Seriously now, let's look at this thing in perspective......

The automotive consumer market is VERY segmented. There are hundreds of different types of products, serving dozens of different consumer based wants and needs. There is no Holy Grail product that meets the needs of everyone in the market. The types of consumers in the market range along these lines...

"I want inexpensive transportation with great fuel economy" They weren't ever gonna look at the vehicles GM includes in this promotion and the gas card isn't gonna change that. there might be a few people in this newsgroup that fit this description, but those willing to pay for the hybrid option tend to be less price conscious than this group.

"I want the, best fuel economy I can get with little or no deterioration in performance" They weren't ever gonna look at the vehicles GM includes in this promotion and the gas card isn't gonna change that. If my assessment is accurate, many of the people who frequent this newsgroup fall into this grouping. GM's approach to this group of people is to offer hybrids in key market segments where GM has a history of providing segment leading products.

"I care about the environment and I need a vehicle that does what I need it to do with minimal impact on the environment" Most people in this group wouldn't normally look at the vehicles in this promotion, though some will take into account the FlexFuel applications. It's still probably too early for this to have a significant impact, though, because FlexFuel is not readily available in California. But all indications are that availability will increase fairly quickly, so for some, this may be an attractive idea.

"I need a vehicle that can transport me and my family. It has to have adequate performance and it has to have very good fuel economy" Here's where the promotion starts to make sense. Most people don't realize that GM's V6 equipped mid-sized and large sedans are very competitive with Toyota, Honda, and Nissan mid-sized sedans wrt fuel economy and performance. Add the FlexFuel option at no additional cost and it gets a little more interesting. Add the "guaranteed gas price" promotion and people who thought they would have to sacrifice and move down a vehicle size find that they don't have to. Probably doesn't fit too many people on this newsgroup, but maybe a few. This is the gravy in the promotion. This could net some conquest sales of people who might not have considered a GM sedan.

"I need a vehicle that fits my lifestyle, transports my family, and does ocassional towing and hauling" These people will love this promotion, because they get reduced gas prices for a vehicle they were gonna buy or lease anyway. This is called protecting your home turf. I'd be shocked if there are two of this type person on this board.

"I need a vehicle that fits my lifestyle, transports my family, and does ocassional towing and hauling, but I'm considering compromising to a lesser vehicle because I'm concerned about fuel prices" This one lands in the sweet spot of the promotion. This is the group of people who were already wanting to purchase an SUV, but have concerns because of the fluctuating price of fuel. They may have even considered trading in an SUV for a sedan. More than likely a non-GM sedan. With this plan, they no longer have to make a compromise. And for those still motivated to compromise and exit the SUV market for a sedan, there are sedans with segment leading fuel economy and FlexFuel option that also offer this promotion.


Marketing has done their homework, but it is not surprising that som many of you on this newsgroup hate the promotion. It does absolutely nothing for your demographic.

Peace,

Martin

 

It's not that I hate or like this promotion. I just think it complete misses the boat and is another short term fix from GM. I am not saying they should stop making these vehicles. Far from it. I have zero issues with someone who choses to drive a Hummber or any other large SUV. People are free to spend their hard earned money however they choose fit. Thats what makes the world go round.

But to me GM is going to ultimately put themselves into bankruptcy if they continue to inflate their sales with rebates, and gimick promotions.

Supplementing the gas prices is a very short sited way to keep sales up. With this promotion GM gives the impression that rather than adapt to the changing market needs, they would rather pay off it's customers until the market comes back to them (reduced fuel prices).

At least that is my perception, right or wrong.

 

Thanks Martin.

The Sales Call Objection Management features of GM's CRM look pretty impressive.

Confuse and Conquer !

 

Seriously now.... understand that most or many of us here own hybrids partially because of a concern for the environment and a concern for dependency on foreign oil. The 'high' fuel prices will cause many people to look away from the segment of vehicles featured in this promotion and look at vehicles such as the Toyota Rav 4, Chevy Equinox, CR-V, Ford Escape, etc... which still fit their lifestyle and also are better for the environment and the nation. Now those very same buyers can jump right back into another large SUV and not worry about fuel prices. I'm not questioning the marketing strategy, just the ethics and impact on the environment.

 

GM needs short-term solutions to boost sales, so their long-term solutions, whatever they may be, can take effect.

Martin: Great posts.

 

At this time, GM is still the world's largest automaker.

Common sense tells me they had to offer a full range of vehicles to do this.

This along with other actions, makes GM seem like they are a niche' automaker specializing in large SUVs and trucks. Consumer Reports indicates that this market share is declining - I guess there is a secret plan for GM SUVs to wipeout the Toyota Highlander Hybrid, etc....

Somehow, Pontiac, Buick, Saab will thrive even if the marketing focus is away from them?

Can GM be a niche' automaker and still be the biggest, or even in the top three in the long run?

I have not read Dilbert in awhile: I need to go back to it so I can understand how The Pointy-Haired Boss can use the magical power of wishful thinking to overcome physics and sound business practices.

 

The first thing that struck my mind is that for the first time ever, this is actually a direct incentive to roll forward one's odometer! I'm somewhat amazed that GM is offering no cap to this, and/or no diminishing paybacks beyond a certain number of miles. It seems like that's just asking for people to cram in as many long road trips as they possibly can during the first year. Combine that with a huge spike in gas prices, say to an average $4/gallon, and this could cost GM a lot more than they bargained for. For example, if someone were to buy a Hummer that achieved 10mpg, and drive it 50,000 miles in one year, with gas at $4.50 a gallon for premium, GM would need to pay $11,200! Average will probably be more like 18,000 though, which would be $4000 -- still chump change compared to the $55,000 starting price for a Hummer H2. Some of the smaller SUVs though with lower starting prices and (probably) lower margins might end up costing them more out of this deal.

 

"Moving Forward" LOL!

 

What is the big deal; this is just a slightly tricky rebate?Toyota is rebating $2500 on V-8 Tundras in CA and $2000 on Sequoias in CA?
GM is just giving a rebate-not a very hefty rebate either. The Sequoia has absolutely nothing on the Tahoe or Suburban(I never think in terms of Tahoe;if I went that big might as well get the Suburban-same mpg more or less, but a lot more room.) .
GM makes money selling big vehicles. They are making them more fuel efficient, and they are making them capable of running on fuel that produces very little net C02, and very little Middle Eastern oil.
We need to push GM to get some of their Euro vehicles here-and build them here.The Zafira we talked about recently could be a perfect USA road trip vehicle, and it also gets great city mpg.It has quite a bit more interior room than a Prius, and we are about to drive 3000 miles in a Prius with 2 adults, a leggy 75lbs greyhound,a kitten, 2 MTBs, ice chest ,air mattress(one sleeps, one drives) several bags etc. Families are smaller, and full sized minivans get just 25mpg hy(and about 12 city). Folks rarely need full sized minivan size.
The Maxx actually is pretty well sized, but it doesn't have a 40 mpg(hy) diesel in it(or more importantly an honest 25mpg city engine).
GMs original "car" diesel got great mpg-honest 25-30 mpg in vehicles that usually got 15-18mpg. It was a bit of a catastrophe otherwise(the 350 diesel).We need GM's "good stuff".Heck, Honda traded some 3.5 v-6's for some GM diesels just a couple of years back!! I hope the diesel smog problems are solved quickly.I doubt that the Zafira actually beats a Prius in mpg, but the increased size would be a winner here.Thanks,Charlie

 

The sad thing is that it'll probably work in terms of buyer psychology, that they'll think that they'll save more by getting the "fixed" gas prices than through a conventional rebate.