General Motors Corp., best known for making quality trucks and sport utility vehicles, now has to convince buyers its upgraded cars are just as good as its trucks and worth more money.
That's essentially the business plan for the reconstituted GM, the one that is trying to make it in a U.S. market where people no longer want 42,000 U.S. dollar Chevrolet Tahoes that get only 14 miles per gallon in the city.
Yes, the plan still includes selling a lot of pickups and SUVs, but nowhere near the volume of past years when GM could count on pocketing upward of 10,000 dollars on every big vehicle.
Instead, the revenue to sustain the nearly century-old industrial giant will have to come from cars, which have typically made only hundreds of dollars in profits. Better cars, and lots of them.
"We just need to do it really well," President and Chief Operating Officer Fritz Henderson said in an interview. "Let's do cars that people love, even if they're small, and if you do that, you're going to get better pricing."
The change has come quickly. Faced with high gas prices and a weak economy, GM's sales fell 16 percent for the first half of the year, with trucks off 21 percent and cars down nearly 9 percent. GM has lost billions of dollars during the last three years. The company on Tuesday announced a combination of cuts, borrowing and asset sales that would raise 15 billion dollars to weather the recent slump in U.S. auto sales and the rapid shift from trucks to cars.
Henderson, who concedes that GM has some repair work to do on its car brand image, says the change will have to come one or two models at a time. It will follow the path of the new Chevrolet Malibu, which saw sales jump 46 percent in the first half of the year and average sale prices rise 4,000 dollars over previous Malibu models due to improved quality, styling and options.
Source:Xinhua/Agencies
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