GM Revs Motors In Race To Recoup Lost Market Share

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Researched by Industrialinfo.com (Industrial Information Resources, Inc.; Houston, Texas). General Motors Corporation (NYSE:GM) (Detroit, Michigan), according to Bob Lutz, Vice Chairman for Product Development, plans to spend millions on its new or redesigned mid-sized cars in the next three years in order to bolster its lagging North American market share. In recent years, foreign automakers, most notably Toyota (NYSE:TM) (Japan/Erlanger, Kentucky), Honda (NYSE:NMC) (Japan/Torrance, California), Nissan (Nasdaq(SC):NSANY) (Japan/Gardena, California), Mercedes Benz (NYSE:DCX) (Stuttgart, Germany), and BMW (Bayerische Motor-Werke, Munich, Germany) have been making ever-greater inroads into the North American market, largely due to their innovative designs, leading-edge technology, and quick response to their perceptions of what North American drivers want in an automobile.

Japanese, German, and Korean automakers have been methodically increasing their share of the North American automotive market in the last decade through planned production goal increases, and they seem poised at present to take an even more aggressive bite out of the North American market, especially in the U.S. Toyota has already begun one new truck plant in Baja, California (Mexico), and has just recently announced a second one to be built near the first one. They also have several parts manufacturing plants in Mexico. Toyota will announce in December another large assembly plant to be built, most probably, in San Antonio, Texas, in which its Hino Motors unit will more than likely take part. Nissan is building a huge complex in Canton, Mississippi, the size of which they doubled before the first one was finished. This is certainly a clear indication of their North American expansion designs. Not to be outdone, Korean automaker Hyundai has recently begun construction of a large plant in Hope Hull, Alabama (near Montgomery), also bringing in many of its home-grown suppliers. (See related articles: Is the Deep South the "Detroit" of the Auto Making Industry for the 21st Century? and Detroit's Big 3 Restructure while Foreign Automakers Attempt to Muscle in on the US Automakers)

If this isn't enough to give the Big 3 a bad case of the jitters in an already nervous market, it's hard to say what would. General Motors, in a determined effort to buck up its decreasing market share, has decided to emphasize its mid-sized car line, which seems to be what the public is demanding. GM will offer new car models in its Chevrolet, Pontiac, Buick, and Saturn lines in the next three years.

A new Pontiac Grand Prix will debut in early 2003, and a spiffed-up model of the Chevy Malibu will be available later that year. Pontiac will offer its new Pontiac Grand Am in late 2004 (260,000 a year from the Kansas plant, and 240,000 a year from a Michigan plant). Saturn plans a new model for 2005, and Buick will roll out a new Regal. Chevrolet also plans to offer new Chevrolet Impala and Monte Carlo models for 2005 to be assembled at its Oshawa, Ontario, plant.

It still remains to be seen if these measures are enough to recoup some of GM's market share losses, or if they are too-little-too-late, but at least it's a start.