automotive

Report: GM Can Rebound With Right Products

GMAutomotive consultancy AutoPacific says that GM can transcend bankruptcy and maybe even rebuild consumer confidence in the GM nameplate. But it can only do so with the right products.

The Tustin, Calif.-based firm says that GM can recover from negative publicity and "perceptions of mismanagement, not making the right vehicles for today, and using taxpayer money," per the firm's latest "Rumor Roundup" report, a monthly take on the industry. "In the end, product is king, and GM's latest and upcoming products are their best ever."

But clearly, bankruptcy has put a hurt on consumer confidence about the brand, judging from the firm's own survey fielded in early June. Fifty-seven percent of respondents said they were concerned about buying from GM, versus 6% for Toyota, 7% for Honda and Nissan, 9% for Hyundai and 10% for Ford. General Motors, however, was second to Chrysler, which 62% of the survey's respondents were concerned about.

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In the survey, 67% of respondents said management was the principal problem for GM. And over half said capitalism should have been allowed to run its course and that GM should have been allowed to fail. Forty-eight percent said they were angry that GM got taxpayer funds. Only 16% had any confidence that GM and Chrysler will come out of bankruptcy even when the economy recovers.

Daniel Hall, vice president of the company, says that the surveys were both taken just after the Chrysler bankruptcy announcement. "It definitely reflects what people are hearing in the press. I suspect this reaction will wane over time," he says.

A separate AutoPacific survey asked consumers -- on a scale of 1 to 5 -- how strongly they felt that the credit crisis has been the primary cause of automakers' problems. About 50% disagreed -- 25% strongly -- that the credit crisis was an influence on automaker problems.

Only 6% felt strongly that the credit crisis was the primary cause of Detroit's crisis. "That is striking, considering that homes and automobiles are the two products in life most associated with financing," says Hall. "To me, that was a big surprise; quite frankly, the auto business was doing well -- all things considered -- until the financial crisis hit."

As for specific GM brands, AutoPacific says Chevrolet must be a technically advanced brand with something on the dash that can compete with integrated communications systems like Ford's Sync. Chevrolet's survival also depends on its global viability, and that depends on Chevrolet getting a wide range of smaller cars, crossovers and multi-passenger vehicles.

Still, says AutoPacific, the brand must also have a so-called "halo" vehicle -- a sporty car that dealers can park on the grass to lure customers. Until now, Corvette has had that role, but AutoPacific says Chevrolet's new Camaro is more important as a "halo" vehicle because it is more attainable and versatile.

"Corvette is its own brand, says Hall, "and the Camaro is new and joins efficiency with performance, so it tells a new story." And, he adds, it resurrects the type of vehicle that can compete with Ford's own icon, Mustang. "Mustang has been around since '64, so this return of Camaro is an opportunity for GM to show they can make their own iconic vehicle that gets good fuel economy, performs well and looks great."

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