General Motors will have trouble getting Japanese car buyers to take a second look at its products due to its past poor quality, even as it launches a number of new cars, a top company official told Reuters on Monday.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
“We have a perceptual hurdle to overcome that’s going to take some time,” GM vice chairman Bob Lutz told Reuters at the Detroit motor show, where GM unveiled three new cars that go on sale over the next two years.
“I think it’s going to be tough, because just like the Japanese have had a tough time luring Americans out of US pickup trucks because the owners are so satisfied, it’s going to be tough for us to get Camry and Accord buyers [to] come back to look at American cars,” Lutz reportedly said.
However, a second GM official told Reuters he was optimistic that GM could carry its momentum of stronger market share figures from the second half of 2003 into 2004.
The news agency noted that GM boosted its US market share in the second half of 2003 to about 28.7%, up from about 28% for the entire year, according to GM’s head of North American vehicle sales, service and marketing, John Smith.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“We’re creeping up at a faster rate in the second half of ’03, and hopefully we’ll be able to sustain that rate,” Smith reportedly said, adding: “I’d settle for 28.7 (percent) for all of ’04.” Reuters noted that Smith wears a pin with ’29’, the automaker’s “stretch” goal for US market share.
A poor start to 2003 sales, due to the Gulf War and some hangover from a strong end to 2002, spoiled GM’s chances of gaining US market share for a third straight year, the news agency said, adding that, to change opinions, GM has launched some marketing programmes which get consumers to try its vehicles, including its 24-hour test drive programme, which allows consumers to take home a GM vehicle overnight.
On Monday, GM launched its “Hot Button” $US25 million giveaway of 1,000 vehicles to people who visit its dealerships over the next two months.
Reuters recalled that GM officials said in May last year that about 40% of US buyers do not consider buying GM vehicles. The comments came as the carmaker launched its “Road to Redemption” ads, which acknowledged GM’s past quality problems while asserting that its new vehicles deserve a closer look.
But some perceptions are slowly changing, as demonstrated by GM’s luxury Cadillac brand, which a few years ago was widely regarded as a dying brand, the news agency said – on Monday, Cadillac reported its best annual US sales tally since 1990 with an 8% gain in 2003 to 216,090 vehicles.
“(Cadillac) is getting a more youthful, more affluent customer who has driving BMWs in the past,” Joe Ivers, a partner with automotive industry research firm JD Power and Associates, told Reuters.
However, the news agency noted, GM’s Pontiac brand ended 2003 with US sales under 500,000 for the first time in 21 years.
But with the unveiling of two new Pontiacs at the Detroit show this week, the G6 mid-size car and the Solstice roadster, the sporty car brand expects sales to grow past 600,000 in the next few years, Reuters said.
