“Painful Lessons” Lead To Auto Industry Discipline
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DETROIT — (WWJ) While a weakening Yen is starting to give Japanese carmakers a pricing advantage, GM North America President Mark Reuss doesn’t see them using that to start an incentive war.
“I think everybody learned a lot of painful lessons, and I don’t see any breaks from that yet,” he said. “The industry looks like everybody pretty much wants quality sales, not sales at any cost.”
Reuss said the industry has learned that too many price breaks can ruin the value of a product, hurting the entire brand, and hurting resale values.
Speaking to reporters on the sideline’s, after the company unveiled the GM Student Corps (read the full story here), Reuss talked about a lot of issues,
including GM’s improving stock price, new products and his lunch with Toyota North America CEO Jim Lentz, when both were college commencement speakers.
“First, we totally price fixed the whole industry,” said Reuss to the laughter of reporters. “That’s a joke.”
Federal laws strictly limit the boundaries of discussions between competitors. Reuss says the conversation was on general topics.
“We had a very similar view of what the industry was, the economy.“
It’s not unusual to have these private meetings, says Reuss. He says he’s teamed up with top executives at competitive companies on several charitable projects.
The discussion comes as auto stocks have been steadily riding, with GM’s stock finally topping the $33 dollar a share price that it launched at during the company’s Initial Public Offering in 2010.
“Those kind of signs are validation that, y’know, we’ve got to keep on strategy and keep what we’re doing and good things happen.“
Many analysts have been bullish on General Motors, as the company’s in the process of updating 70 percent of its new products.
“There’s nothing like product and launching with high quality product,” said Reuss. “That’s what we’re doing.“
The most important launch is General Motors new pickup trucks. Reuss says there have been no issues with the launch.
Pickups will go to Texas first, a state where pickup trucks are in strong demand. The new trucks are coming into dealerships as the older model is being sold down.
Reuss says GM will have a big advertising campaign for the new Chevy Silverado and GMC Sierra. But, they aren’t ready to talk about that, until there are enough new trucks in dealerships.
“We gotta fill the pipes,” he said. “We’re sorta shipping trucks now. We gotta fill the pipe a little bit. So, a few weeks here.”
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