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NINETY EIGHT REGENCY

GM Eager to Retain Pontiac-Saturn Customer Base

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GM Eager to Retain Pontiac-Saturn Customer Base

By Eric Mayne

WardsAuto.com, Oct 28, 2009 3:27 PM

DETROIT – General Motors Co. is entering the free-agent market.

The auto maker will reach out next week to some 1.6 million customers affected by the wind-down of its storied Pontiac brand. Susan Docherty, vice president-U.S. sales, calls these consumers “free agents” and says GM will attempt to steer them to Buick-GMC or Chevrolet dealerships by offering free oil changes.

GM also will distribute information about Buick, GMC and Chevrolet product portfolios as it tries to keep these customers “in the family,” Docherty says, adding a similar campaign is being planned to woo Saturn-brand customers.

Penske Automotive Group Inc. had intended to keep Saturn alive using, in the near-term, GM-built vehicles. But those plans imploded earlier this month after a key Penske partner backed out.

Docherty, on the job as sales chief for less than 10 days, describes next week’s marketing campaign during a media briefing designed to demonstrate how GM has advanced since emerging from bankruptcy in June.

Against a backdrop of encouraging data for October, she and GM sales analyst Mike DiGiovanni paint a picture of a company that is struggling mightily to leave behind the business model that triggered its embarrassing collapse.

GM is making progress, Docherty says, but executives are not ready to “declare victory.”

As GM trims its dealer network to 4,200 stores by year end, its inventory is weighed down by 12,000 Pontiac vehicles and 20,000 Saturn vehicles. But Docherty is unfazed.

GM sales chief Susan Docherty encouraged but not ready to “declare victory.”

October could mark the first month since January 2008 that GM can claim a year-over-year sales hike. “Our dealers are very optimistic,” she says, attributing their confidence to the appeal of key vehicles such as the new-for-’10 Chevrolet Camaro muscle coupe and the redesigned ’10 Equinox cross/utility vehicle.

This year could see the Camaro outsell its archrival, the Ford Mustang, Docherty says. After outselling the Mustang during the third quarter, 23,754 to 17,892, the Camaro trailed by just over 12,500 units, according to Ward’s data.

The Mustang has been on the market all year, while the Camaro went on sale in April, Docherty notes.

Meanwhile, the Equinox has been so hot, inventory is in the range of 10 days’ supply, she says, adding GM has approved a third production shift at the Ingersoll, ON, Canada, plant where it is assembled.

Docherty assumed GM’s top sales job Oct. 16 following the departure OF Mark LaNeve. And already, two things are keeping her up at night.

Languishing residual value of GM products continues to discourage sales, she says. But early indications from newly launched vehicles such as the Equinox suggest an upward trend.

Equinox buyers can expect to recoup 45% of its cost, a 13-point jump over the previous model, Docherty says. At the top end, a 52% residual value is attached to the redesigned-for-’10 Cadillac SRX CUV – 21.5 points higher than the outgoing model.

Proper incentive management is critical to improving GM’s residual values, she adds, admitting the auto maker ranks among the industry’s biggest spenders at $3,500-$4,000 per vehicle, on average.

That number will come down, Docherty adds, but incentives will not vanish. “They’re part of the sales equation,” she says.

The other issue causing Docherty’s insomnia is GM’s relatively poor showing in the latest vehicle ratings published by Consumer Reports magazine. Though the publication recommended 12 ’09 models, up from prior-year’s 10, nearly half of the 48 vehicles returned average scores for reliability.

While GM normally scores high on safety and performance, she expects reliability ratings will improve as consumers spend more time in GM’s newly launched vehicles.

Docherty also reveals GM’s lease penetration will come in this month at 2%-2.3%, which is markedly lower than the auto maker’s historic 20%-22% average but less than the 11%-15% target range.

Docherty says GM is carefully managing its lease penetration by nameplate, instead of following a portfolio-wide, across-the-board strategy.

DiGiovanni echoes Docherty’s optimism regarding GM’s current performance, but warns the industry is “not out of the woods” because damaging effects of the global recession still linger.

Banks burned by rising default rates are still clutching their purse strings, while consumers keep a wary eye on the job market.

“Until we see employment levels rise over time, people are going to continue to be cautious” with spending, he says.

link:

http://wardsauto.com/ar/gm_pontiac_saturn_091028/

Edited by NINETY EIGHT REGENCY
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Yeah, um... good luck with that.:rolleyes:
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We'll see how GM reaches out to my household with this plan... we've got these two brands int he garage - my '07 Saturn AURA XE and the wife's '08 Pontiac G6 V6 Sedan. I'm willing to give the New GM a chance, but they're going to have to work for me this time around.

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Here' something to chew on. Why is it that certain dealers that were in the 'good graces' of GM started started consolidating before bankruptcy? I know of a few instances where dealers when on buying sprees, buying up great locations where both a Chevy and Pontiac store existed close by, as to put them in a position to 'own' the market when the Pontiac or Saturn store were closed down. :AH-HA_wink:

Things that make you go hmmmm, no?

Undoubtedly there is going to be pain, but for the dealers left standing, there is a pot of gold at the end of the dark tunnel. Dealers need to sell 400 units a month to be profitable, and I can say with a great deal of confidence that when there are only 4 or 5 GM dealers left within the city of Toronto's boundaries, they will be laughing all the way to the bank.

It's ugly and perhaps even unfair, but most markets were so over saturated with GM dealers that not only were they unprofitable, but their desperate vacillations to stay alive were confusing the consumers even more. When the dust settles, I warrant there will be a better buying experience left for people who venture into the remaining GM dealers: they will be profitable, happier and able to provide better service to their customers because they won't be worrying about paying the rent next month, or frantic to not let a customer walk out the door! When customers smelled blood in the water last year, the number of games they were playing increased, as were the number of games the desperate dealers were playing. It was ugly and it will benefit all when it is finally over.

Over at Lexus, it's easy to provide free lattes when you are making $5k a car and customers are lining up for them.

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I think you've hit the nail on the head.

Several of our local GM dealers that closed were not very good.

One dealer that is good is Dave Gill Pontiac, now Dave Gill Chevrolet. I would seriously consider buying another car from them, I've bought GM cars there in the past and been really happy.

Hope that Dave Gill and our other local "good guys" continue to do well.

Chris

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This is nothing new.

The local Olds Dealer went to Pontiac Buick before Olds was anounced to close. They only had to take the Olds off the sign.

And before Pontiac Closed they bought out the local Chevy dealer too. So now they are a Buick, GMC and Chevy dealer in two locations. They have been with GM for around 75 years and have always responded to GM's programs in upgrades of dealers etc.

Also another dealer is going to gain a Chevy dealer to replace Pontiac in their new Building. Off the record the one of the owners was assured by GM they would be taken care of in the end.

Once Chevy and Saturn dealer was a 80 year old dealer for GM and did a ok job. But they never moved their dealer nor have built a new building in 40 plus years for Chevy so they will be closing soon. They spent all sorts or money on Lincoln, Mercury, Hyundia and Mitsu. But did not spend a dime on the Chevy dealer. Now they wonder why GM is closing them.

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Apparently Susan was offering Pontiac owners etc. a 'free oil change'.

Does that include a dipstick inspection, ?

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Good luck with that, I decided I am staying mostly because of my dealer, and the chance of getting a new Caprice, LaX, Camaro or next generation Impala. Also I am sticking with them because of the good luck overall I have had with my GM cars. The other reason I am staying is I believe in an American company over any forigen stuff.

The way to get market share back would be, get rid of Fritz, and bring back PONTIAC, at the very least it would be a start.

Edited by gm4life
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On second thought HUGE and I am HUGE rebates for current Pontiac and Saturn owners on a new Chevrolet, Buick, GMC, or Cadillac could help a great deal. Make them so big, you'd have to be a total fool to turn them down. That might "get them/keep them" in a GM car, or at the very least it wouldn't hurt.

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That would only attract cheapskates who aren;t willing to pay actual price for a new car. Rebates hurt the automaker. It's not helping them a whole lot if they have to take 5k off the sticker so cheap asses will buy them. No profits = bankrupt again.

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On second thought HUGE and I am HUGE rebates for current Pontiac and Saturn owners on a new Chevrolet, Buick, GMC, or Cadillac could help a great deal. Make them so big, you'd have to be a total fool to turn them down. That might "get them/keep them" in a GM car, or at the very least it wouldn't hurt.

Wouldn't that just compound the problem? Most people seemed to buy Pontiac's because of the huge rebates, and the money on the hood. They should be buying GM offerings because the vehicles are substantial, and are competitive offerings.

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That would only attract cheapskates who aren;t willing to pay actual price for a new car. Rebates hurt the automaker. It's not helping them a whole lot if they have to take 5k off the sticker so cheap asses will buy them. No profits = bankrupt again.

+1. GM has to be able to sell cars on their merits, not the Wal-Mart 'low prices everyday' BS that rebates imply.

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Wouldn't that just compound the problem? Most people seemed to buy Pontiac's because of the huge rebates, and the money on the hood. They should be buying GM offerings because the vehicles are substantial, and are competitive offerings.

This

+1. GM has to be able to sell cars on their merits, not the Wal-Mart 'low prices everyday' BS that rebates imply.

And This.

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It would keep them in GM cars, if that is the goal. Get them into a GM car because of the rebate impress them with a great new car from the "NEW GM" and give the customers good service, and hopefully they will be back again for one of the four core brands. Make sense to me, I would bet they would loose hardly any market share. When I say big I mean another grand or two on top off all other rebates. Couldn't hurt, would it the best idea certainly not but better than what they did for the Olds buyers. Do you really want to repeat that?

Edited by gm4life
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That would only attract cheapskates who aren;t willing to pay actual price for a new car. Rebates hurt the automaker. It's not helping them a whole lot if they have to take 5k off the sticker so cheap asses will buy them. No profits = bankrupt again.

Yes, but seeing it from now having two orphan cars (Olds, Saturn) AND having my GM shares wiped out, a killer deal might be the only thing that might sort of make amends to me.

Edited by fightingbee
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Yes, but seeing it from now having two orphan cars (Olds, Saturn) AND having my GM shares wiped out, a killer deal might be the only thing that might sort of make amends to me.

Exactly... It keeps them in a GM car and hopefully its a really good car like a Malibu, Enclave, LaX, SRX, Terrain, Equinox, Traverse, CTS etc. and then they can be impressed with it, and WANT to do buisness with GM again, instead of being pissed at them they will be impressed. (Also keeps them in a hopefully good GM dealer with great service and staff...) Could it be any worse than the way they did it with the Olds customers? Just a thought a grand or two in addition to all other rebates couldn't hurt for Saturn and Pontiac customers if they are in fact want to keep customers. Just a thought, I do know what rebates do, and nor would I offer this forever maybe a year or two.

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On second thought HUGE and I am HUGE rebates for current Pontiac and Saturn owners on a new Chevrolet, Buick, GMC, or Cadillac could help a great deal. Make them so big, you'd have to be a total fool to turn them down. That might "get them/keep them" in a GM car, or at the very least it wouldn't hurt.

x2 you dont want anyone defecting

Edited by regfootball
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That would only attract cheapskates who aren;t willing to pay actual price for a new car. Rebates hurt the automaker. It's not helping them a whole lot if they have to take 5k off the sticker so cheap asses will buy them. No profits = bankrupt again.

4/5 of GM's product has ridiculous MSRPs part of the reason they are getting schooled is the wheel of fortune prices they conjure up.

38k for an equinox? wtf?

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4/5 of GM's product has ridiculous MSRPs part of the reason they are getting schooled is the wheel of fortune prices they conjure up.

38k for an equinox? wtf?

Ouch..can the Rav4 and CRV go that high?

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It would keep them in GM cars, if that is the goal. Get them into a GM car because of the rebate impress them with a great new car from the "NEW GM" and give the customers good service, and hopefully they will be back again for one of the four core brands. Make sense to me, I would bet they would loose hardly any market share. When I say big I mean another grand or two on top off all other rebates. Couldn't hurt, would it the best idea certainly not but better than what they did for the Olds buyers. Do you really want to repeat that?

cheaper to throw them a rebate than it is to spend xxxx more trying to court a whole new bunch of buyers that don't care.

for every lost GM customer how much do they need to spend with dumbass new ads trying like hell to mindfk the idiots out there?

any customer they throw away now and give up, it will just cost them 10x more in the future to get em back....just like losing a pro sports team

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Ouch..can the Rav4 and CRV go that high?

only a dumbass would pay that much for a mediocre compact SUV

how many of you all realize that this isn't 2004 / home equity a plenty anymore

Edited by regfootball
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About the only thing that would keep me in the fold at this point is a huge rebate. I plan for my next couple of new car purchases to be non-GM. Not because of the bankruptcy, though. More in protest over a lack of quality than anything else. I love our '08 VUE but absolutely hate the million little problems it has had. None of them have been major but after a while it gets annoying. They need to learn how to launch an all new vehicle without it being such POS in the first model year.

I still love GM, will probably return to the GM family and wish them nothing but future success but at least in the short term I am switching sides.

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for me its about how GM is basically abandoning the lower priced segments and really are setting themselves up for epic fail in terms of volume, a few models withstanding.

the cruze should be decently competitive. but aside from that, what does GM have that is priced attractively once you add a couple options?

the malibu pushes the limits of acceptable pricing on the monroney.......

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Don't think of it as a rebate, think of it this way: you are paying the customer for their lost resale value, caused by orphaning them. This would not be like a normal rebate, available to everyone, this is an attempt to keep customers loyal after killing their brand. It stands the best chance of succeeding out of all the plans I've seen, and I don't see how it would affect residuals on the vehicles purchased through the plan because it is only for a select group. They should definitely do it. It's the least they can do after smacking those people in the face for being loyal up to now.
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