DETROIT – General Motors Corp.’s U.S. market share will hold steady for 2007, Vice Chairman Bob Lutz says.

“I think our share in North America is going to be very similar to our share in 2006, but the balance of retail to fleet will improve," he says here at the North American International Auto Show.

"I’m very hopeful if the market remains as it is today, we can further reduce incentives.”

GM’s U.S. market share stands at 23.5% through December, down from 26.0% in 2005, Ward's data shows.

“The share is going to be what the share is going to be,” Lutz says. "We’re not going to lean on the market like we used to, where we would force share by performing unnatural acts like too much daily rental; too much lease; too many employee sales. All these things detract from the long-term health of the company.”

Lutz chides the media for focusing too much on the top line sales numbers instead of delving deeper into GM’s reduction of rental fleets vs. higher-profit retail sales. GM cut U.S. rental fleet sales by 75,000 units last year and will cut another 100,000 units in 2007, he says.

GM's 2006 car sales dropped 7.0% to 1,621,573, while light-truck sales fell 8.7% to 2,446,026, Ward's data shows. Overall, the auto maker's domestic sales in 2006 were down 8.7% from 2005.

“The good news is General Motors in 2006 was the only manufacturer, foreign or domestic, to improve 3-year residual values,” Lutz says. “The bad news is we’re still not competitive with Honda (Motor Co. Ltd.) and Toyota (Motor Corp.) And we must become competitive with (them).

“If, for awhile, we have to sacrifice sales to get our house in order, that’s exactly what we’re going to do.”

scanderson@wardsauto.com