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GM fails to deliver on promise to spur sales in hip U.S. markets
POSTED: 3:04 p.m. EDT, April 6,2007

General Motors Corp promised dealers two years ago it would do whatever it took to reverse falling sales in the American cities that set the industry's trends, but the slump has only worsened.

Toyota Motor Corp outsells GM two-to-one in Los Angeles and by a slightly smaller margin in Miami, according to data compiled by R.L. Polk & Co. In the New York City metropolitan area, where GM had a 4.5 percentage point lead in market share five years ago, Toyota has surged to a four-point advantage.

"In some of these markets, our share has fallen off rather dramatically," Mark LaNeve, GM's head of North American sales and marketing said in an interview. "You can almost re-enter the market like you would enter a new country."

Gaining market share in big cities is important to car companies because, like many other consumer trends, car-buying habits are set there. Without significant presence in places like New York, GM can't gain the brand awareness to attract affluent buyers and return to profitability.

"If GM wants to be viewed as a cool brand, they've got to pay more attention to some of these markets where there are cool, urban people," said Russell Winer, a marketing professor at New York University's Stern School of Business. "People in Des Moines want to drive what's hot in LA," he said.

The company will unveil prototypes of new, small cars at the New York auto show on Friday, Bloomberg News reported.

The subcompacts, which can travel 64.4 kilometers on 4.54 liters of gasoline, will be 33 centimeters shorter than the 3.75-meter Chevrolet Aveo, the smallest GM model.

In 2005 meetings with dealers, GM Chief Executive Officer Rick Wagoner made regaining market share in Miami, Los Angeles and other large cities a priority. He promised more advertising and other resources to boost sales.

Toyota sales have risen 36 percent in New York, Los Angeles and Miami since 2002 while GM's dipped about 20 percent in those three markets combined.

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