New Chevrolet and Buick are expected to revive lost sales of GM

According to General Motors Co.’s top sales analyst, the company will be able to make up the sales it will lose when it sheds out half of its eight U.S. brands as part of its bankruptcy restructuring. Thus, the automaker is phasing out Pontiac, and selling Saab, Saturn and Hummer. Besides, Mike DiGiovanni, GM’s executive director of global market and industry analysis, said on Wednesday that the Chevrolet and Buick model lineups will be expanded to boost lost sales from Pontiac and Saturn, the biggest sellers of the scrapped brands. GM has also decided to focus on the Cadillac and GMC brands.

Despite losing four of its eight brands, the automaker, which controlled 20 % of the U.S. market in the first half of 2009, it plans to retain an 18 or 19 % share. According to Autodata Corp., GM sold about 143,000 Pontiacs, Hummers, Saabs and Saturns in the first half of the year, that is about 15 % of its total sales.

After a 40-day stay that wiped away much of its debt and other burdensome costs, the company emerged from bankruptcy protection. But it survived because of $50 billion in aid from the U.S. government. Retaining market share and boosting sales are the keys to making money and repaying the government.

John Murphy, Bank of America Merrill Lynch research analyst, wrote in a study of the U.S. industry released that GM will replace only 11 % of its models each year for the next four years, far below the industry average of 18 %. Murphy wrote newer models generally translate to better sales and market share. But DiGiovanni said GM, with fewer brands, will be able to roll out new models faster than it had in the past, and it will have more marketing dollars to spend promoting them.