Q: Will this be a lousy year for the auto industry?
A: It will be tough, but we are seeing just what we predicted. We feel it is going to be a year that runs a little behind last year. Last year, the industry sold 16.3 million vehicles in the U.S.; in the first two months of the year it was tracking 15.6 million, almost exactly what we thought. We said it would run below 16 [million] in the first half, and above it in the second. With the Bear Stearns thing, we don't feel as confident as we did--but I still think it's going to be roughly below trend but not a huge fall-off. it's still a pretty decent market.
Q: You are showing Pontiac vehicles at the show. GM's strategy is to sell Pontiac in dealerships that also sell Buick and GMC. How is that channel strategy faring?
A:We currently have 80% of volume of those brands sold through "on channel" dealers--selling all three brands. We have done over 600 dealer projects in the last couple of years--be they buy, sell, or consolidation. We have about 100 projects left of significant size to do, so I would characterize it as three-quarters done.
Q: What are the market benefits of putting those brands together?
A:The synergy is, you have GMC covering trucks and crossovers, Buick in near premium, and Pontiac as affordable performance: three different price positions in the market, 20 models between the three brands covering 80% of market coverage. It compares very favorably with Nissan and better than Honda and about the same as Chrysler, Jeep and Dodge stores.
Q: With Saturn now becoming a full-line brand (rather than the limited-vehicle brand it used to be) is it redundant vis à vis Chevrolet?
A:Chevrolet will have a strong, expressive American value aspect to it. Increasingly, Saturn will be "Euro sophistication." Saturn will compete with Volkswagen. That will become real evident. It will be, volume-wise, in the 250,000 to 300,000 unit range, premium to Chevrolet.
No--that wasn't Saturn's historic position, which was below Chevy, so we will have to move Saturn up. People say "Do you need both Chevy and Saturn, and I say, "Does the market need VW?" Well, if one of them goes away, it should be VW, not Saturn. We are going to compete head-on with them.