General Motors introduced its latest sales incentive/ad campaign yesterday -- a 60-day money-back guarantee with a "May the Best Car Win" attitude.
If you saw the new commercial about this program (in heavy rotation during the NFL season kick-off on Sunday) you saw (and heard) a plain-talking GM Chairman, Ed Whitacre, talking about how "Before I started this job, I admit, I had some doubts." But Mr. Whitacre likes what he found at GM, and he thinks "Car for car, when compared to the competition, we win."
There are two key elements to this latest ad campaign:
1. Are GM's cars really as good or better than the competition?
2. Can GM convince a substantial amount of potential customers its cars are as good or better than the competition?
The first point (Is GM's current product offering as good as the competition?) can and will continue to be argued by automotive journalists (and automotive enthusiasts) as it has been for past 100 years. This ad campaign and Mr. Whitacre's claims won't change that. I would argue that a portion of GM's product is on par with the competition (Corvette, CTS, full-size trucks, large crossovers, LaCrosse), but plenty of work remains (Aveo, Cobalt, Canyon, Colorado, DTS, HHR, Impala, Lucerne, STS).
Some might argue I'm picking on the older models, and that all of GM's newer vehicles are clearly superior to the competition.
First, I wouldn't say the newer models are "clearly superior" I'd say, again, "on par" -- meaning they are worth consideration, but not clearly the only choice in those segments. By contrast, the Honda Odyssey is clearly the best minivan in the segment, and GM doesn't have any models that are as clearly superior in their given segment as the Honda Odyssey is in the minivan segment.
Second, Mr. Whitacre didn't say, "Car for car, when compared to the competition and only looking at our newer models, we win." He's not making a distinction within the GM line-up, so I (and you) can't either. If we're looking at all of GM's cars against all of the competition, GM most certainly does not "win." And don't forget that while Hummer, Pontiac and Saturn aren't part of the official "new" GM those models are still out there, sitting on dealer lots with GM badges still on them.
But everything I've said up to now only relates to how good GM's product actually is (or isn't). The real purpose of this campaign is convincing buyers to give the product another chance. You'll note that Mr. Whitacre, after admitting to his own doubts about GM's product, throws in, "...probably a lot like you."
GM knows how far the company's image has sunk, and the"May the Best Car Win" campaign is directly targeting this lack of buyer confidence. Will it work? That's a tough question to answer.
This approach was used 30 years ago by a recovering Chrysler. The sound and feel (and even the look) of Mr. Whitacre's stroll past GM's product in the above commercial so smacks of a long-ago Lee Iacocca I wonder if there's a copyright infringement case to be made.
Regardless of the inspiration, there's a major difference between the Chysler of 1979 and the GM of 2009. When Chrysler was attempting its revival 30 years ago the concept of a domestic automaker requiring a "full turnaround" was still somewhat novel. Sure, every major automaker struggles with ups and downs, and sometimes they never come back from the brink. But when Chrysler embarked on this process it was really the first time a major automaker was trying to come back from such an obvious, well-publicized brush with death after producing terrible product.
Fast-forward 30 years, and it seems the "now we're really serious" language gets revived every 3-5 years. I feel like GM has been in "turnaround mode" since before I graduated college (17 years ago). And I don't think anyone would argue they've been in retrenching mode for at least a decade.
A decade is a long time to keep hearing, "Just you wait until our next models arrive." At some point it becomes background noise.
Up next: WOLF!
By slickersdrip
on September 15, 2009
07:20 AM
With this plan I worry far too much about the yahoo going out and buying a Camaro SS and paying whatever return policy price (I'm certain that GM secured that this won't just be a perpetual free rental service) to have fun with the car for a few weeks and then stick it to some person buying it as either a demo model or a lightly used model on the dealership lot.
This policy does nothing for me, as in less than a year when I'm looking to replace my SRT-4, there isn't anything competitive to that coming out of GM... even without the power there still isn't a good small car they produce... especially now that the Cobalt SS sedan isn't even available.
By wobbly_ears
on September 15, 2009
07:40 AM
No, this won't convince me to buy a GM product. What WOULD convince me, however, is if GM would have the 5yr/60k bumper-to-bumper & 10yr/100k powertrain warranty like Hyundai/Kia.
See what that long warranty has done for both brands.
These gimmicks won't work. People need assurance that GM stands behind its reliability claim. People have been burnt by the domestics for too long.
By 7driver
on September 15, 2009
08:06 AM
I would disagree about #1, but #2 makes up the difference.
GM cars only need to be on par with the competition to be successful. This is because the vast majority of the car buying public are unable to judge which car is better. How else can you explain the popularity of the Toyota Corolla? So given two items that the consumer doesn't have the skills to judge which is better they decide based on which has the better marketing schtick, hence #2. After the marketing thing has played itself out, they fall back on mob mentality (i.e. buy what everyone else buying).
In an ideal world uninformed consumers would inform themselves by listening to automotive journalists but things don't quite work out that way for various reasons.
By 1487
on September 15, 2009
09:25 AM
"A decade is a long time to keep hearing, "Just you wait until our next models arrive." At some point it becomes background noise."
First of all GM hasn't been doing ads like this for the last decade. Do you really think the average consumer pays attention to GM's reorganization efforts when buying a car? Stop thinking like an editor and think like a customer. The average customer doesn't know or care about whatever reform efforts have been underway since you were 17. Until last fall most didn't know GM was in some sort of trouble and whatever changes were being made were unknown to the masses.
1. Saturn, Hummer and POntiac aren't mentioned in the commercial so I fail to see how those vehicles could damage Gm's prospects of winning when compared.
2. The older vehicles have good incentives and for the average user are as good as the competition. What does a camry do for the average consumer that the Impala does not? Nothing. Same goes for Cobalt and the best selling Corolla. Average consumers don't rate cars on plastics or steering feel like auto writers, they could care less about such things. at the right price, Gm's older models are definitely acceptable to the non enthusiast.
3. Hyundai's warranty is not better than GM's. Why? Several major items are NOT covered for 5 years and the 10 year powertrain warranty cannot be transferred and is contigent on you following Hyundai's maitenance schedule. In addition, the roadside assistance is only for 5 years, just like GM's plan. Hyundai has had the warranty for 5 years and their sales have just started to get momentum in the last 1-2 years. The warranty helped, but did not produce instant results.
4. The "american revolution" ad campaign was not an apology or a story of starting over. Why is it even being mentioned with the other ads?
5. You say Gm has been reinventing itself since you were 17. Have they gone through chapter 11 before? no. The entire point of Chapter 11 was to solve problems that would have been nearly impossible to solve otherwise. Weren't you a fan of the process? To suggest this is yet another aimless reorganization similar to others is ridiculous.
6. The STS is hardly a volume player and in V6 form it stacks up nicely to the M35, 535, E350, etc. What exactly prevents the car from being competitive? It was updated in 2007 and costs less than its European rivals. Not sure that its a car GM is trying to hide when customers come in the door. How about some details.
By 1487
on September 15, 2009
09:30 AM
One other point: the entire premise of this article makes no sense. There is NO risk to GM. If a person who wasn't considering a GM product comes to a GM showroom and checks out a Cobalt and then doesn't buy it because he feels the Corolla is far better GM didn't lose anything. Even if he feels the Cobalt is slightly worse the fact that he came in opens the door to learning about compelling incentives or other Chevy products. If that person was highly skeptical and unlikely to buy GM anyway GM didn't lose anything. Getting people into showrooms (even to look at a Cobalt or Impala) is far better than having them not consider GM in the first place.
BTW, the Impala is GM's best selling car so I'm not sure why its mentioned as one of the cars GM should be scared of showing. Out of all GM cars it needs the least boost from this program. The Impala continues to sell in spite of all the negative press it gets. This program is aimed much more at people who might be interested in the CTS, Malibu or Lacrosse than potential Impala customers.
By wobbly_ears
on September 15, 2009
11:09 AM
@1487,
"Several major items are NOT covered for 5 years..."
Example?
By iskch
on September 15, 2009
11:51 AM
I remember Jaguar did the same thing a while a go. I think the timing for the campaign is not the right one but I could be wrong. Time will tell.
By estreka
on September 15, 2009
01:50 PM
Everyone is fighting over scraps right now. This, nor most other sales compaigns these days, isn't going to move cars. It's more of a publicity stunt.
The truth is that there's no market for cars right now (nor much else). A new car is a luxury purchase and most people can't (or won't) indulge at this time.
By tiruvan
on September 15, 2009
01:55 PM
To put it plain and simple I don't like the "attitude" that goes into this campaign. GM made horrible cars for over 20 years burning their customers cash and then went bankrupt taking billions from us tax payers. After "double burn" one would expect a more humble campaign not an "in your face" type one.
Like someone else said is GM backing all these claims with comparable warranties? NO! Then who's to say anything has changed for the better. In fact with all the quality and reliability concerns their warranties must be way better than the competition unless they know they are still making junk.
So buy if you enjoy getting burnt!
By hankattol
on September 15, 2009
03:13 PM
This is from Hyundai's website:
"5years/60,000 miles new vehicle limited warranty:
Covers repair or replacement of any component manufactured or originally installed by Hyundai that is defective in material or factory workmanship, under normal use and maintenance.
Following components covered for time and mileage limits indicated:
- Radio And Sound Systems (i.e. radio, cassette tape drive mechanism, and compact disc player): 3 years / 36,000 miles
- Paint: 3 years/ 36,000 miles
- Battery: 3 years / unlimited miles (100% covered 2 years / unlimited miles; after 2 years and within 3 years, 25% cost of battery and 100% labor cost covered)
- Air Conditioner Refrigerant Charge: 1 year / unlimited miles
- Adjustments: 1 year / 12,000 miles
- Wear Items: 1 year / 12,000 miles (e.g. belts, brake pads & linings, clutch linings, filters, wiper blades, bulbs, fuses)"
--ok 1487, which of these exceptions do you consider to be so major or is there some inside knowledge you possess of other bits not mentioned in this that they would refuse to cover. To me, the paint would be the only thing I might fuss about.
By brett8210
on September 15, 2009
03:36 PM
"First of all GM hasn't been doing ads like this for the last decade."
No they have been doing it for even longer. When the Cavalier was "redesigned" for the 1995 model year GM did a "we are doing better come look at us" campaign.
When the 1997 Malibu was introduced and won MT care of the year, they did an ad saying that "It is the car you KNEW America could build" A defacto admission that before we were crap.
See http://www.youtube.com/watch?v=_0nB22RcCF4
By george2040
on September 15, 2009
05:12 PM
"Will a 60-Day Guarantee Get You to Buy a GM Product?"
Probably not because I can't think of a single new GM vehicle I want enough to actually buy. GM has improved, but there are too many better choices are available in segments where I'd shop. The Corvette and the CTS are very good, but I just don't feel old enough to be caught driving them. The "mine's bigger than yours" size/mass race in full size pickup trucks leaves me more interested in older models that survived CARS euthanasia. The Malibu is OK, but I'd rather buy a Mazda6. Zero interest in a Cobalt after lots of rental car experience. Only interested in an Impala if it comes dirt cheap from a police car auction.
By vwblues
on September 15, 2009
06:50 PM
1487 you can't be serious about the Cobalt, I rented one for a 1300 mile weekend. I couldn't believe they still made a car that bad. My girlfriends Corolla may not be exciting, but it is a far superior car to the Cobalt. I've driven a new Malibu and it seemed as good or better then any other mid-size, but please get your head out of the sand and admit the Cobalt is not in the same class as several other compacts.
By 1487
on September 16, 2009
06:11 AM
Brett:
you are grasping at straws as usual. As I said, GM has not done an ad campaign like this one before and the new ads dont even say anything about GM's older cars being subpar. Its merely a challenge to consumers to check out what they have. Nothing more, nothing less. I know you hate GM and everything they do so its no surprise you are offended and reviled by the commercial. Big shock there.
"1487 you can't be serious about the Cobalt, I rented one for a 1300 mile weekend. I couldn't believe they still made a car that bad. My girlfriends Corolla may not be exciting, but it is a far superior car to the Cobalt. I've driven a new Malibu and it seemed as good or better then any other mid-size, but please get your head out of the sand and admit the Cobalt is not in the same class as several other compacts."
What exactly are you talking about? When did I say the Cobalt was world class? I said GM cant lose anything by having people come in and check the car out.
I dare you to name 5 substantive areas in which the corolla is superior. corolla has ONE advantage, mileage with the automatic- about 2mpg. That's it. In terms of handling, ride quality, space, quietness, build quality, interior materials and features its at least as good as the Corolla. I haven't driven the 2009, but I drove a 2008 and its mediocre in every way. The interior is worse than the Caliber.
By 1487
on September 16, 2009
06:16 AM
"--ok 1487, which of these exceptions do you consider to be so major or is there some inside knowledge you possess of other bits not mentioned in this that they would refuse to cover. To me, the paint would be the only thing I might fuss about."
My point is most manufacturers warranties cover everyting except wear and tear items for the same period. What good is a 5 year warranty with numerous exceptions? If you subtract the items mentioned and the powertrain (covered under separate terms) what exactly is left to go wrong with the car during the 5 year period? I am not awar of any other company that has so many exceptions to its bumper to bumper warranty. As you listed, several systems are covered for 3 years or less.
"When the 1997 Malibu was introduced and won MT care of the year, they did an ad saying that "It is the car you KNEW America could build" A defacto admission that before we were crap. "
1. Thats not what the ad meant, thats your presumption based on your biased view of domestic products.
2. What does that have to do with the ad Karl is talking about here? Nothing.
By nodomestics2
on September 17, 2009
08:05 AM
1487, You have got to be kidding me-on almost every point. My parents bought a new Chevy a few years ago. It has been in numerous times for warranty issues, lights come on that shouldn't, the power sliding doors(it's a minivan)don't work half of the time, it doesn't have a quality feel, it's underpowered, fit and finish is clearly sub-par, should I go on?
I own a 1999 Honda Odyssey with 158,000 miles. It still feels like a new vehicle. The doors close almost too easily, not a single light comes on the dash, etc.
My father tried talking me into buying a used Chevy like theirs becauase it was so inexpensive. I had to point out to him why it was so inexpensive. Their 40,000 mile Chevy is now worth less than my 158,000 Honda.
I swear people that talk up their GM's suffer from a mental illness.
By 1487
on September 18, 2009
05:41 AM
nodomestics:
I have no clue how your commentary has any relation to what I posted. What are you talking about? You are talking about a Chevy minivan (you dont even mention the year) that is no longer in production. What does that have to do with GM's current ad campaign. I dont know what minivan you are talking about but GM's last iterations actually had nice interiors and interior fit and finish has been on par for GM vehicles for at least the last decade. The Venture was not a great van in any way- maybe that is what you are talking about. BTW, I dont think a van with sliding door issues and a few warning light problems counts as unreliable. Did the van start every day and get them from A to B without problems? If so it would count as reliable.
I have seen many import products that are 10 or more years old- few of them look like new, especially on the inside. Stay delusional if it works for you though. I notice none of your comments mention any GM vehicles currently for sale. Why is that?
By pflyer
on September 18, 2009
07:32 AM
Karl,
I actually agree with 1487. There is no risk to GM. First, if they move a couple more Cobalts or Impalas, good for them. This money back deal makes no difference to me as a potential car buyer, but it might to others.
The other (and more cynical aspect) is they are playing with house money. It's easier for GM to rationalize this strategy when the government is backstopping them.
Oh well. Might as well. No big deal.
By 1487
on September 18, 2009
08:44 AM
pflyer:
Exactly how much money do you really think GM is planning to lose on this one? I seriously doubt they said "lets try a stupid promotional deal because the money we might lose isn't ours anyway". Hyundai isn't "playing with house money" and they have launched one incentive gimmick after another over the past year or so.
By mopar424
on September 18, 2009
09:20 AM
I agree with 1487 on most of these points, but Hyundai actually HAS been playing with house money as they have been subsidized by the S Korean Government for years. How else would they have been able to fund all their hyper-speed R&D?
By pflyer
on September 18, 2009
02:44 PM
1487,
I can not speak for GM's management mindset. I can only guess (which is all you or anyone else can do).
Since they are not making money selling cars, they probably have marching orders from the Feds to keep the factories humming and the product churning so the unemployment numbers do not appear as horrible as they really are. Remember, these jobs are not normal jobs, they are union jobs, thus held in higher regard by the Controlling Power (the Feds).
It doesn't matter one bit to me. If GM wants to give it a shot, more power to them.
By pflyer
on September 18, 2009
02:46 PM
1487,
I can not speak for GM's management mindset. I can only guess (which is all you or anyone else can do).
Since they are not making money selling cars, they probably have marching orders from the Feds to keep the factories humming and the product churning so the unemployment numbers do not appear as horrible as they really are. Remember, these jobs are not normal jobs, they are union jobs, thus held in higher regard by the Controlling Power (the Feds).
It doesn't matter one bit to me. If GM wants to give it a shot, more power to them.
By pflyer
on September 18, 2009
02:47 PM
Sorry for the double post.
By kurtamaxxxguy
on September 21, 2009
11:06 AM
Guarantee is nice (basically an expanded version of the Saturn new car return policy),
...but until GM gets their dealer network and service more consistent, no thanks.
By euroman71
on October 2, 2009
07:51 AM
I have to disagree with 1487 statement that
"Average consumers don't rate cars on plastics or steering feel like auto writers, they could care less about such things. at the right price, Gm's older models are definitely acceptable to the non enthusiast."
They do care, otherwise Chrysler would have been a success. It's what gives a customer first impression about the overall quality of a car. Just look at the Jeeps, and even Chrysler 300, all plastics, and a bare minimum in terms of interior design.
Initial quality is very important to consumers but in the end it is the long term dependability (5 years or more) that sets certain brands apart from others. Most people know that if you want a trouble free transportation for many years to come, go with Japanese brands, although Ford is catching on.
Only time will show if the new commercial will be successful in bringing people back to GM dealerships.