As an American taxpayer, I have unexpectedly become an investor in your company, so I thought I would give you a pep talk. I’m not interested in dissecting the finer points of labor contracts, quality control, uninspired design, or limited innovation. (OnStar is very cool, but what else have you done for us lately?) The case against you is monumental, but you know what intrigues me? You’re still in business! You should have been dead a decade ago. Yet something has kept you from running out of gas and it isn’t your J.D. Power ratings.
Here’s my theory: Despite your worst efforts to destroy them, the core strength of your brands is keeping you from disappearing altogether.
I confess, I am old enough to remember when you approached 60% market share in the U.S. Things were running pretty smoothly in the ‘70’s, weren’t they? What you had then, and what you still have some left of now, was Suburbanloads of brand equity.
Proof of this is as simple as asking one of your pick-up truck owners what the chances are he would switch to Ford. I couldn’t for the life of me tell you what the real difference is between a Ford pick up truck and its Chevy counterpart. But anyone can tell you there is a huge brand loyalty factor for each. Buick owners love their cars (and Buick models actually do well in quality surveys). Pontiac owns a niche in the affordable performance market and Cadillac’s resurgence has been one of your greatest recent success stories. You bet too heavily on SUVs ($4 gas, who knew?), but your brands in those categories have many devoted followers.
So here’s what to do next:
Be less general and more specific: In 1975, you controlled the car category, mass marketing was still king, and the strong dollar kept imports at bay. It’s safe to say a few things have changed since then. Today’s car buyers have so many good choices that your offerings need to have clearer points of difference from each other. You’re offering four-door sedans under half a dozen brand names and dominating with none. Focus on your strongest models and please catch up on the energy efficiency segment.
Tap into your brands’ equity: Start with getting Chevy aimed back at middle America, then embrace that Buick appeals to a more mature audience and design those cars for the aging boomer market. Chevrolet is as American as a brand can be. (Baseball, hotdogs, apple pie and… ) You must know this, but you aren’t getting traction. There is a huge marketplace out there that wants permission to buy Chevy again. But the products have to deal with the realities of gas mileage and reliability. I love that you’re bringing back the Camaro. The HHR is a stylish answer to the imports and a way around mini-van stigma. The Volt might just be real innovation, but you still need to fill some holes in a line-up that Americans can trust.
Get rid of your misfits, like Hummer and Saab: Hummer will probably survive as a niche brand, but is about as politically incorrect as a SUV/pseudo-military vehicle could be right now. Saab is like the grapefruit in a fruit salad. Sure it adds diversity to your product line, but nobody really likes it in there. You didn’t make those brands better and they didn’t make you better.
Remember that the brand experience lasts as long as we own the car: A car that is still running strong after the last payment is made will help you create more long-term customers. (Remember them?) And a car owner that gets friendly and reasonably-priced service at the dealer will be more loyal as well. Invest a little of the money we lent you in that. It will pay off in brand loyalty and repeat sales.
Stand by your brands: One of the keys to the resurgence of the Chrysler brand under Lee Iacocca was the extended warranties they offered free with every new car. You could do this even with the cloud you’re under right now by funding a warranty program as a separate entity, if necessary. Better warranties could be the last step you need to reestablish the trust your brands once enjoyed.
Hey, I know you’ve got a lot of problems to solve, but I believe you can solve them as long as you also restore your brand equities. General Motors may come out of this a little less general and a little more specific, but that might just put the luster back on the parent brand as well. After all, we do want our money back some day.