General Motors has begun a major push to hang on to its US and Canadian ‘free agents’ – drivers of Pontiac and Saturn vehicles who have no brand to call home because GM is killing off those two divisions.
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The auto maker is offering owners of Pontiac and Saturn vehicles who bought at dealerships that are now closed in the US between US$1,000 and $2,000 if they trade in their vehicles and buy a Chevrolet, Buick, GMC or Cadillac, the four GM divisions that will remain.
In Canada, all GM owners are being offered a C$1,000 rebate to stay with GM.
GM sold 2.3m Pontiac and Saturn vehicles in the US between 2004 and 2008 and another 507,000 in Canada in that same period before announcing the elimination of Pontiac earlier this year. Saturn was originally scheduled to be sold to Penske Auto Group, but GM decided to eliminate that brand as well after the sale collapsed in September.
“We need to assure [those customers] that we’re going to honour their service needs, that we value their business and loyalty and we’re going to do everything we can to keep them here in the family,” Susan Docherty, GM’s vice-president of sales, said.
In the US, the incentive campaign is restricted – for now – to customers of dealerships that have closed or buyers of Pontiacs from a Buick-Pontiac-GMC dealership that has already stopped selling Pontiacs. Saturn stores are single-brand dealers.
In both countries, some dealers will continue to offer Pontiac models until late next year.
Production of Saturn models will stop before the end of this year.
The rise of such a large number of buyers without a brand to call home is unprecedented and represents a significant opportunity for rivals to pick up market share at GM’s expense, said Canadian industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants.
“Every one of these consumers is now a free agent, some loyal to a particular brand, but most loyal to a specific dealer,” DesRosiers said in a recent report. “With their brand – and potentially their dealer – gone, these buyers are free to buy a new vehicle from anyone.”
Hanging on to these customers is more important for General Motors of Canada than it is for its parent company because the two brands represented about 8% of total Canadian vehicle sales for the past four years. That’s about double the share Pontiac and Saturn held in the US market.
DesRosiers said it would be difficult for GM to keep these owners in the family.
Pontiac, he said, was always positioned higher than Chevrolet in the ranking of GM brands developed in the 20th century under legendary GM chairman Alfred Sloan.
Saturn, meanwhile, was established in the 1980s to fight off imports, mainly from Honda and Toyota.
“It is hard to identify another GM product that could be considered an ‘import fighter’ today,” he said.
Any company that targets such buyers – including GM – will need to develop a targeted strategy and move aggressively in the two markets during the next few months, he said.
