GM’s Turnaround Rides on a Successful Chevy

With General Motors leaving bankruptcy, can its core brand churn out cars and crossover SUVs that stand up to Toyotas, Hondas, and Fords?

As General Motors emerges from bankruptcy reorganization to launch a new era, it is no exaggeration to say that as goes Chevrolet, so goes General Motors.

The Chevrolet brand has always been central to GM’s fortunes. It’s the division with the largest sales volume, after all. But at times, Chevy has suffered, along with GM’s other brands, from neglect, mismanagement, and the automotive equivalent of malnutrition—a shortage of competitive models, and models sitting without updates in showrooms well past their sell-by date.

To see the results, just look at some market-share numbers. Through the first half of this year, Chevrolet had a 12.3% slice of the U.S. auto market, according to Autodata. GM as a whole had a 19.7% share. GM has agreements in place to sell Saab, Hummer, and Saturn, and it is closing Pontiac. The brands that will remain with the new GM, besides Chevy, are Buick, GMC, and Cadillac. Together, those three accounted for just 4.4% market share.
Suffering from Brand Dilution

Today, Chevrolet markets six passenger cars, eight sport-utility vehicles and vans, and three pickup trucks. That’s 17 distinct product lines, adding up to a little more than 12% market share. Toyota (TM), not including Scion and Lexus, has 17 models, and 14.1% share. That doesn’t speak well of Chevy’s efficiency. And yet, so low are the expectations for GM that many people might think the gap between Chevy and Toyota was even larger.

“If GM had not diluted and shortchanged Chevy over the years to prop up brands like Saturn, Saab, and Hummer, it would be a more powerful brand right now,” says Earl Hesterberg, CEO of Group 1 Automotive (GPI) and former top marketing executive at Ford Motor (F), Chevy’s nemesis. Group 1, a large automotive retailer, has five Chevy dealerships.

source: businessweek