Automotive News [sub] offers-up the not-so-startling fact that luxury car buyers are trading down. “Downscaling.” Common sense suggests the number one reason not to buy a high-priced luxury car: the buyer can’t afford it. As any good car salesman will tell you, “afford” is an entirely subjective, infinitely malleable term. Hence the term “consumer confidence” as a measurement of whether or not people think they can afford something. You know; even if they can’t, really. And while you’re contemplating what all that means for the American economy, how about this: the “Power Information Network” (J.D.’s mob) reckons the move down the automotive food chain is a reflection of buyers’ psychological need to NOT impress the neighbors. “Especially in this recessionary period, neighbors may not want to show up one another as ‘For Sale’ signs go up everywhere,” [PIN general manager Geoff] Broderick said.” I call bullshit. Since when do Americans tailor their consumption patterns out of sensitivity to their neighbors’ financial distress? The whole stealth wealth thing is a myth. A California Mercedes dealer disagrees . . .
It’s easy to understand how a commercial like this gets made. Funny people miss the mark occasionally. What’s more difficult to explain is the decision to build an entire marketing campaign around such weak middle school humor. Are the executives at Subaru the same people who decided to buy the slapchop after Vince threw in the gratie, or did this actually test well thanks to Billy Mays nostalgia? If educated,experienced auto executives can be sold on this idea what hope do the rest of us have? Sebrings and WNBA tickets for all?
Unlike Chrysler and GM, Ford has managed to minimize the downward depreciation spiral that’s been plaguing business models across Detroit. In fact, FoMoCo has increased its net pricing by $1.9b in the first half of this year alone. Ford explains this achievement with a reach back to history: a team of 19 P.H.D.s tasked with managing pricing, production and option mixes is given credit, and compared with the “Whiz Kids” of the post-war era in the Detroit News. “They are unbelievable,” gushes Ford’s Jim Farley. “It’s very scientific. I’ve never seen anything like it in our industry.” The Global Lifecycle Analytics Department (GLAD) was formed in 2000, as a modern-day equivalent to the statistical analysis pioneers hired to bring Ford back from the brink of oblivion in the 1940s. By 2005 the team, led by Rose “The Silent Lamb” Peng, had figured out that “the resale value of Ford’s cars and trucks was being eroded by sales of poorly contented vehicles to rental agencies.” Go figure. Let’s hear it for statistical analysis.
So, Roger Penske is going to buy Saturn from GM. “Is going to” being the operative words. With the US automotive market sinking to record lows, musical chairing towards a long-overdue “contraction,” one wonder if Mr. Penske is playing the “waiting is winning” game. The New York Timesarticle on Penske’s Saturn plans doesn’t pierce the veil surrounding the devilish details. But we re-learn the fact that Saturn is working towards that glorious day when it no longer sells badge-engineered Opels. “’We’re going to have GM to start with in this business, and then we’re going to move on to another manufacturer in the future,’ he said in his call with analysts.” Which raises the obvious question: whom? “Speculation in the industry has centered on the French carmaker Renault, which has ties to both Nissan in Japan and Samsung in South Korea, and several Chinese auto companies as possible partners for Mr. Penske in the venture. But would Saturn loyalists consider a Chinese-made car a Saturn?” Renault, no. But it’s still an excellent question. The answering of which depends upon The Big One: what IS a Saturn?
It’s now been four months since I sent in my $5,000 deposit on a Tesla S all-electric four-door sedan. I still think it’s a cool car, but so far I’m very disappointed in Tesla’s communications with us S owners. After an initial flurry of messages confirming the order, assigning me a production number, and inviting me to the opening of the New York Tesla store, I’ve heard exactly zilch from the factory.
One thing’s for sure: they don’t BUY them. Exhibit A3. Sales of Audi’s premium compact are cold, cold, cold. In August, the German car company moved just 479 copies, bringing its eight-month year-to-date total to a paltry 2,295 units. Exhibit BMW. The 1-Series is a flop; just 914 examples moved off dealer lots in August, bringing their YTD total to 7,443.On the hand, MINI. In August, BMW’s British brand flogged 5,111 Coopers stateside, bringing their eight-month YTD total to 30,868 moved MINIs. Questions for the class: is that as good as it gets? Is the so-called small premium market saturated? And if you’re a dead car company walking trying to resurrect a dead brand walking, is it worth developing a new car for this niche market? GM’s film would have you believe that the “small premium” market is ascendant. If gas prices go through the roof . . . nah. As Ford said in one of its UK ads, “space is the ultimate luxury.” You don’t think Europeans buy small premium cars because they want to, do you?
Huh? Buick has not only lost the plot, they’ve lost the title of the book. Automotive News [sub] reports that GM’s uh, something brand, is changing its tagline. Again. You may recall that Buick changed its tagline in June. As in just over three months ago. Sure, that tagline sucked. As we pointed out at the time, “Take a look at me now” is/was a po-faced echo of a Phil Collins song about unrequited love destroying the piner. Our Best and Brightest suggested alternatives, none of which included “The new breed of first class.” Buick’s choice manages the virtually impossible: it’s worse than the existing tagline.
60 Day Satisfaction Guarantee Dealer Participation Agreement
On Monday, September 14, 2009, GM will begin to offer a national 60 Day Satisfaction Guarantee program to eligible customers.The Program will be announced initially through November 30, 2009. As a dealer, your full participation in this program is absolutely critical to the Program’s success.The terms and conditions of your participation in the program are fully explained below.We urge you to participate in this exciting Program designed to help drive traffic and build confidence in you and in your products.Starting on September 11, 2009, dealers can go to www.gmprograminfo.com to opt-out of this program.Click on the “GM 60 Day Guarantee Program” button, and then click on the “I Decline Participation” button at the bottom of the page. If you do not opt out of this Program by the close of business Tuesday September 15, 2009, you are participating under the terms and conditions described below.
In three day’s time, General Motors customers can (may?) buy a new car from any of the nationalized automaker’s four remaining brands safe in the knowledge that they can (may?) return the car for a full refund. The exact details of the deal will hit GM stores this weekend. While we await a look at the fine print (a.k.a. “other restrictions”), I called up GM to get as much inside dope as I could snort. GM’s Director of Communications for Vehicle Sales, Service and Marketing, Pete Ternes, told me dissatisfied car owners can return their GM whip between 30 and 60 days after purchase, as long as the customer doesn’t damage the car or put more than 4k on the odo. The refund covers the purchase price and sales tax and . . . that’s it. If you’ve got negative equity rolled into the deal, you’re still on the hook to the finance company. If you go for any dealer add-ons, kiss that cash goodbye. This much we knew from the press release. Here’s the new bit: GM has budgeted for a three percent return rate, although Ternes says New GM expects the number of bounce-backs to be “one percent or lower.” So, what happens to the car and who pays for the depreciation?
With GM’s decision today to offer a 60-day, money-back guarantee on new cars, we figured it would be fitting to ask what kind of reasons a person returns a car within 60 days? There are all kinds of reasons why a person would go through buyers remorse and we see it all the time here in our car lease trading marketplace. Keep in mind that LeaseTrader.com helps a person escape a car lease they no longer want, so we’d like to share the 20 most common reasons why a person would fall out of love with a vehicle – even as quickly as within 60 days.
GM’s new ad campaign, featuring Chairman Ed Whitacre, centers around the catchphrase “may the best car win.” According to the New York Times, the lure to new buyers will be a 60-day refund on any new GM product. In short, the perfect way to remind shoppers that buyer’s remorse comes standard on most GM vehicles. But that’s not even the craziest part of GM’s latest bid for consideration. To find out more, let’s just surf over to maythebestcarwin.com . . .
Automotive News reports, “General Motors Co. will launch a broad post-bankruptcy advertising campaign next week with an introductory TV spot featuring new Chairman Ed Whitacre . . . The idea is to showcase GM’s best products, with Whitacre urging consumers to take a look at what the automaker has to offer.” THIS is what Old GM Car Czar/New GM Ad Czar Bob Lutz thinks will turn around the nationalized automaker’s sinking fortunes? More pan-brand feel good advertising? Or is it worse than that; some kind of sick, twisted Motown plot to get Eddy boy to become a GM insider? I mean, guys, this is the former AT&T exec who celebrated winning his seat at the GM BOD table by publicly pronouncing, “I don’t know anything about cars.” The guy who said he’d only need to jet into Detroit for a day or so. PER MONTH.
Yup, Honda’s a glutton for Facebook punishment. After pulling the previous page to remove literally hundreds of disses against HoMoCo’s new Crosstour, the brand’s webmasters have gone for the red, red whine. The new images on the new page show the red Crosstour featured on the company’s official website. Which seems to have changed precisely nothing about autoblogosphere’s opinion of the CUV’s ugly ass—I mean, “controversial” styling. “New pictures prove to be more horrible than the first,” Facebooker Lewis Desoto opines, re-opening the decidedly one-sided “debate” dogging the, uh, you know. Punctuation-challenged Terrence Lee says, “the new pictures just shows how uglier this car can get !” Ditto Honda’s ongoing PR debacle.
Omnicom Group Inc.’s BBDO is Chrysler’s ad agency. At least for now. The Wall Street Journal reports the ailing automaker “has grown dissatisfied with the agency’s creative output.” The semi-nationalized automaker’s looking elsewhere for someone who wants to take on the sisyphean task of convincing Americans they need to buy cars from a bankrupt automaker with stale inventory that’s owned by another automaker with the one of the worst reliability ratings on the globe. Of course, marketing being what it is, all that’s needed is a catchy slogan akin to Toyota’s “What a feeling,” VW’s “Think small,” or Chevy’s “Like a rock,” right? That’s where you come in. What slogan or catch phrase would convince you to buy a Chrysler product? “Most smartly different?” Or what?
Experian’s AutoCheck has thrown down the gauntlet to its competitor, CarFax. AutoCheck says it’s better at providing the accident information car buyers want. This morning’s press release is all about diss and dat. “A new quantitative analysis conducted by Pipal Research, an independent, custom research firm, comparing AutoCheck and Carfax vehicle history reports, demonstrates that AutoCheck holds significant competitive advantages by reporting twice the number of accidents . . . By having access to more reported accident information when stocking their inventories and at the time of sale, dealers are better equipped to bring higher quality used cars onto their lots and be able to demonstrate that quality to consumers who place high value on this information.” CarFax is having none of it. “We’ve had claims like this made us against us in the past,” Communications Director Larry Gamache says. “Show me the study.” Gamache has no doubts about the supremacy of his company’s accident data. “We have 22,000 sources of information and 6.5 billion pieces of information in our database. CarFax is bar none the absolute best provider of vehicle history information. Period.” Ball’s in your court AutoCheck.
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