DANBURY, CT – FutureCorp. product planning is being pegged to gasoline priced at current levels, says Mark LaNeve, vice president sales, service and marketing.
“There’s no upside to planning on $2 gasoline,” he says. “We think it’s prudent to plan on $4 per gallon gasoline.”
Speaking to journalists at a press conference here to show off the latest look in Saturn Corp.’s revitalized dealer facilities, LaNeve says July sales totals will parallel June’s dismal showing, leading to a market in the mid- to upper-14 million range.
However, the GM marketing chief predicts the fullsize truck market will recover as the housing market and general economy improves. Big pickups won’t get back to their peak sales of 2.5 million units, he says, rather the segment should stabilize at 1.6 million units annually.
LaNeve is less sanguine about the fullsize SUV market, which reached peak sales of 800,000 units annually before the current spike in fuel prices. He forecasts annual deliveries will not rise above the 300,000-unit mark again.
GM wants to satisfy the growing demand for fuel-efficient vehicles, LaNeve says. “We’re looking at hybrid applications across every model line.”
The auto maker also is pondering 4-cyl. mills for vehicles it had not considered before. “There will be a narrowing of the gap between 4- and 6-cyl. engines.”
But that doesn’t mean a growing number of stripped-down small cars. For instance, the next-generation Cobalt will be a larger, more premium vehicle.
“Customers are willing to pay for fuel economy,” LaNeve says.
That also holds true for hybrids. Indeed, he says hybrid buyers want a payback in fuel savings to happen in five to six years.
LaNeve also seeks to allay dealers’ fears that GM may emulateLLC’s move to eliminate leasing programs completely.
He says the auto maker will protect dealers who rely on leasing as an important sales tool. However, GM may offer other types of incentives as appealing as leases.
GM dealers only leased 15% of their volume in June, he says, while AmericanMotor Co. Inc., which usually trails GM in leasing, was 1% ahead in the month.
“Our leasing could drop to as low as 12% in July,” LaNeve cautions.
GM will become more “aggressive” with cash incentive programs if it decides to eliminate captive leasing, he promises. The incentives will ensure monthly payments remain approximately the same for most car buyers.
But GM will not offer a $2.99 per-gallon gasoline incentive ashas been doing, LaNeve says, also dismissing Motor Co.’s employee-discount price on pickups. “That hasn’t worked.”
However, he does admitNorth America Inc. is having some luck moving its Titan fullsize pickup with incentives that range up to $10,000 per vehicle.
Meanwhile, GM is determined to stay with at least seven brands. “We’re shopping Hummer around because we feel that we don’t need more than three truck brands for strategic reasons,” LaNeve says.
“There’s a lot of downside to eliminating brands. You would eliminate them for long-term strategic reasons, not out of short-term necessity.”
Saturn, which long has been rumored to be a brand GM might eliminate, fits into the auto maker’s long-term future, he insists, while cautioning: “We have to improve the profitability of Saturn. It’s been doing better, but I can’t say if it will be profitable (this year).”
GM’s plan for Saturn is to reflect the European Opel lineup, which is designed to compete withAG’s product portfolio.
“We compete with the Japanese, of course, but Saturn will gradually see its prices move up,” LaNeve says. “Chevrolet will cover the low-priced market for GM.”