General Motors Co. (GM:US), seeking to clear out end-of-model-year vehicles, said it will offer no-haggle pricing on 2012 Chevrolet cars and trucks plus a money-back guarantee on all new Chevys as the brand loses ground to Toyota.
The promotions begin today at participating dealers and run through Sept. 4, Jim Cain, a GM spokesman, said. The 60-day, money-back guarantee, dubbed Love it or Return it, applies to all 2012 and 2013 Chevrolets, the company said today in a statement. The no-haggle program pledges to offer 2012 vehicles at the “best possible prices” in addition to current incentives, the company said in the statement.
Such programs are “marginally effective,” Dennis Virag, president of Automotive Consulting Group based in Ann Arbor, Michigan, said today in a telephone interview. “There will be some buyers, but I don’t think it’s going to attract a large number of new customers for Chevy.”
GM is trying to boost Chevy as the brand faces greater pressure from Toyota Motor Corp. (7203) as its U.S. sales recover from inventory shortages last year. U.S. sales of Chevrolet, GM’s largest brand, rose 6.3 percent to 961,662 cars and light trucks in the first half, a slower pace than the industrywide increase of 15 percent, according to researcher Autodata Corp. Toyota’s namesake brand gained 29 percent to 937,964.
Ford Motor Co. (F:US)’s flagship brand was No. 1 in the U.S. during the first half at 1.1 million light vehicles, according to Autodata.
Sales of the Cruze compact, Chevy’s main small car, fell 7.4 percent in the first half while deliveries of Malibu mid- sized sedans rose 15 percent. The model year is ending as Chevrolet is introducing the new Spark subcompact and redesigned Malibu.
Chief Executive Officer Dan Akerson, who oversaw GM regaining its title of world’s largest automaker last year and posting a record full-year profit of $9.19 billion, is pushing the company to boost operating margins and strengthen Cadillac and Chevrolet as global brands.
GM slid 2.1 percent to $19.80 at the close in New York.
Rebecca Lindland, an industry analyst with IHS Automotive, said the new promotions, which GM calls its Chevy Confidence program, address two things car shoppers dread: haggling and commitment.
“Americans aren’t great at haggling and we are expected to do so on the two biggest purchases we face: real estate and autos,” she said today in an e-mail. “This Chevrolet Confidence program alleviates the issue of haggling and eliminates ‘buyer’s remorse.’”
The no-haggle sales price, called Total Confidence Pricing, and the return policy harken back to previous sales programs offered by GM. The company’s Saturn included no-haggle buying before the brand ended as part of GM’s bankruptcy reorganization in 2009.
After exiting bankruptcy, GM offered a similar 60-day, money-back guarantee for its vehicles in a campaign dubbed May the Best Car Win, which included an appearance in television advertisements by then-Chairman Ed Whitacre.
The number of vehicles returned during that program represented less than 1 percent of sales, GM’s Cain said in a telephone interview.
Akerson won’t appear in ads for the new campaign, which will include television spots during tonight’s Major League Baseball All-Star Game and the Summer Olympics, GM said.
The Love it or Return it campaign covers autos that are financed or bought for cash and excludes leased vehicles, Cain said. The vehicle must have no more than 4,000 miles and the buyer can’t be behind on payments.
“We have transformed the Chevrolet lineup, so there is no better time than now to reach out to new customers with a satisfaction guarantee and very attractive, bottom line pricing,” Chris Perry, Chevrolet’s vice president of marketing, said in GM’s statement.
Chrysler Group LLC separately said today that it’s returning to a previous incentive program to boost sales this month. The company said it will let buyers put off monthly payments for the first 90 days in a national promotion that applies to all of its vehicles.
The offer runs through the end of the month, according to Auburn Hills, Michigan-based Chrysler’s website. The deal is similar to an incentive that helped boost Chrysler’s May deliveries by 30 percent from a year earlier. Chrysler is controlled by Fiat SpA. (F)
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