While General Motors’ United States sales have remained strong throughout the company’s recent recall woes, our neighbors up north have not been so kind, as sales at GM Canada have dropped by 2.3 percent in the first-half of 2014.
Bloomberg Businessweek reports that GM’s woes in Canada likely began before the company’s scandalous ignition switch recalls hit the news. “Some of it’s related to the recalls, some of it’s just because they have horrific issues in their distribution network with car dealers fighting with each other going back five years in the bankruptcy,” said president of DesRosiers Automotive Consultants Dennis DesRosiers.
DesRosiers told Bloomberg Businessweek that GM Canada did not file for bankruptcy as its US counterpart did in 2009. Instead it chose to get rid of nearly 250 dealers “overnight.”
“In a lot of the small and midsized towns where these dealerships closed, the loyalty was more with the dealership than with the brand,” DesRosiers added. Or as Bloomberg Businessweek put it: “When dealers decided to sell another brand, their customers followed.”
Other factors may be prohibiting the company’s sales success up north, such as its brands’ limited presence in major cities like Toronto and Vancouver. “The land there is just so expensive and so hard to get,” director of special analysis for IHS Automotive, Margaret Little, told the business publication. As such, the company’s market share in Canada fell below that of Chrysler and Ford. Conversely, GM leads all other automotive brands in the US for market share.
As GM’s seventh-biggest market, Canada is particularly important to the company. With total vehicle sales in Canada up for the first half of the year, GM Canada may need to reevaluate its strategy to ensure its success in the growing market.
Comments
I have witnessed Chrysler eat GM’s lunch. The ram truck seems to be outselling the out of touch GM models. The Chevrolet Silverado sadly will just try slap a different grille on a truck with a completely flawed design.
1. Why does GM not have sliding rear windows available in all trim levels?
2. Why have they kept the same cab sizes when the competition offers much more room?
3. The new 8speed auto needs to be available on every truck they sell outside of the duramax.
4. Quit making your 4×4 trucks look like low-riders, it ruins the brand.
5. A legitimate off-road truck model is needed asap to increase brand image.
In my area (New Brunswick) the GM truck twins sell terribly even though they are great product, but that all traces back to a bad local dealership that people don’t like. The Sierra has been outselling the Silverado for a few years now. NB is not a rich area by any stretch and it seems like the GM trucks are thousands more than the competition and continue to sit on the lots.
I’ve seen maybe 10 x 2014 impalas since they began selling a year ago. I looked into a 2014 impala and for $42k I can understand why people are choosing other vehicles. The Cruze and Sonic do well but 2013-2014 malibus have missed the mark with the media and marketing and can’t hold on against the Camry and Fusion.
Part of this is political as well. Many Canadians don’t like the current federal government and view the help GM Canada got in 08 as a political gift and identify the company with a governing party they dislike.
Meanwhile I’ve owned two Canadian made impalas (oshawa), and am happy they will be around for years to come.
I agree with this article , and I would go on to say that GM has abandoned the Canadian Market. The fight with dealers is obvious, and leaves us little choice of where to shop for the loyal customer base. Many of the better retailers took on imported franchises and are using the GM franchise for pickups only and converting their GM customer base to their developing new franchise . GP is the top concern, not sales market share etc. GM prices all of their vehicles in this market well above the competition and the American market although the dollar is similar .. there is no marketing in eastern Canada, radio / TV or print , Ford, Chrysler own the media . In addition to closing down a huge number of dealers ( in major centers GM has 1/2 the presence of Ford or Dodge ) they are also moving out most manufacturing out of Canada , truck s , soon to be the Camaro, and I see bleeding with the ‘nox going to the US, even though the Canadian plants product some of the highest quality GM vehicles. GM has 2 priorities when it comes to sales and share , US and China. Canada is not just forgotten , GM only wants to maximize profit in Canada. I have been a loyal GM owner for more that 40 years , owing more than 30 new cars . We just bought a 2014 Cruze RS , sadly it may be the last GM for the reasons above.
I have wrote before regarding this. GM has real trouble in the GTA or greater Toronto area. Which by the way is the 4th largest metro area in North America. So it can not be ignored. I am not sure how to fix it, but GM does not seem to be first of mine for many here. I will say that Cadillac is starting to pick up. I was one of the first ATS customers on the road and for ages, one of the only ones you would see. Now I am seeing many, and young drivers too. In a city where every 3rd car is a 3 Series, C class or A4 it is refreshing to see more and more.
I have noticed that Old Mill where I get service has been amazing. They treat me like a star being a Cadillac Owner. That is the way it needs to be because if you go shopping for a Bmw or Merc, they are stand alone dealers and they are very upscale. You feel like you are arriving somewhere special. Old Mill and Budds are doing a great job at making me feel special even though the CTS’s are next to a Cruze. That is important if you are going to win over the proffesionals here.
Also, the money exchange thing IS brutal. My Luxury ATS with special paint comes in at 50K. WAY more then my buddy got one for in Colorado. That just plain sucks. It is not fair, and shame on GM or anyone who does it.
I am really curious to see how GM reacts!
Where I live in Vancouver, the market is much like California with a strong bias for import nameplates. But Chrysler has been able to be a success here, so why not GM.
As an ex-GM employee, I have usually owned GM and promoted GM vehicles for the corporate fleet in my capacity as the financial head. As both a personal and corporate customer it has been obvious that the GM dealers are incredibly weak. On one occasion where I found a highly professional sales lady I asked to see the president so that I could tell him how impressed I was. I truly felt I was wasting his time and he never bothered to tell the lady about my praise. When she moved to the competition, she told me that the lack of recognition was one of the main factors
One dealer, Dueck, seems to try embracing collector cars and stir up enthusiasm, but the remainder are lifeless, with little product knowledge and poor service.
GM is also to blame for the lack of body styles and selection in their cars. The upscale brands have a far wider model and body range. All Buicks, Impala, Malibu, Cruze and Spark are offered only in one body style, the remaining Chevrolet cars only offer two alternative bodies. We are told alternative body styles cost money to engineer, but they also expose you to a wider buyer profile. In many cases the engineering has already been done for alternative styles in other international markets.
Simply put, the momentum of the past is gone and to the consumer it appears that neither the dealers nor GM Canada care about this erosion.
Interesting observations. As a retired GM employee and former dealer I would also suggest that shabby treatment of the dealer body (250 dealers cancelled) and the constant under funding of the salaried retirees pension fund (leaving the threat of collapse) is also contributing factors.
To primarily blame the massive recall is smoke and mirrors. Many former customers of the 250 cancelled dealers have quite simply looked elsewhere for their new vehicle. I know I have also. GM also never recognized the loyalty of Pontiac owners which were a much larger component of sales volume in Canada than the US. The fact that GM received government funding (billions) without declaring bankruptcy also leaves a “bad taste”.
Lot of anger coming from north of the border.
I live about 130 miles west of Windsor, and it’s totally different than what has been described. The Ford/Mercury dealers are the ones who don’t have the greatest reputations, while the GM dealers are good. It shows… as GM products are the norm.
So close, but so far away in perceptions of a given product.