A few weeks ago, we reported the status of GM’s Satisfaction Guarantee Program. Today’s conference call with GM’s Mark Reuss and Susan Docherty provided more details about the program: in total, 300,000 vehicles have been sold since between September 14 and December 6. Out of those 300,000, only 193 have been returned.
In an effort to solicit feedback, GM executives set out to call every customer who returned a vehicle under the program – a move we welcome wholeheartedly. Today, GMAuthority has learned the details about two of those 193 returns, a Malibu and a Silverado.
The Malibu Return
Even after going through with the return, the customer was still of the opinion that the Malibu is the best vehicle in its class. As Mark Reuss explained, the problem seemed to be centered around the fact that the buyer, a former Oldsmobile owner, found out that GM was in the process of selling Hummer and phasing out Pontiac. Upon discovering this information, the buyer returned the vehicle.
The GM Authority Take
If we read into this a little, we may be right in assuming that the customer was afraid the Chevrolet nameplate would be phased out and/or sold, following in the footsteps of Saturn, Pontiac, or Hummer . The problem seems to be consumer confidence in GM; more specifically – being sure that one GM brand would be kept around indefinitely. But if we put on our common sense hats, we would realize that Chevrolet would most likely be the very last brand to go if GM closed up shop and decided to sell (or discontinue) its brand portfolio. Was the customer’s reason for returning the Malibu unfounded? We don’t think so: after all, it’s nobody’s problem but GM’s that customers fear buying its products – whatever the reason may be. As such, it goes without saying that the General Motors brand is tarnished and needs to be repaired. Strengthening the four core brands will help restore the GM brand over time.
The Silverado Return
Mark Reuss went on to tell us about another return under the Satisfaction Guarantee program. This time, the rejected product was none other than a Silverado Crew Cab in Kentucky. Apparently, fuel economy was not up to par, at least not up to this buyer’s standards. The customer also cited a painted surface around the hood area not being finished up to par, along with dissatisfaction with the amount of space in the cabin (or, lack thereof).
The GM Authority Take
This one is not as clear-cut as the Malibu return: we (obviously) don’t know what kind of fuel economy the customer was expecting from a half-ton pickup truck, let alone the driving habits of the buyer – so we can’t comment with any kind of certainty on the fuel economy bit. The same goes for the painted surface portion: we weren’t there, didn’t see it, and don’t know. It could’ve been a defect on GM’s part or it could not have. But as far as cabin room goes, this one may be a valid point that Chevy engineers will need to consider when redesigning the Silverado.
Now if we could only find out about the remaining 191 returns… but we can see how this information could be a competitive advantage for GM (read: not something The General would just give away).
Comments
Alex – great site!
You really seem to have your head in the GM space. It just so happens I spend all my time in dealerships almost everyday. I spend my time training the personnel in the front end. I can tell you, and this isn’t rocket science, that the program has been great for the sales teams I’ve dealt with with respect to not only their own confidence but also the confidence they are then able to instill in their customers.
Financial services, while on board, has one heck of a mess to deal with if a vehicle comes back and they have to roll back all the contracts. As you stated clearly – this is a rare occurrence so it isn’t really anything to worry a bout.
What was they guy thinking when he bought that truck?!?!?!!?
I’ve bookmarked your site – unlike mine yours has value, especially to me as this is my business. Thanks for everything.
Thanks! Really appreciate the support 🙂
Yeah, I can imagine the effect that the program is having on sales people and dealerships. I hope that GM keeps the program around indefinitely – or at least until they dig themselves out of the whole (read: not stabilize, but kill the competition).
That said, I didn’t think of the financial mess created by a returned vehicle. Hopefully GM has the proper processes in place to deal with that. And if it’s not too much to ask, pass along our site at the GM dealers you’re in. We have a daily and weekly podcast that would help them keep afloat on all the latest GM news. Of course, a tweet wouldn’t hurt either. 🙂
– Alex
You do wonder what divisions GM will close sooner than later as it seems self-evident that they did not finish the job of reorganizing themselves. Why GMC? To placate some dealers? I can not think of a more obvious candidate to “go away” because it duplicates the Chevy line of trucks with no particular purpose. Even though Buick is reported to have very strong sales in China, I can see little long term benefit to maintaining the brand. (Presumably, it is maintained to have something between a Chevy and a Caddy. It would be easy enough to have Chevys with an upgraded trim level and/or a somewhat lesser Caddy. I think that there are still too many dealers under the GM badge(s), but time will tell.
I suspect that the buyer who returned the Malibu did not have confidence in the survival of GM because it has not taken sufficient action to reposition itself.
Richard,
GMC is a constant pet-peeve of mine. Unfortunately (for me and you), the brand is highly profitable – mostly because it’s a quick and simple re badge, nip-and-tuck of Chevrolet trucks (and now, CUVs and possibly even compact hatches in the future) that’s sold at a premium. You have no idea how much this annoys me (and Manny, too). In my opinion, GMC can be made a good business case for but sold AT CHEVY DEALERS.
We’ve been talking about this ad nauseum here
As for Buick, I think it’s one of the most misunderstood New GM brands. I don’t even know if GM realizes the opportunities that Buick can bring. Basically, I’m of the opinion that GM can dominate the luxury car market with two brands – Caddy and Buick. Cadillac will serve the performance-luxury segment, while Buick will focus on pure luxury. The two segments are very different and – in my opinion – need to be catered to with different products. We discussed this on our first and second weekly podcasts (back when we were called GMc Weekly) 🙂
I’m also in the process of writing an in-depth proposal to GM about this (that I will, of course publish on the site as well). Iin a nutshell, Buick shouldn’t be an in-between brand, but should be its own luxury brand.
I think you’re right regarding the buyer who returned the ‘Bu. It’s a parent company confidence thing. I remember reading about it in one of my marketing books: there is a segment of the population that not only considers the very product they’re buying, BUT also takes into account the entire parent company and brand/product portfolio.
For example, if I were to fall into this category, it would go something like this: I am a fan of performance cars but only have a budget of $10,000 for a new car. So I would buy an Aveo over a Yaris, simply because GM makes such products as the Camaro, the ‘Vette, and the Holden Commodore Sport//SS/V. Toyota, on the other hand, only makes the IS-F and the LF-A as far as performance goes. So the entire line-up (of the parent company comes into play). Hopefully that all makes sense. I think the buyer who returned the Malibu was one of these customers. They’re not that uncommon (forgot the statistic, but I think it has something to do with the left/right brain theory); he saw Pontiac and Hummer (two “very GM” companies) going away/being sold off, and that made him think less of GM and its product portfolio. Return. Bam! 🙂
Sorry for the long reply
– Alex