I want YOU to buy a new car!
By Eastan McNeal on March 31, 2009 at 3:10 PM in Current Affairs
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If GM fails it won’t be because Washington did not try to give it every advantage imaginable. One advantage, not withstanding the formidable Obama marketing machine’s vast resources, not easily attainable is consumer trust.
Following the first bailout last year several studies of consumer perceptions have been conducted. These studies’ results are now validated by the market data that has emerged. Keep in mind that GM and Chrysler took government money last year. Ford did not. |
A survey released this month (March 2009) by polling firm Rasmussen Reports found that 88 percent of Americans would prefer not to buy a car from an automaker receiving government aid. That’s worse than the 63 percent who said they would eschew buying from a bankrupt car company. Isn’t that the same percentage (88%) that think congress is doing a poor job?
According to CNW Marketing Research, which specializes in the auto industry, in the first two months of the year, the number of buyers considering a GM or Chrysler vehicle fell 12 percent and 33 percent, respectively,. At the same time, Ford saw a 12% increase in consideration.
Since the first congressional hearings on the auto industry in November, U.S. sales by GM and Chrysler have fallen a combined 45 percent compared with the year-earlier period. Taking federal money is keeping people away from their lots, these consumer surveys suggest.
“GM and Chrysler are sending out messages that are very definitely in conflict with each other,” said Kelly O’Keefe, a professor at Virginia Commonwealth University’s Brandcenter and the son of a former Chrysler executive. “On the one hand they’re saying they’re in trouble, and on the other they want consumers to keep buying. It’s a marketing nightmare.”
By comparison, Ford Motor Co. has seen its share of the retail car market rise for four consecutive months, the first time that’s happened in 14 years.
Are they making better cars? Are they offering more attractive deals? Are they conducting a brighter advertising campaign? Or are they benefiting from accidental PR brilliance?
The government can’t honestly bestow upon GM and Chrysler unfair advantages. If they allow sales tax deductions and if congress goes forth with their plan to grant up to a $5,000 stimulus rebate to new car buyers, those perks will have to be awarded to consumers without regard to the brand they select. Hello Tata! If just the big six automakers hit their 2007 mark of 16 million cars sold in the U.S. that is around $80 billion a year of new stimulus spending our country will have to borrow until Obama is gone.
Who will pay the taxes for this loan, if the world affords it to us? Will a charismatic Obama convince the kool-aide drinkers to only buy GM so his car company will succeed? I don’t know. What do you think.
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