To sell down its remaining 2009 inventory, General Motors Co. is launching an incentive program for each of its four brands that begin November 18. Chevrolet has the "Red Tag Sale," Buick-GMC will go with the "Holiday Event" and Cadillac will have the "Seasons Best" sale.
At a press event, Susan Docherty, GM's vice president of U.S. sales, said that there will be a "little bit of carryover of that" into the first quarter of 2010, but the objective is to keep GM's inventory somewhere between 425,000 to 450,000 units.
Docherty said that she expects GM will clear out the 2009 model year inventory by January. She also says that the Pontiac and Saturn brands will likely be completely winded down by the end of the first quarter, much earlier than expected. Currently, GM has only about 10,000 Pontiac vehicles and 8,000 Saturns remaining.
GM is able to hold its US market share at 19.5 percent. For the month of October, GM sales rose 5 percent compared with October 2008.
GM's retail sales went up 15 percent in October, and fleet sales fell by 27 percent compared to a year earlier. Docherty asserted though that she prefers "very slow, incremental movement up" in market share than the peaks and valleys GM experienced in 2008 and in the first half of 2009.
The automotive industry, especially in the US, experienced a deep crisis starting 2008, as caused by a number of factors such as environmental politics regarding carbon emissions, the sudden drop in demand in SUVs and pickups due to the rising fuel prices, global financial crisis and others. It severely affected the Big Three – GM, Ford and Chrysler.
GM had already been posting annual losses even before the automotive crisis. In November 2008, GM said it might run out of cash around mid-2009 without a combination of government funding, a merger, or sales of assets. General Motors has already shed several brands, closing Saturn, Pontiac, and Hummer.
On June 1, 2009, General Motors Corp. and certain of its subsidiaries filed for Chapter 11 bankruptcy process. On June 5, 2009, the court approved the sale of nearly all of General Motors Corp’s assets to a new and independent company -- NGMCO Inc.
When the sale was closed on July 10, 2009, NGMCO changed its name to General Motors Co. while General Motors Corp. also changed its moniker to Motors Liquidation Company (old GM). Old GM would continue the bankruptcy proceedings to settle with its bondholders and on other liabilities.
General Motors Co. was initially owned by a number of stakeholders, including the old GM with 10 percent and the US government (through the US Department of Treasury) with 60.8 percent. Canada and Ontario governments took a stake of 11.7 percent while the UAW retiree medical benefit trust VEBA (Voluntary Employees' Beneficiary Association) acquired a stake of 17.5 percent.