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GM’s Biggest Problem: Perception

 

Let’s face it, GM has been through some rough times over the last few years. The good news, however, is that our favorite automaker is getting a lot more confident! And it deserves to: today, The General’s product line-up is more competitive than it has been in decades and the company isn’t even close to having completed its turn-around (global platform and model integration is still ongoing). So how is GM getting more assertive?

Probably the biggest evidence of true boldness at GM is the recently-launched Satisfaction Guarantee program (aka May The Best Car Win). It’s not every day that we experience a chairman of a multi-billion dollar car company come out and tell the public, “Car for car, when compared to the competition, we win, simple as that.” But GM took that statement a step further, giving buyers 60 days to buy any GM vehicle and in the case they don’t like it – take it right back to the dealer and get their money back! If those aren’t fightin’ actions, I don’t know what are.

But the battle doesn’t end there: GM released an onslaught of advertisements over the weekend aimed squarely at the competition. Here’s another ad pitting the line-ups of Chevrolet and Toyota:

The Satisfaction Guarantee program as well as the series of accompanying ads waste no time and get right to the point, comparing GM’s products with those offered by the competition. In fact, the commercials seem very similar to Apple’s belligerent Mac ads (that pit the Mac to the PC).

Of course, GM wouldn’t be able to do any of this without quality product to back up its claims. And that’s where the problem starts: it’s not that GM doesn’t have quality products – quite to the contrary – it’s products are top-notch! The General’s biggest problem right now is one of public perception (and politics). These are multi-faceted issues that span many psychological, marketing, and advertising subjects. For example, Hugh Hewitt – an outspoken socially conservative, evangelical Christian radio talk show host – has frequently called for a boycott to protest the “Obamaization of the American car business,” both on his syndicated radio show and on his blog. He even went so far as to call General Motors “Government Motors” and boycott GM’s products.

Then there is the issue of purchasing cars from bankrupt companies: a study conducted by CNW, just as GM went into Chapter 11, found that 37 percent of potential U.S. car buyers were planning to steer clear of the company’s products, whether for practical or political reasons. To be fair, I’m not sure how many car buyers even know that GM’s brand portfolio is made up of Chevy, GMC, Buick, and Cadillac. Nevertheless, perception is a major problem that GM needs to work on by incorporating effective and convincing advertising, continuing to produce top-notch vehicles, and delivering an amazing buying experience and customer service.

It’s still early on in GM’s post-bankruptcy existence, but it looks like the plan seems to be working thus far: two days after the original Satisfaction Guarantee commercial aired featuring Chairman Whitacre, GM found a 14% shift in willingness in the public to consider its vehicles, according to GM Vice Chairman Bob Lutz. In his live web cast September 14, he wrote, “These are good signs.”

Indeed, they are. With the product gap closed, GM should continue to close the perception gap. Go GM!

GM Authority Executive Editor with a passion for business strategy and fast cars.

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