics. In the 90’s the imports dominated the fuel economy story and although they had become a bit more pricey than the domestics, offered new styling and good value.

Back in the 90’s GM decided to hire the best designers and engineers in the world, and go on a mission to build the best cars and trucks in the world. In spite of a lot of bumps in the road GM has done it, and the world is just now beginning to figure it out. While this was happening, Toyota began to learn what it is like to play in the same league as GM, and is now suffering from some of the diseases that plagued GM.

Toyota has suffered from class action law suits for engine sludge, frame rust through problems with Tacoma and more recalls than vehicle sales. Toyota’s service satisfaction scores are way below industry average while all of GM’s brands are way above industry average. And the flagship Camry V6 is no longer a recommended buy on Consumer Reports.

GM now is the fuel economy leader in more segments than any other manufacturer with the most models that get over 30 MPG highway. The 37 mpg Cobalt, and 33 mpg Malibu Hybrid prove that you can get great fuel economy without having to sacrifice room. GM had 29% market share in September, the highest in almost a decade and new offerings in the 09 model run will continue that growth. GM’s crossovers are dominating the industry and the new Chevy Traverse will be a market leader.

Chevrolet alone is on track to pass Toyota by year end as the best selling brand in America. The Chevy Silverado will absolutely smoke the Ford F150 in sales and the ashes will cover the also ran Tundra. Chrysler is going to build the trucks for Nissan because the truck they built didn’t sell and VW is asking Chrysler to build their vans. GM will sell over 9 million vehicles world wide and if GM was allowed to compete in Japan, the race for #1 in the world wouldn’t even be close. GM is still expected to win this year.

GM is back because of world class styling, quality and fuel economy. What is best is that it is an American company. And I might add that the Chevy Volt, the first mass production plug in hybrid will change the auto industry for ever, doing for GM what the Prius did for Toyota times 10. Folks, the economy may be bad, but GM is back and will dominate the automotive world once again. Drive safely.