GM's Global Design

DETROIT (Reuters) -- General Motors said it expects new products to account for nearly 40 percent of showroom sales in 2007 as it rolls out vehicles designed under a new system to cut costs and revive brands.GM executives, meeting with reporters and analysts Thursday evening, also said a key push for the automaker in 2007 would be to take steps to drive gains in the residual value of its vehicles -- a key consideration for new car buyers and lease underwriters.The steps outlined by senior GM executives are part of the automaker's strategy of moving beyond the cost cutting that has characterized its turnaround effort this year to show that it can grow revenue without resorting to costly sales incentives.GM's overall U.S. sales were down 8 percent in the year to November and the company is banking on the success of new cars and car-based "crossover" vehicles -- including models for its Saturn, Buick and Cadillac brands -- to grow revenue.GM Chief Executive Rick Wagoner said GM had increased its capital spending by $1.5 billion over the last two years and would continue to invest more to drive sales gains."Next year will be a very important year for us on the revenue side," Wagoner said, adding GM expected its sales from launch models to rise from 20 percent of U.S. sales this year to nearly 40 percent next year.ONE 'LEGO SET', MANY VEHICLESGM's product development chief Bob Lutz said GM intended to stake out a reputation for exciting design even as it drives down costs by building more vehicles on common platforms -- an area where rivals such as Toyota Motor Corp. are seen as having a large lead.Lutz said future versions of GM's current-generation of small cars -- the Astra built by its Opel-subsidiary and the Aveo built by Korean affiliate Daewoo -- would share a single platform. "They will all come from the same Lego set," he said.Lutz also said GM had earmarked elements of its global development to teams in different countries seen as having particular expertise.For example, future mid-market sedans would be developed by a team based in Germany, he said. Development work for small SUVs and light pickup trucks would be done mainly in Brazil, leaving engineers in the United States to focus on full-size pickups and SUVs, he said.GM's board rejected a proposed alliance with Renault and Nissan Motor Co. two months ago, and Lutz said GM's progress in integrating its own operations showed that was the right choice."We said we didn't need an alliance to achieve this," Lutz said. "And this is why -- we are achieving an international alliance within GM."Separately, GM sales chief Mark LaNeve said GM had increased its net pricing in every segment of the U.S. auto market this year except mid-sized sport-utility vehicles, a category still reeling from higher gas prices.GM has also improved the residual value of its vehicles -- a measure of the percentage of the original sales price remaining on trade-in -- by 8 percentage points over the last year and a half, he said.Some of that gain came after GM rolled out a five-year, 100,000 powertrain warranty in September for its entire 2007 model line-up, executives have said.Driving further gains in residual values will be a priority in 2007 for GM, LaNeve said, without specifying what further steps the automaker might take."There's a big effort underway in that area," he said.

Reading this article gives me hope about the world’s largest auto company, GM seems to be positioning itself for the long run, as I’ve said before, perception of quality is half the battle, and it’s a battle that the domestic auto companies have to win.