GM Mulls a New York Showroom to Woo Wall Street

Posted by: David Welch on June 28, 2010

General Motors realizes it has a nagging little marketing problem as it prepares for an initial public stock offering. The analysts, portfolio managers and potential investors that they are hoping will like their stock aren’t big customers of the company’s cars. So GM is mulling over a plan to open up a GM salon in Manhattan, say three people who know about the discussions. The company would rent or buy a building, outfit it with imagery for its four brands and showcase the latest cars. The idea is to get GM’s best models in a place where high-fashion New Yorkers, tourists and high-rolling investors might walk by. GM does poorly in the New York metro area. GM’s market share in the New York area was just 9.6% in the first quarter, compared with 18.7% in the U.S. GM’s share in the New York area was 10% last year, down from 13% in 2008, according to Experian Automotive, which tracks vehicle registrations.

GM thinks that the salon would show investors and car buyers that the company’s newest models are competitive. Audi has a similar display called the Audi Forum at the corner of 47th Street and Park Avenue. Audi keeps five cars on hand, including a vintage Le Mans series race car. Audi has events at the Forum. They even kept it open so Audiphiles could watch the entire 24 Hours at Le Mans race last year.

For GM, this does create a bit of a dilemma. GM wants to get in front of the hip and the well-heeled. But is this the right way to do it? The Forum works for Audi because it’s a house for just one brand. There is nary a Volkswagen in sight. GM would have four brands together at a time when the company is trying to give Buick, Cadillac, Chevrolet and GMC some individuality.

That isn’t what’s stopping GM. Executives say they like the idea of a company showroom in the Big Apple. But Manhattan real estate is really pricey. For a company perceived by some to be on the dole—and that took some heat for giving a Corvette to near-perfect Detroit Tigers pitcher Armando Galarraga—a Manhattan marketing scheme could draw heat. GM should pay no mind. The bigger question is whether GM could differentiate its brands with this, and any other companywide marketing strategy.

Reader Comments

Frank A NYC

June 28, 2010 2:45 PM

Instead of having a showroom, they should host a outdoor party(ies) to showcase the brands (except GMC). As a native NYer I just don't see NYers going for trucks. This would be cheaper than paying for an ongoing showroom. They should include fine art, and other high end products. My suggestion is to use Bryant park and include the following cars only, CTS (all 3 models), SRX, Buick Lacrosse, Enclave, Regal. Chevrolet Malibu, Volt, Camaro, Vette and Traverse. Yes I purposely left out the Cruz, have you seen it?

Henrey

June 28, 2010 2:56 PM

GM will have about 500 to 620 Million shares outstanding, when it IPOs and that with all warrants. Everyone will not sell on the first day and the Govt will sell only a portion of its shares. GM shares will sell because the supply of shares will be very low and demand worldwide will be greater. A small city in China could buy 5% of GM and not blink. GM should not waste its money setting up a Manhattan marketing scheme, instead it should work to increase production of hot selling models like Equinox,SRX,Lacrosse,Full size SUVs and Heavy Duty trucks. It should not concentrate on selling it shares in one market but instead market them on a global plan, which must include China.

ps

June 28, 2010 9:01 PM

Lets face it, it will take GM a long long time to strengthen its presence in places like NY, San Fran, etc. Many people in NY think undependable gas pigs or boring econoboxes like the Cavalier when they think GM, which is the fault of, well, GM. While it's no longer the case, they should stay on their A game and keep the engineers and designers in the drivers seat and it may pay off. an expensive showroom changes nothing.

zipcanada

June 29, 2010 1:04 AM

There is good reason for the 9% market share. GM should conserve its cash. Saab had some chance in NYC but now the mark is history.

Craig

June 29, 2010 3:31 PM

GM should have a factory store in NYC. BMW, Mercedes and now VW/Audi just opened a corporate store. It is a heavy traffic area where everyone shops for cars. Also GM should get Ray Catena to buy a Cadillac store in the NJ and Westchester area as Ray Catena is the place to buy a luxury car in the NY area. This would bring instant credibility.

Robert C

June 30, 2010 8:05 PM

In the Buffalo area (thats still in New York State to all of you folks) GM has around a 60% market share according to my brother who lives in Erie County. Yes it does not mean a hill of beans. I live here in Rockland County which is about 33 driving miles to the GW Bridge for me. Anyway here is a good nugget for all of you: IF my memory serves me correctly there were 4 Chevy, 1 Pontiac, 2 Oldsmobile, 2 Buick and 1 Cadillac dealerships here in 1979, They were spread all over the county. There is now only one GM dealership here in Nanuet. That in a nutshell is the state of GM in the NY area. For the record I drive GMC Suburban

emu boots

July 5, 2010 4:38 AM

The bigger question is whether GM could differentiate its brands with this, and any other companywide marketing strategy.

Jack

July 6, 2010 5:02 AM

Volvo is planning to boost marketing in China..... i think GM and other car makers should think in same way...... with many of developing countries coming up with higher demands, companies with a bigger brand should think of opening showrooms there .........

Post a comment

 

About

Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

BW Mall - Sponsored Links

Buy a link now!