Lutz Says Toyota Can Have the Sales, Production Crown

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North American Int’l Auto Show

DETROIT – General Motors Corp. Vice Chairman Bob Lutz proposes the auto maker might find itself in a more advantageous position should it relinquish its crown as the world’s largest auto maker to rival Toyota Motor Corp.

“Having personally worked for companies that are not No.1, I think there is a certain benefit to the internal culture in being No.2,” Lutz tells journalists at the North American International Auto Show here. “It focuses the mind; it energizes people.

“(The sales rivalry) sells newspapers, but operationally it makes no difference whatsoever to us,” he says.

GM has held the No.1 title for more than 75 years.

Toyota recently released its manufacturing goals for 2008, and analysts believe the Japanese auto maker will build more cars and trucks worldwide. It’s also widely assumed Toyota will overtake GM in global sales in 2008, even though GM outsells Toyota in the U.S. by a wide margin.

While admitting auto makers have a penchant for including titles in their marketing promotions, Lutz says those claims ring hallow with today’s consumers.

“Consumers judge the product and the deal,” says Lutz, a 44-year industry veteran who has worked for four of the world’s largest auto makers. “Obviously you want to deal with a reputable manufacturer, but I don’t think the No.1 claim means that much.”

GM Vice Chairman Bob Lutz wouldn’t mind giving up No.1 sales title.

In fact, such a claim can be dangerous for luxury brands, he says.

“Remember when Cadillac and Lincoln engaged in acts of mutual self-destruction by putting as many vehicle into daily rental as possible at the end of the year so they could claim (to be) the largest-selling American luxury brand?” he asks.

“If you’re selling something exclusive, why would you want to claim you are the highest-selling product?

Furthermore, the No.1 auto maker usually finds itself in the crosshairs whenever controversy arises.

“There is always hostility towards the big guy,” Lutz says. “Having experienced the sentiment for and against (the former) Chrysler (Corp.) and GM, I can tell you the intellectual hostility toward General Motors – the opinion of what our thought processes are and what our priorities are. I find it to be the most distorted and negative in the case of GM.”

“It’s like the old days at the county fair, when the guy would put his head through the rubber sheet and people would pay to throw mud pies at him,” he adds. “It’s time for someone else to put their head through the sheet. We’re perfectly willing to relinquish that spot for awhile.”

At the same time, there is a benefit to touting sales leadership in markets outside the U.S., Lutz says.

“We have to get people used to the fact GM is a global company and the U.S. is less than half of our business,” he says.

For example, GM recently boasted in press releases it is the first global auto maker to sell 1 million vehicles in China in a calendar year.

The campaign doesn’t target consumers – it matters more to the financial community, Lutz says – but it could have an affect on the products U.S. buyers see in the future.

In short, the auto maker will scrutinize whether it is more profitable to launch a particular vehicle program in the U.S. or allocate the money elsewhere.

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