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Automaker still must convince buyers its vehicles are worth checking out
By Micheline Maynard New York Times
Published on Friday, Nov 23, 2007
DETROIT: General Motors has been getting some attention that it isn't accustomed to: warm reviews for its new cars.
''At last, a decent midsize car from General Motors,'' Automobile Magazine said of a stylish new version of the Malibu. The new Cadillac CTS is ''an excellent luxury sport sedan,'' raved http://www.Edmunds.com, which praised the more powerful engines that GM has made available on the car. And in January, the Saturn Aura was named the North American Car of the Year by auto writers.
This is all a sharp contrast to six years ago, when the legendary product expert Robert A. Lutz arrived at GM to take charge of vehicle development. Back then, the
company was selling cars and trucks that he admits — in his typical blunt-talking fashion — he never would have parked in his vast personal garage.
Now, he says, GM's new models can be compared to the best that the company's Japanese and German competitors have to offer.
The question is, will enough consumers compare them — and choose GM?
Despite Lutz's efforts, GM still has a hard time getting on drivers' shopping lists. Its market share, close to 28 percent when Lutz arrived, has dropped to just under 24 percent, in part because GM has pulled back on unprofitable sales to rental car companies.
But there are other factors holding GM back, too, that might be hard to overcome despite the improved lineup of cars.
Perhaps the biggest challenge is changing the way consumers think about its cars. The idea that GM's cars have been a disaster, even if the trucks were passable, ''has been so ingrained, and so hard to change,'' Lutz said.
Even he acknowledges that this might take another generation of vehicles to change, meaning well into the next decade — a long time for a company that has lost billions of dollars in recent years and whose competitors keep getting better, too.
''We have to be patient,'' Lutz said. ''It took us 25 years to work our way to where we were, and we can't expect that to change in a year or 18 months.'' Every well-received GM model helps to ''eradicate those past perceptions,'' he said.
Who's to blame for those perceptions? Fingers are pointed in all directions.
For one, Lutz cites the skeptical automotive media.
Lack of advertising
GM's dealers, for their part, have long complained that the company did not invest enough in advertising (though ads for the new Malibu seem to be everywhere, from recent baseball World Series telecasts to episodes of The Next Great American Band).
''You have to get people into the showroom, and that's a very hard thing to do, especially with the economy,'' said Ed Schoenthaler, owner of Crossroads Chevrolet Buick in West Chicago, Ill.
Schoenthaler and other GM dealers say they are pleased with GM's current lineup. But the public, he said, ''has no idea how good these cars are.''
Some consumers still feel burned by their past experiences with American automobiles. Faced with numerous choices of vehicles whose quality is more consistent, as measured by J.D. Power & Associates and Consumer Reports, fewer buyers want to take a risk, as GM's declining market share indicates.
For the Malibu and the CTS, GM made a particular effort to improve the interiors, which have ''always been an area of extreme GM weakness,'' Lutz said.
GM even released photos of the Malibu's two-toned interior before it showed the exterior, which has a much more sporty and curved look than the previous version.
''I think we can look everybody in the eye and say, 'Nobody in the planet makes a better midsize car than that,''' Lutz said.
But each model faces formidable competitors.
For the Malibu, it is the latest version of the Honda Accord, also fresh to the market. Ron Pinelli, the president of Autodata, an industry statistics firm in Woodcliff Lake, N.J., prefers it to the Malibu. ''The new Accord is all there,'' he said.
The CTS must combat a resurgent Mercedes-Benz, as well as BMW, whose sales are up this year while Cadillac's have fallen. Pinelli says he is impressed by the CTS, calling it ''awesome.''
Unlike the foreign brands, whose heritage has been honed over generations in Europe and the United States, GM must ''earn their way back into the hearts and minds of the American consumer,'' he said. ''You have to have great products, you have to have the advertising, and the deal has to be there.''
This time, both Malibu and CTS are receiving the kind of relentless advertising push that Toyota regularly gives to its new cars and trucks. For instance, GM has kicked off a four-month, $100 million advertising campaign for Malibu, hoping primarily to create awareness that an American company offers a car that can compete with Japanese models, said Mark LaNeve, GM's vice president for sales and marketing.
GM didn't do that with a car Lutz hoped would be one of the company's stars, the Saturn Aura sedan. It hasn't said how much it devoted to the Aura, but LaNeve acknowledged to the trade publication Advertising Age that GM ''could have spent a few more dollars.''
The model's sales have stumbled this year, though it was named Car of the Year by journalists at the North American International Auto Show in January.
Other GM cars have suffered similar fates. Lutz was disappointed at the tepid reception among consumers for some GM models, like the Buick Lucerne, a large family car introduced in 2006.
It received good reviews and good exposure. But Lucerne sales are down 14.5 percent this year.
Quality still an issue
GM's biggest problem is erratic quality, said Jake Fisher, a senior automotive engineer with Consumer Reports. Though Buick scored better than average in the magazine's recent quality survey, GM's seven other brands were listed as subpar. Cadillac ranked third from last among the two dozen brands measured.
''GM's making really nice cars,'' he said, ''but they're losing in reliability.''
Another issue, analysts say, is GM's proliferation of brands. LaNeve says its eight brands are an advantage. But Pinelli said the choices simply make it harder for individual cars to get attention.
GM's sales are overwhelmingly dominated by Chevrolet. It has about 14 percent of the car market, making it larger than all of Chrysler, and only slightly smaller than the market share held by Ford and Toyota in the United States.
Most of GM's other brands capture two points or less of the American market.
Even so, GM has been helped by good sales from its latest sport utility vehicles, as well as the Buick Enclave, a crossover vehicle with SUV features but carlike handling. Likewise, GM's newest pickup trucks sold well when they reached the market, with the Chevrolet Silverado often outselling the Ford F-series on a monthly basis. The F-series will not be overhauled until next year.
But SUVs and pickups are fast losing popularity in the face of $3-a-gallon gasoline, while the car market, dominated by foreign manufacturers, is growing.
DETROIT: General Motors has been getting some attention that it isn't accustomed to: warm reviews for its new cars.
Get the full article here.
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