UPDATE 1-GM would rather be strong No. 2 than weaker No. 1


(Adds details on sales discussion, background, byline)

By David Bailey

DETROIT, Jan 23 (Reuters) - General Motors Corp vice chairman and product chief Bob Lutz said on Wednesday he would rather see a strong GM even if it were No. 2 in worldwide sales than a less profitable No. 1 automaker.

"I would rather be a highly profitable, great shareholder value, great reputation, growing No. 2 than a struggling No. 1," Lutz told reporters after a speech at the Automotive News World Congress.

GM released final 2007 global sales figures on Wednesday of 9.37 million vehicles. Toyota Motor Corp's preliminary figures came in about the same, with a source disclosing to Reuters a Toyota figure that left GM as the world's largest automaker.

Lutz said he does not think about the sales rankings and would give that same answer whether GM was first, second or tied for first and instead would focus on the bottom line.

"All other things being equal, would you like to be the worlds' largest automaker, well of course, who wouldn't," Lutz said during his presentation. "Will we continue to fight tooth-and-nail for every possible sale this year and beyond in the hopes of doing so, absolutely."

Lutz told reporters some customers of the recently introduced 2008 Chevrolet Malibu in the United States were former buyers of European and Japanese automobiles. He also said being second could sharpen employees' focus.

"I would almost say that being No. 2 for a while if it happens, and it well may because they are in a lot of areas that are growing faster than we are, it may be a powerful motivator for GM employees," Lutz said.

Lutz also said the U.S. market and GM are doing better than they were five years ago and that it may be possible for GM to compete with India's Tata Motors Ltd's planned $2,500 Nano car through vehicles it builds now in a venture in China.

The Wuling venture does not build passenger cars, but does produce minivans and pickups roughly in the same price range as the Tata vehicle, Lutz said.

"Everyone is behaving like this had never been done before, and in China there are several producers like Wuling that sell cars at $2,500 all day long," Lutz said. (Reporting by David Bailey; Editing by Gary Hill and Ben Tan)



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