GM Seeking Bigger Market Share

Despite sagging market share at home, General Motors Corp. and its automotive partners in Japan and Europe hope to garner more than a quarter of the global automotive market within a few years, President and Chief Executive G. Richard Wagoner said Tuesday.

In making market share a key topic at the start of a three-day seminar on GM’s future, Wagoner and other executives showed they are still smarting over the issue that has given the world’s No. 1 auto maker its biggest black eye in recent years.

GM, which once held 50% of the U.S. market, has seen that share tumble to 35% in 1990 and about 28% today.

“If you take the last 30 years, it’s really no fun to look at,” Wagoner said.

GM North America President Ronald L. Zarrella would not venture a prediction for when GM’s share of the U.S. market might recover, saying: “I don’t want to put a number out there and get beaten up every month for not reaching it.”

Globally, however, executives were upbeat. The “GM Network” that includes Isuzu, Suzuki, Subaru maker Fuji Heavy Industries, Saab and Fiat should reach 28% of the world market within a few years, Wagoner told journalists and financial analysts at the seminar in this city east of Milan.

The auto maker and its partners, in which GM owns equity stakes ranging from 10% to 100%, account for about 24% of the world auto market today; GM brands alone have 16%.

Wagoner, who took over as chief executive on June 1 from John F. Smith Jr., who remains chairman, says he wants to increase GM’s revenue 6% to 8% a year--”obviously a tough number in a company as big as we are.” GM earned $5.6 billion last year on revenue of $176.5 billion, for an overall net margin of 3.17%.

In North America, GM’s profit margin was about 4% last year, but it is unlikely this year to meet its so-called stretch goal of generating a 5% margin within two or three years, Zarrella said.

Among the drags on GM’s profit margin are outlays to build up businesses such as electronic commerce initiatives and OnStar--GM’s telephone-and-satellite link to cars for emergency calls, navigation and concierge services such as restaurant reservations. OnStar will begin appearing on non-GM cars for the first time this year.

Sluggish results from GM’s Saturn Corp. division have also held down margins. The slow-selling Saturn LS sedan has been a major disappointment to GM in its first year, moving at an annual rate of 100,000 units rather than the 190,000 originally anticipated.

“We need to get our margin up,” Zarrella told The Times. “Our margin will be better than in 1999 year-on-year.”

“They’re close to 5% in North America, but it all depends on industry volume,” said David Bradley, automotive analyst at J.P. Morgan Securities.

“My guess is that industry volume is going to go down, so everyone’s margins will go down. It’s not GM’s fault per se.”

Zarrella also announced what he vaguely described as a “Pontiac lifestyle vehicle” in conjunction with New United Motor Manufacturing Inc., the auto maker’s Northern California joint venture with Toyota Motor Corp.

GM shares fell $2.06 to $62.38 on the New York Stock Exchange.