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Enclave Is A Hit, So GM Cuts Production

The tight supply of Enclaves--a so-called crossover utility vehicle that has become a breakout hit for General Motors this year--is no accident. GM is keeping a tight rein on production in an effort to avoid past mistakes that forced it to offer discounts and cheapened the image of the company's brands.

In the past, when GM had hot models, it usually built as many as it could, and almost always ended up with lots filled with unsold vehicles. "Nothing destroys the value of a new product faster than over producing," says GM Vice Chairman Robert Lutz.

For example, the Chevy HHR, a retro-styled wagon launched in 2005, sold briskly at first, often at full sticker price. But 15 months after the HHR was introduced, Chevy dealers had enough in stock to last almost five months. Since then, GM has had to continue discounting and dump thousands of HHRs into rental fleets, which eroded the margin on the car, and badly watered down its cachet.



Read the whole story at The Wall Street Journal »

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