July 18, 2006
Sales Down 12% ... GM's Strategy is Working
Posted by Gordon Smith

GM CEO Rick Wagoner briefed his board of directors about his discussions with Renault/Nissan CEO Carlos Ghosn, but the companies are wading through a self-imposed quiet period while they sort things out.

In the meantime, GM's top North American sales and marketing executive claims that the company's strategy of avoiding deep discounts is working, even though sales are down 12% over last year: "First you have to stabilize it. Then you can make it go in the right direction."

How is GM going to turn this thing around? By selling lots of BIG VEHICLES:

Starting late this year, GM will start rolling out three new eight-passenger "crossover" vehicles that will offer the room and seating capacity of large sport-utility vehicles but ride smoother and consume less gas.

"Consume less gas" means they will get about 25 mpg. On the highway.

GM is also counting on Saturn to be a "conquest brand." This is the same brand that, just over two years ago, was struggling so badly that it had to surrender its independence from other GM brands. Count me skeptical, even though the Sky is a very cool car.

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