Sadly, for the past 60 years, GM seems to have excelled in relatively roomy but supersized, cheap, glitzy, indifferently-assembled vehicles. GM’s attempts at small vehicles seem remarkably uninspiring (i.e. Vega, Citation, Saturn, EV-1, Geo, Cobalt, Chevette, Cimarron, Vauxhall (in Europe)).

Example if I were Toyota I would want to sell more Sequoia’s than Prius’s because of the profit margins (setting aside premium packages/trim and major differences in vehicle usages). What if Toyota skipped out on a Yaris & only sold vehicles starting with the Corolla or Matrix becasue of too small of a profit margin coming from these entry level vehicles? In theroy, if someone buys a Corolla and likes it, the next time they buy a vehicle they may upgrade to a Camry or Camry to a Lexus. You need starter vehicles or cars that consumers can move from to an “upgrade” if you want to potentially grow profit margins but as I said above this is difficult now with younger generations of consumers. Also, when the last gas spike happened, Chrysler got rid of their starter car Dodge Neon. They left themselves exposed as consumers shifted to more fuel efficient vehicles but they did not have this option for consumers.

Where I think you are right is in the case of GM selling crappy low quality entry-level vehicles at no profit (many cases these cars had parts flying of of them within just a few years), while focusing on trucks and SUVs at lower volumes but higher profits margins. Until recently, GM focused too much into their truck and SUV divisions and I argue that GM forgot to build a full product line of quality vehicles that competed against new comers like Hyundai or the more established Toyota Motor Co.

The domestic GM of old hired marketing “genius” Clotaire Rapaille to decipher the psychological code of SUVs in order to appeal to the consumer’s primitive/irrational subconscious. And it was based on Rapaille’s advice that SUVs became bigger and bigger–because Rapaille found that people associated SUVs with safety (despite the fatalities caused by roll-overs) and they associated safety with size. So based on marketing rather than engineering and safety research, GM put bigger and heavier cars on the road that would result in much more violent accidents.

Not that Ford was any better, but any company that requires federal legislation to force them to install seat-belts and stop selling death traps should not be reminisced upon fondly as some golden era of the American auto industry.

Usually declines in auto market share takes years if not decades to happen. Example, my dad buys only GM or Ford products (generational difference and nostalgia I guess…) and there are many like him that will continue to do so. Where GM is in trouble is with younger car buyers who don’t have an elegance to one brand (ie Buick) or “domestic” over “foreign” car companies. Over time car manufactures like Hyundai and Nissan (in the southeast U.S.) continue to gain market share were others like GM & Chrysler continue to decline (domestically).

It is not all gloom and doom for GM. As said before by many others, the Chevy Cruze will be an important part of GM’s recovery. Also lets not forget about the underrated Chevy Malibu or for Fiat/Chrysler the strongly competitive 2011 Jeep lineup. For GM, they must fill in the gaps and make their line-up more diverse and have appeal or potential appeal to a mass market. This means carefully looking at their two-mode system. If the premium for the mild hybrid system is too high for the selling point of better fuel mileage or there is little promise for future improvements and reductions in cost, skip it. Also find ways to reduce kinks in the production of the Volt and stop trying to put marketing and politicking before the actual product. Also sell good PR to turn around the bad public image among some of the newer generations of consumers.

If I were to buy shares in the “new” GM I would only do so for their market gains oversees ie China. GM will never be the domestic GM of old but one hopes they can innovate and be a leader again domestically. No one knows what the real culture at GM’s Detroit Headquarters is but one gets the feeling that there are mixed signals of new and old. If GM reverts back to its old default ways, I doubt many republicans or democrats will be willing to bail them out again & that should give GM enough encouragement (once they buy out the rest of the governments share) to not repeat the same mistakes of old.