GM will stick with pricing plan despite continuing sales drop | VailDaily.com
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GM will stick with pricing plan despite continuing sales drop

DETROIT – General Motors Corp. expects its U.S. market share to continue to fall in the first quarter of this year due to aggressive competition, but said that won’t reverse its strategy of lowering prices and relying less heavily on discounts, GM marketing officials said Monday.”We’re certainly not pleased with current share levels and we’re not satisfied with it, but we have to run this play,” said Paul Ballew, GM’s executive director of market and industry analysis, in a teleconference with analysts.Ballew said GM’s U.S. market share – which is critical to the company’s North American turnaround – will be around 24 percent in March, down from 27 percent the year before. Ballew said GM’s first-quarter U.S. market share will fall by one percentage point, or around 250,000 vehicles.GM, which lost $10.6 billion in 2005, has been struggling with declining sales at the same time its labor and health care costs are rising. The automaker last week offered buyouts to 113,000 workers and is expected to make further cuts to its salaried ranks this week.But GM on Monday said it’s seeing progress in lowering sales to rental fleets and making more money per vehicle. GM expects a 3 to 4 percent increase in its average transaction price in the first quarter, compared to an industry-wide increase of 1 to 2 percent. That’s because GM’s product lineup is more heavily tilted to trucks and sport utility vehicles, which give automakers a higher return than smaller cars.GM shares rose 53 cents, or 2.3 percent, to $23.18 in afternoon trading on the New York Stock Exchange.—On the Net:General Motors Corp.: http://www.gm.com


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