GM may not have enough new models to win market share this year

Article by Christian Andrei, on January 17, 2011

Analysts say that despite General Motors Co.’s efforts to introduce cars at the North American International Auto Show that are meant to rival the best, it still doesn’t have enough new models to get the widest market share this year.

According to analysts at Credit Suisse Group AG, JPMorgan Chase & Co. and Morgan Stanley, the problem with GM's lineup is that it’s older and is inferior to competitors such as Ford Motor Co. They also said that GM doesn’t have enough new cars and its rate of replacement is slow.

Bank of America Merrill Lynch said that the carmakers that have faster rates of replacing vehicles tend to increate their market share and this helps boost profitability. Last Monday, GM CEO Dan Akerson introduced the Chevrolet Sonic at the Detroit show. This is one of the first new vehicles shown since GM had its initial public offering in November.

GM intends for the Sonic and Buick Verano to fill holes in its car lineup and to boost its earnings momentum in its most profitable market.

Jim Hall, principal with consulting firm 2953 Analytics Inc. in Birmingham, Mich., said that GM needs to “use the arrows they've got in the quiver.”

He explained that GM has to focus on marketing. According to Bank of America Merrill Lynch's annual “Car Wars” report published last year, GM's product replacement rate will trail the industry this year and is predicted to be in line with rivals in 2012 and 2013. [via autonews - sub. required]

Topics: gm, united states

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