GM's Lovejoy: October Sales Should Be Up Over September

DETROIT -October 21,2002 Dow Jones repoted tht after leading the way to an improved relationship with dealerships nationwide, General Motors Corp.'s Bill Lovejoy is stepping down while things are rosy.

"It feels good to leave when things are good; you're not leaving a sinking ship," Lovejoy said during a Monday conference call to discuss his Jan. 1 retirement. "And I have very good leadership behind me."

Lovejoy replaced Roy Roberts as GM's vice president of sales and marketing in 1999 after a plan to acquire as many as 800 dealerships was loudly protested by dealers and the National Automobile Dealers Association.

Back then, Lovejoy said GM ranked at the "very bottom" of a survey by the dealers association that appraises dealers' satisfaction with automakers. Today, the company has surpassed the industry average and aims to be ranked in the top quartile soon.

"My priority on Jan. 1 is not going to be any different than Bill's," said John F. Smith, 51, who GM pegged to take over the position after serving as the company's vice president of field sales, service and parts since February.

Lovejoy said he expects GM, and other automakers, will continue heavy incentives in an attempt to keep consumers coming into the showroom.

"Incentives will be in place for quite some time, until demand is more aligned with capacity, because everybody is fighting to keep up their production," he said.

Incentives are an expensive way to attract customers. GM's most recent program gives customers zero-percent financing, no downpayment and no payments for 90 days.

"I don't think anybody likes where we're at," Smith said. "Everyone is applying their respective creativity to come up with equally attractive, but less costly, options."

The introduction of new products should help the company become less reliant on incentives, Smith said. The company launched 12 new automobiles for 2003 and will introduce about the same number in 2004.

Still, the economy plays a big factor on the bottom line, and Lovejoy said he thinks the stock market's woes are beginning to take their toll on consumer confidence. Combine that with news of the sniper in and around Washington, D.C., and the talk of going to war with Iraq, and "it wouldn't surprise any of us if we're taking a breather," Lovejoy said.

Still, he expects October's sales figures to be higher than September. But year over year, sales are expected to be down, given the "Keep America Rolling" incentive campaign that ran last year.