GM picks up the pace

General Motors Visitors to this week's Detroit auto show could be forgiven for thinking they had stumbled into a Mary Barra-welcome parade. Barra, a 52-year-old General Motors (GM) lifer who takes over on 15 January as the company's chief executive officer, unveiled the GMC Canyon truck at the pre-show festivities and was engulfed by dozens of shoving and craning reporters. She was swarmed again when the North American Car and Truck of the Year awards went to a pair of Chevrolets released on Barra's watch as product-development chief.

The first female CEO of a global automaker, Barra will take the helm of GM in its best fighting position in a generation. Her challenge will be to expand GM as rivals counter with similarly competitive line-ups and industry growth is projected to slow. "The expectations are high for her," Michelle Krebs, an independent analyst, says.

The show also provided proof of the challenges GM will face. Ford Motor unveiled its aluminum-sided F-Series pickup, with improved fuel economy to challenge the award-winning Silverado. While the Chevrolet Corvette added a more muscular brother with the ZO6, it faces new challenges from a redesigned Ford Mustang and Porsche 911 Targa. There is also pressure on GM's Cadillac brand from a redesigned Mercedes C-Class and new BMWs.

The Detroit Three, after slashing costs and turning out some of their best vehicles, came within about one-20th of a percentage point last year of posting US market share gains in the same year for the first time since 1988.

While Ford has effectively slimmed down globally, GM has further to go in cutting costs, says Xavier Mosquet, co-leader of the Boston Consulting Group's automotive practice and senior partner.

"This is the first generation of trying to leverage GM globally to be a more efficient company," says Mosquet. "If it continues, it will be one of the world leaders in five years."

Optimism for GM has been building, with shares rising 42 per cent last year, as the US Treasury sold its remaining ownership stake and as new products began arriving in showrooms. Working to transform a line-up that was one of the industry's oldest, GM brought out 18 new or refreshed products last year and plans 14 more this year. As product chief, Barra oversaw the final stages of those vehicles.

"GM has a very competitive line-up," says Dave Sullivan, an analyst with AutoPacific. "They were at rock bottom. They've now recovered. They have a very fresh line-up. Now they need to go to the next step - they've got to come up to the 'Wow' level."

As for her future plans, Barra says, "Our focus is still: Design, build and sell the world's best vehicles, continue to build strong brands." GM has been helped by a US auto industry that saw its best sales year since 2007, with industry-wide deliveries increasing 7.6 per cent to 15.6 million.

But growth may level off in 2014, according to analysts. "We're liable to see more incentivising and discounting," says Jack Nerad, a Kelley Blue Book analyst. There will be "big-time pressures on all of the CEOs, not just Mary."

GM also faces threat from Volkswagen, which seeks to become the best-selling automaker in the world by 2018. It unseated GM in China last year as the top-selling foreign automaker, a position GM had held for eight years. GM executives acknowledge the pressure is building to deliver. Market-share increases aren't instantaneous, says Mark Reuss, who replaces Barra as head of product development.

"We've got a lot of baggage. We haven't been producing fundamental excellence in our products for two-three cycles yet - we're into one. Don't underestimate what people thought of us or these brands through these hardships," he says and adds "my message to my team is...put our focus right into launching, launching, launching".