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GM aims to regain No. 1 sales spot, capture more than 16 per cent of Cdn market

TORONTO - The new president of General Motors Canada says he believes the automaker can reclaim the No. 1 sales position in the country this year.

TORONTO - The new president of General Motors Canada says he believes the automaker can reclaim the No. 1 sales position in the country this year.

GM's goal is to sell "north of 16 per cent" of the vehicles bought in Canada this year, Kevin Williams told reporters Wednesday in his first meeting with the media since he took over the reins of GM Canada earlier this year.

By the end of May, GM had captured 15.4 per cent of the Canadian market, putting it in second place, while Ford took the top spot with 16 per cent, according to data from DesRosiers Automotive Consultants. That is a far cry from the heady days of the last decade, when GM routinely captured more than a quarter of the Canadian market and was always in the top spot.

"I've challenged our team to end this year at the No. 1 position in the marketplace, and while Q1 didn't put us as the market leader, we are demonstrating in Q2 that, with our core brands, we're gaining momentum," Williams said.

However, he said GM wouldn't resort to its old strategies of increasing sales to fleets like car rental companies or offering profit-withering incentives simply to boost sales. And if this means being "the most profitable No. 2," Williams said he wouldn't be upset.

"Can we be at 17, 18 per cent (of the market)? Absolutely, but the kinds of things you have to do to get that done are not the kinds of things we're willing to do in the new General Motors," Williams said.

"We don't want to play the incentive game and the new GM isn't going to play it like we played it in the past," he added.

GM Canada's U.S.-based parent company underwent a massive restructuring under bankruptcy protection last year and eliminated several of its brands to focus on Chevrolet, Cadillac, Buick and GMC.

All automakers took a hit from the global recession, but GM and its competitor Chrysler were particularly hard hit. Although there were many factors that led to their troubles, an industry habit of intense competition on consumer incentives has been blamed for hurting GM's bottom line.

Industry watchers are concerned that this is happening again, as embattled Japanese automaker Toyota has been offering big incentives to draw wary customers back into its showrooms after massive recalls earlier this year, forcing other big automakers like GM to compete.

However, Williams said he thinks the current levels of incentives in the marketplace are unsustainable, and will likely taper off throughout the year.

He added that GM isn't going to sell more vehicles to fleets simply to boost its sales numbers anymore.

"At the old General Motors, in some cases we relied on a push towards market share and we used fleet to get that done, and while our fleet business is an important aspect of our business, we're no longer that company that's willing to just throw products at fleet just to meet capacity," he said.

Fleet sales are currently "significantly less than half" of what GM sold in the past, he added.

GM's sales have been significantly lower in recent months as it adapts to having fewer brands. In May, the automaker's Canadian sales were down 17.6 per cent compared to a year earlier.

However, Williams said the company is aiming to win back more than 70 per cent of the customers who currently own vehicles that are part of so-called "retired brands," like Pontiac, over the next three to four years.

Part of the company's strategy to do this lies in its new plug-in hybrid Chevrolet Volt, which will be launched in the Canadian marketplace in the second quarter of 2011. Williams said the technology used in the Volt — which allows it to run on an electric charge over distances of up to about 65 kilometres, but switches to gasoline for longer-haul trips — will expand across GM's entire portfolio over time, and the company is also "contemplating" an all-electric battery vehicle.

Williams, born in Maryland, took over the helm of GM Canada in March, replacing Arturo Elias after a four-year stint at the helm. He was formerly vice-president for the service and parts operations at GM's parent company and president of GM Mexico before that.

GM's Canadian operations, all based in southern Ontario, used to employ tens of thousands of workers before a string of cuts over the last decade or so pared the workforce significantly. The automaker shut down its truck plant in Oshawa last year, shedding about 2,600 jobs, and will close its transmission plant in Windsor in July, putting about 1,000 more people out of work.

However, the stream of bad news has reversed in recent months. In March, GM Canada said it would add a third shift at its Oshawa assembly plant and increase production at its plant in Ingersoll, recalling more than 700 laid-off workers to meet hot demand for its Chevrolet Equinox and GMC Terrain crossovers.

Late last year, GM also recalled more than 600 workers in Ingersoll and said it would add a second shift in Oshawa in 2011 to support production of the new Buick Regal sedan and Camaro convertible, bringing back another 700 workers.

Two separate investments in GM's parts plant in St. Catharines will also serve to secure another 800 jobs at the company.

In total, GM Canada employs about 9,000 people. Williams said almost all the workers who are still on layoff will be back to work by the end of this year.

 
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