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GM offers 60-day money-back guarantee, will cut dealer discount

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General Motors Co., trying to woo consumers after a trip through bankruptcy, will launch a new advertising campaign Monday touting a 60-day money-back guarantee featuring GM Chairman Ed Whitacre.

The move is a bid to boost slumping sales and market share at a crucial time for the automaker, and for GM executives under government pressure to improve the company's fortunes.

GM, which received $50 billion in federal aid, is pouring millions into the "May the Best Car Win" campaign. The promotion will urge consumers to try 2009 and 2010 models from one of the automaker's four core brands -- Chevrolet, Cadillac, Buick and GMC. Anyone who is unhappy with their purchase can return the vehicle within 60 days.

The money-back guarantee, which does not include medium-duty trucks, runs through November but probably will be extended. "We really are in a position today where we can look anybody in the eye and say we are as good as or better than anybody else," said GM Vice Chairman and marketing czar Bob Lutz.

There are a few strings attached, however. The buyer must keep the vehicle for at least 31 days, be current on payments and not exceed 4,000 miles within 60 days. And the dealer will not refund any negative equity the buyer had in their trade-in vehicle.

The campaign will focus on vehicles such as the Buick LaCrosse and Chevrolet Equinox, and spotlight favorable comparisons to competitive models. It is an attempt to entice consumers who might otherwise hesitate to buy a GM product and to rehabilitate a corporate image bruised by the automaker's financial collapse and memories of poorly engineered vehicles of the past.

The money-back guarantee is not unprecedented.

Oldsmobile, a brand GM killed several years ago, and Volkswagen AG offered money-back guarantees in 1990, said Jeremy Anwyl, CEO of Edmunds.com.

"Consumers watching this ad campaign will be intrigued because of GM's bold statement of confidence in its vehicles," he said. "The risk that GM has in buyers returning its vehicles will be very minimal."

Lutz said the return rate is expected to be about 0.5 percent.

Lutz said there was no estimate on how much the offer might boost GM sales -- down 35.1 percent this year for a 19.5 percent market share, a two-point drop from last year. He also would not say how much GM is spending on the campaign.

In years past, GM has spent less on advertising relative to its market share, but not anymore, Lutz said.

"This is a big bet on the power of communication and a big bet on the power of effective advertising and shifting public perception," he said.

The money-back guarantee eliminates risk for consumers but GM needs to execute the ads in a way that doesn't make the automaker look desperate, said advertising expert Wes Brown of the Los Angeles-based consumer research firm Iceology.

Making the 67-year-old Whitacre the face of GM is risky and may alienate younger consumers regardless of whether he has ties to the old GM, Brown said.

"Who will that appeal to? Some 70-year-old person?" Brown said. "How many cars are they buying before the end of their life?"

Ads featuring auto executives have mixed records.

In the 1980s, former Chrysler Corp. Chairman Lee Iacocca succeeded with a plain-spoken approach and signature catch-phrase: "If you can find a better car, buy it."

Dieter Zetsche, former CEO of Chrysler Group parent DaimlerChrysler AG and former Chrysler CEO, starred in a short-lived Dr. Z campaign earlier this decade with mixed results. And starting in 2002, Ford Motor Co. featured then-Chairman and CEO Bill Ford Jr. in ads focusing on its cars and trucks and the Dearborn automaker's heritage, which generated relatively neutral reactions.

GM is not using Whitacre as a product pitchman, Lutz said.

They are only necessary, he said, "when you need style over substance and a cult of personality to overcome the weakness of a product. Let the product do the talking."

In the ads, Whitacre, former CEO of AT&T Inc., will be featured in a short introduction and tell consumers he had doubts when approached earlier this summer about leading GM out of bankruptcy court. Whitacre will say those doubts were overcome after learning about GM's lineup of cars and trucks, Lutz said.

Focus groups responded favorably to Whitacre's persona, Lutz said.

"He's tall, good looking, impeccable white hair, soft Texas drawl, limps a little bit -- sort of gives an old cowboy look," Lutz said. "He is just wonderful."

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