July 11, 2012
Churnin’ and burnin’ in the Motor City.
By Peter M. De Lorenzo
(Posted 7/10, 8:00 p.m.) Detroit. Once upon a time there was a quaint ritual called a “shutdown” around these parts, which occurred when the auto companies would have a forced two-week mid-summer break. Everyone would plan his or her summers around it and even though the “shutdown” was a forced holiday – and a lot of people worked through it anyway – it grew to be somewhat welcome, depending on your view of the world back then. Obviously the gradual implosion of the domestic automobile industry put paid to all of that years ago, but then again every once in awhile I’m reminded that some things never change around here.
Example? I’ve railed against the discount mentality that was once pervasive in the various halls of marketing at the Detroit-based car companies from Day One of this publication. And I’ve repeatedly pounded the point home that this discount mentality only served to cheapen the images of the various brands that originated here, especially in the face of relentless competition from newly emboldened import competitors that smelled blood in the water.
As Detroit’s market share dwindled alarmingly in a hard-edged, downward diagonal line to oblivion, it became painfully obvious that the old-school way of churnin’ the cars and trucks out in order to keep the factories running only resulted in giant green fields of inventory piling up with nowhere to go but to The Land of Cash on the Hood.
It was an insidious, never-ending cycle that crippled the Detroit automakers and laid waste to their profitability. Not to mention destroying any brand equity and integrity that might have been accrued over the years in the process. It wasn’t a marketing strategy by any stretch of the imagination and there was no blue-sky rationale that could possibly justify it, because it was just flat-out crazy.
And now here we are, in mid-July of 2012, and I see evidence that we’re about to return to Crazy Town, thanks to the folks at GM marketing as they are apparently attempting to will the Chevrolet brand to greatness by way of a thinly-disguised and recycled Hyundai-esque marketing campaign.
Buyers can return any newly purchased 2012 or 2013 Chevrolet model (specific restrictions apply, of course) for up to 60 days if they’re unhappy, and they'll get a refund of the purchase price and the sales tax. Additionally, buyers of 2012 Chevrolet models will get something called “Total Confidence Pricing,” which basically allows everyone to acquire a new Chevrolet at the supplier discount, plus any other discounts such as rebates or low-interest financing. The offer ends Sept. 4.
Just another marketing jump-start to clear the decks of inventory before fall, right? No big deal, right? Well, it depends on how you look at it. Yes, rebates and deals are part of doing business for everyone these days. And I mean everyone. (Have you looked at the BMW deals lately?)
But in this case there’s a reason to dig deeper. Chevrolet has been underperforming the market. Dramatically so, in fact. In a fairly healthy market that’s up 15 percent, Chevrolet sales are up just 6 percent through last month. And this is after Chevrolet actually gained market share in the two previous sales years.
What’s wrong with this picture? Plenty.
Chevrolet has the best product lineup in their history, yes, even better than in GM’s heyday when the division was far and away the U.S. auto industry sales leader. And yet GM’s most important division is languishing behind the market.
I’m sure that the collective GM marketing mindset believes that a money-back guarantee and double-secret discounting is exactly what is needed to get consumers to notice just how good these new Chevrolets are. But they’re being optimistic at best and I don’t think that it will be nearly enough.
Why? The real problem here is that there’s a disconnect between what Chevrolet is putting on the road product-wise and the cumulative effectiveness of the “Chevy Runs Deep” ad campaign to date.
Chevrolet has fallen behind the prevailing winds in the market because of the wildly inconsistent messaging that has gone on with “Chevy Runs Deep.” Some of the spots are good, and others are just so-so or just not good enough. And Chevrolet’s dealer ad campaign, which mimics the tone of “The Office” TV show, is so flat, dreadful and devastatingly grim that it has to have hurt the division in the marketplace, big-time. (Sometimes being too clever can kill you in the ad biz and this dealer TV advertising is a perfect example of it.)
The bottom line is that Chevrolet is not getting it done in the trenches, and it shows in the decidedly tepid sales numbers.
But beyond that, this new incentivized marketing campaign for Chevrolet, no matter how well intentioned, is only going to reaffirm for a lot of consumers – people who are already pre-programmed to ignore the offerings from Detroit – that the only reason to consider Chevy is for The Deal.
Not for the executional brilliance of the Volt, not for the competitive goodness of the Cruze, not for the zippy fun of the Sonic, etc., etc. No, the only reason for consumers to look at Chevrolet for the next two months is because of The Deal.
And that’s not only more than too bad, it’s a blown opportunity that Chevrolet can ill-afford.
In other words, a giant bowl of Not Good.
And here I thought the bad old days of churnin’ and burnin’ in the Motor City were gone for good.
And that’s the High-Octane Truth for this week.