GM is announcing the arrival of the first “driveable Volt” in China, in a move that GM’s China boss Kevin Wale calls a sign of The General’s “long-term commitment to bringing our industry-leading technology to China.” And despite a distinct lack of Chinese demand for green vehicles, a recent survey that shows as much as 75 percent of Shanghai’s drivers plan to purchase an EV in the next three years (not to mention government plans for increased EV subsidies) is giving GM hope that its plug-in will take off there. But in order to achieve Chinese-market success with the Volt, GM will likely have to offer the vehicle at a price point well below its US-market MSRP of $41,000. (Read More…)
From a week deep in our “How The Hell Did We Miss That” file comes a Reuters report that shows GM considered floating its IPO on the Hong Kong Hang Seng index. GM’s interest in a Hong Kong float has obvious roots: the company is extremely well-positioned in China, where high savings rates and the prospect of steady local sales growth could have helped bring in both private investors and GM’s partner firms. But according to a Reuters source, GM rejected the idea because it would have delayed the IPO past its Thanksgiving deadline
I don’t think signaling goodwill toward Asia is likely to be a significant enough argument for all the cost and complexity. I don’t want to overstate the cost and complexity but it’s not insignificant
When Spyker bought Saab from GM, they bit off too much than they can chew. Spyker is upside down, under water, or whatever you call it when you have negative equity. They just announced that their debt exceeds their capital. And it looks like they have been dipped by GM: “The negative equity is due to the preferred shares that were issued to GM.” (Read More…)
Having recently invested in an all-new global compact car, the Cruze, it was inevitable that Chevrolet would eventually come out with an MPV based on the Cruze’s underpinnings. When the unavoidable people-mover debuted at the 2008 Paris Auto Show as the severely handsome Orlando Concept, its clean yet distinctive look certainly got our attention. And with initial plans calling for US production (Hamtramck), it seemed that The General really was ready to put up to seven Americans in a compact-car-based vehicle. But after we called the Orlando “The Cruze To Wait For,” GM entered bailout hell and the Orlando was canceled and uncanceled for the US market with every new executive that passed through the RenCen.Now, with the first images of the production Orlando hitting the web, the post-concept reality of Chevy’s “Delta MPV7” reflects its troubled development.
The very European-looking concept has been softened into what looks more like a US-market crossover (i.e. something you might spot in Orlando)… but it’s going to be made by Daewoo in South Korea, and is focused on the European market. And based on the current plans, Americans looking for this kind of car from GM will have to spring for a GMC Granite “Urban Utility Vehicle.” Because apparently GM’s product planners think Europeans are into generic, American-named people movers, while Americans are looking for over-the-top designs and an upmarket brand from their fuel-efficient kiddy haulers. On the other hand, as little sense as that premise makes, the production look of the Chevy Orlando won’t exactly inspire anyone to contradict it.
TTAC has a long, proud tradition of tearing into puffy automotive journalism, so it was not without a little trepidation that I wrote in the comments section of Michael Karesh’s excellent review of Zero To Sixty that
Toothless reporters put execs at their ease… which allows them to say naive or revealing things that toothy bloggers can then rip into. In a weird way, the worse the reporter, the better the reporting (as long as the quotes are then duly digested). As time goes on, I find myself more and more at peace with this evolving media food chain… and TTAC’s place in it.
To be clear, this is not an endorsement of toothless coverage per se, it’s just a pragmatic response to the reality that auto industry coverage will continue to be dominated by PR-approved puff. And this video provides yet more proof that non-threatening journalists are actually the most effective at snagging scoops, even if they’re totally unaware of said scoop. Which is where the bloggers come in. (Read More…)
Revitalizing a once-dominant domestic brand is a lot harder than telling the quality-improvement story of a once-reviled Korean value brand
and I think this video helps prove the point. For a brand like Hyundai, highlighting product details helped change perceptions… but then, Hyundai has never asked Americans to think of their cars in especially emotional, patriotic, or culturally significant ways. They’re just high value cars that have become better and better over time. For GM and Chevrolet’s new top marketing execs (freshly poached from Hyundai), the plan seems to be to follow the Hyundai “quality story” gameplan, with a little awkwardly hip flair. For a brand that’s been “the heartbeat of America,” “like a rock” and more, this latest video seems stuck in “excellence for everyone” (i.e. generic and directionless) territory.
Besides, when the word “solid” is used in marketing materials to describe a “3,100-3,300 lb” compact car, it sounds a little like a Mom calling her kid “big-boned.”
Hyundai’s most famous superbowl ad may have imagined executives at Lexus and BMW getting steamed at the success of the Genesis, but that’s not necessarily where the upstart Korean brand is making the biggest impression on competitors. In fact, it’s Hyundai’s ability to market value so successfully, even in the premium space, that’s got the other automakers steamed. But instead of getting mad at Hyundai’s building momentum and reputation, GM’s getting even. Having already poached away former Hyundai marketing boss (and the man behind this ad) Joel Ewanick to lead GM’s entire marketing effort, GM just snagged Ewanick’s replacement as VP Marketing at Hyundai, Chris Perry, to head up Chevrolet marketing [via Automotive News [sub]. That’s right, two VP’s of marketing from the same upstart Korean brand, both poached away by GM… You think The General might be looking for people who can tell the momentum-turnaround, finally-getting-some-respect-around-here storyline? (Read More…)
Since taking office in June, UAW President Bob King has ramped up the rhetoric level at Solidarity Hall considerably, as he seeks to portray the union as a defender of the American middle class. But, as the old adage goes, actions speak louder than words… and King’s actions this week couldn’t paint a clearer picture of the UAW’s priorities. (Read More…)
We are not even considering abandoning our campaign. Like every guarantee offer, ours also has conditions and these conditions are presented very clearly.
Opel’s sales and marketing boss Alain Visser fires back at Germany’s Wettbewerbszentrale (competition authority), which recently accused Opel of misleading consumers with its newly-launched “Lifetime Guaranty.” The Wettbewerbzentrale had argued that Opel’s warranty was “a lie” because, despite having no time limit, it only applies for the first 160,000 kilometers… which by definition is less than a car’s lifetime, right? According to Opel’s Visser [via Automotive News [sub]], that might not be the case.
Editor’s Note: With GM’s S-1 IPO filing hitting the web today, every IPO and auto industry analyst is weighing in on the offering, and the state of GM. Here’s a collection of some of today’s more notable comments.
It looks to me that GM should be worth no more than Ford. If that’s the case, then the taxpayers will lose about 50% on their investment.
Francis Gaskins, president of IPOdesktop.com, commenting in the WSJ [sub] on GM’s IPO. More analyst commentary on GM’s just-released S-1 filing after the jump.
The most interesting section of every S-1 filing is undoubtedly the “risks” section, in which companies are legally compelled to disclose all possible material risks associated with investing in their IPOs. Unfortunately, these risks are typically overstated, as no firm on the verge of going public wants to run into trouble with the SEC for under-reporting risk. As a result, many of the risks disclosed are fairly mundane, everyday risks in the world of business (currency, commodity price, and other economic fluctuations, etc). At the same time, companies rarely give reporters a full tour of their major risk areas the way these sections do, so they’re usually worth a read. GM’s just-released S-1 filing is no exception…
With GM’s IPO S-1 now set for a Wednesday filing, The General is announcing a joint engine development project with its Chinese partner SAIC, spurring on rumors that the Shanghai-based automaker could buy into GM’s forthcoming IPO. Reuters reports that GM and SAIC have signed an agreement to develop a new range of 1.0-1.5 liter direct-injection, turbocharged engines in the vein of Ford’s EcoBoost mills. The ground-up joint engine development is significant because, as the WSJ [sub] reports
it marks the first time when GM and SAIC – partners for more than a decade already – are going to develop “base” propulsion technology, going a step further than simply integrating existing engine and gearbox technologies into automobiles.
GM has already moved much of its advanced technology development to new Chinese R&D labs, and this attack on Ford’s EcoBoost technology is likely to become a global engine. But what does the ever-increasing cooperation between GM and SAIC (which recently bought out GM’s controlling interest in their Shanghai GM joint venture) portend for the GM IPO?
GM’s IPO filing still has yet to appear on the SEC’s EDGAR database, but while we wait for the S-1 form to clear, Reuters has some details on what to expect from the sale. The big news:
GM is mulling a plan under which sovereign wealth funds or pension funds would serve as “cornerstone investors,” a technique often used for large initial public offerings to show that key investors are supporting the deal, four people said…
Each cornerstone investor would likely be asked to commit to buying 2 percent to 10 percent of the IPO and cornerstone investors would likely account for 10 percent to 30 percent of the total IPO, one of the sources said.
On the other hand, another source says GM is targeting 15 percent of its equity towards cornerstone investors, with 20-25% is aimed at the retail investment market. Either way, Reuters points out that another recent large IPO of a government-owned business, the Agricultural Bank of China, relied heavily on cornerstone investors… but that the politics of such a strategy could be risky.
We object to the misleading, eye-catching advertisement, because contrary to the grandiose statement made in it, Opel is not actually offering a ‘lifetime’ guarantee
In competition law, there’s a principle that forbids any marketing statement that contains objective untruth. Statements that are a “lie” at first glance can not be “clarified” with an asterisk or be made relative. We don’t reject the notion that this car guaranty is different from those offered by other manufacturers. But the misleading title “lifelong,” which suggests an unbeatable advantage over the competition, has no place in advertising.
And considering that the Opel warranty is limited to 160k kilometers, that seems like a fair conclusion. Unless of course Opel is admitting that its cars are literally not designed to go more than that distance. Either way, Opel’s major brand-building effort is not off to a good start.
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