What’s driving GM car demand?
TEXT OF STORY
Bob Moon: It’s been less than a year since GM emerged from bankruptcy. But it seems Chapter 11 agreed with the carmaker. Demand for its cars is now so high, the company’s skipping the annual summer shutdown at most of its U.S. assembly plants. Not only that, GM says it has the cash to finance an Opel revamp. And domestic cars are doing better than their imported rivals on the JD Power quality rankings. It’s the first time that’s happened in the survey’s 24-year history.
We asked Marketplace’s Alisa Roth to find out what’s Detroit putting in its breakfast cereal?
Alisa Roth: GM has to keep its plants running all summer because people finally want to buy its cars. That demand — along with its lean new post-bankruptcy operations — is helping the company make more money. Which is why it doesn’t need to borrow money to revamp its European division, Opel.
Michael Robinet is an analyst at IHS Automotive. He says GM’s finally achieving what used to seem like an impossible goal.
Michael Robinet: The moons are aligning at General Motors with respect to the fact that the product is much better and really being looked at by the consumer in a very positive light.
One of the things GM did to restructure itself was to get rid of a lot of brands. So now there are only four: Buick, Cadillac, Chevrolet and GMC.
Steve Whitten is in charge of U.S. auto research at JD Power. Its quality survey measures how reliable vehicles are right off the line. Whitten says not all GM cars did brilliantly in the study. But it’s clear that these days, the company’s paying more attention to the details.
Steve Whitten: Down at the plant level, that’s where quality starts. They’re really able to focus on their most important brands and their most important models. And we’re starting to see the effect of that in this study.
Domestic carmakers did better than the foreign transplants this year, partly because Toyota did so badly. But Whitten says he thinks the quality of American vehicles will keep getting better.
I’m Alisa Roth for Marketplace.
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