Posts Tagged ‘GM’

General Motors today released pricing details for the hotly-anticipated Chevrolet Volt. The extended-range electric vehicle will go on sale with a manufacturer’s suggested retail price of $40,280 (before $720 destination charge). A federal tax incentive of $7,500 drops the price to $32,780.

The Volt comes well-equipped with a standard navigation system, Bluetooth hands-free phone system, Bose premium audio, and 5 years of complimentary OnStar coverage. The only options will be chrome wheels, three premium paint colors, a rear park assist feature, and heated leather seats.

But how does the Volt stack up against the Nissan Leaf, its closest rival in the zero emissions race?

Nissan made waves earlier this year when they announced that the all-electric Leaf would be priced at $32,780. Factor in the $7,500 federal tax incentive and the effective price plummets to a very reasonable $25,280, which Nissan points out is comparable to a well-equipped Toyota Prius hybrid.

Compare the Leaf to the Volt, however, and you’ll find that the Chevy commands a stunning $7,500 price premium over the Nissan.

GM’s new vice president of US marketing, Joel Ewanick is quick to point out that the Volt has something the all-electric Nissan doesn’t: an onboard generator that runs on gasoline and that can keep the car moving for an additional 300 miles after the initial 40-mile all-electric range is depleted. ”No other automaker offers an electrically driven vehicle that can be your everyday driver, to take you wherever, whenever.”

And while the Leaf’s driving range of 70-120 miles may not make it as road-trip-worthy as the Volt, the Leaf is eligible for an additional $5,000 state tax incentive for California residents. This expands the Nissan’s price advantage to $12,500 in what is sure to be a critical sales market for electrically-driven cars.

Consumers will ultimately decide if range anxiety – their fear of running out of electricity before they can find a charging station – is worth the extra $7,500 to $12,500. As some EV enthusiasts have already pointed out, the price difference would cover a lot of rental cars for those times when 70-120 miles just isn’t enough.

It doesn’t get much more American than baseball and Chevrolet.

General Motors is trying out a new marketing tactic with a Chevy-branded exhibition version of Flick Baseball Pro.  The app is available for download on iPhone, iPad, and iPod Touch and allows users to play 3- or 9-inning games with “life-like control of pitching and hitting via the accelerometer.”

The automotive tie-in comes courtesy of the Chevy Dugout portion of the app, where players can learn more about Chevy vehicles, like the iconic Corvette or hot-selling Equinox.  Fans who enter the dugout can also enter for a chance to win a trip to the 2010 All Star game.

Yes, this Americana-laden promotion is a bit cheesy.  And yes, there is some schlepping of products involved.  But as far as marketing and advertising is concerned, GM may be on to a grand slam concept here.

The baseball fan wants a fun game to play.  The automaker wants exposure to an audience that’s receptive to its message.  When GM sponsors the app – which normally retails for $2.99 – both parties benefit from the transaction.

That’s a nice change from billboards and television commercials where viewers are frustrated by the distractions and advertisers are frustrated by the lack of attention paid to their messages.

And while sponsored content is not exactly new in the marketing world, GM is among the first to offer a sponsored app like this for the iPad.

The Detroit automaker was also clever to tie into social media with a feature by Plus+ that allows players to brag about their baseballs skills to friends on Facebook.  This makes it convenient for users to share and it increases the chance for the app to go viral and spread to a larger audience.

If this app succeeds, it’s likely that other advertisers will jump in with sponsored content of their own.  But hey: if you’re going to be advertised to, you might as well get something in return.

Ford Motor Company released first quarter results yesterday, posting profits of $2.1 billion.  CEO Alan Mulally predicted a “solid” year for the Detroit-based automaker, though CFO Lewis Booth warned of several challenges ahead.

“We’ve got a lot of new product launches, so you’ll see some launch expense and we do expect some headwinds from commodities,” he said.  Reminding reporters of the still fragile economy, Booth cautioned that the company will likely post more modest profits for the rest of the year.

The CFO’s comments are a reminder that although the car market is showing signs of improvement, the industry isn’t out of the woods yet.

Nonetheless, strong sales of the F-150 pickup truck and Fusion midsize sedan have encouraged Ford to charge ahead with a second quarter production plan that is five percent higher than the plan it released at the beginning of March.  The much-anticipated Fiesta subcompact will go on sale next month and the next-generation Focus compact will launch in early 2011, completing Ford’s dramatically-overhauled lineup.

“The most important thing Ford has done is invest heavily in new product during this down cycle,” noted Erich Merkle, president of Autoconomy LLC. “As we’re coming out, they’ve got all this new product coming out in just about every category.”

Mulally famously maxed out all of Ford’s credit lines in 2006 to finance a massive restructuring of the company.  The $23 billion it borrowed gave the automaker a cushion to develop new models and withstand losses during the recession.  Ford was the only domestic automaker to avoid a government bailout, though the debt load now puts the company at a competitive disadvantage to rivals, GM and Chrysler, who had their slates wiped clean in bankruptcy.

The lack of government intervention may be helping Ford from the standpoint of consumer sentiment, though.  The company’s market share is up to 17.4 percent from 14.7 percent a year ago, the largest rise since 1977.  Ford also notes that many new customers have defected from Toyota following the Japanese company’s global recall scandal.

“The landscape might become more competitive as Toyota fights its way back and GM launches a lot of new products,” notes Joe Phillippi of AutoTrends Consulting.  In line with Booth’s projections, he warns,“The first quarter could turn out to be their best.”

General Motors CEO, Ed Whitacre announced on Wednesday that the automaker had successfully repaid its $5.8 billion bailout loans, “in full, with interest, years ahead of schedule.”

Considering that the industrial giant was in bankruptcy mere months ago, you might be wondering: where in the world did GM get the money to repay its loans five years ahead of schedule?

In short, the $5.8 billion came from a $16.4 billion escrow fund set up by the federal government during GM’s bankruptcy proceedings.  Although it that may sound like GM simply moved taxpayer bailout money from one pocket to another, the answer is somewhat more complicated.

The escrow fund was created last year by President Obama’s automotive task force to safeguard the government’s $50 billion total investment in GM.  The team estimated how much money the company would need to continue operating profitably and alloted an additional $16.4 billion of operating capital in case the economy unexpectedly worsened.  An escrow account was used so that the government could keep strings attached to the money.

One string required that the Treasury had to be consulted before any funds were withdrawn.  Another required that any funds remaining after June 30 2010, had to be used to pay off the initial loan.

Before Whitacre’s announcement on Wednesday, the escrow fund still had $11.3 billion remaining.  $2.4 billion had been used for a prior loan payment and $2.7 billion had been used in the bankruptcy proceedings for automotive supplier and former GM spinoff, Delphi.

Investors see the early payoff as a sign that GM has confidence in its restructuring and in the improving automobile market.

The automaker had $22.8 billion in cash on hand at the close of 2009.  Even with $10 billion allocated to new product and threats posed by its under-performing Opel division in Europe, GM appears to be in good shape to weather the last of the economic storm.

What remains to be seen, however, is whether or not GM’s recovery and eventual IPO will be sufficient to pay back the government’s remaining investment, which resulted in a 60.8% equity stake in the reborn company.

At the very least, the General is $5.8 billion closer to shedding the “Government Motors” moniker.

GM is launching a new grassroots marketing campaign to reach out to minority groups across the country.  Dubbed ‘Ride and Drive,’ the campaign is designed to get people behind the wheel of GM vehicles without requiring a trip to the dealership.

Representatives from the company show up at places where large minority groups congregate and then let people look around and go for a spin at their leisure.  In some cases, GM is even offering incentives to take the cars out for a test drive.

The ride-and-drive events are so far being met with success.  A recent event had GM reps attend one of Detroit’s largest churches, the Hartford Memorial Baptist Church, after a Sunday service.  Parishioners were invited to test drive several Chevrolet, Buick, GMC, and Cadillac vehicles.  GM even went so far as to offer free inspections of child car seats by their own safety experts.

In an interview with the Detroit Free Press, Pastor Charles Adams explained that the event demonstrated GM’s commitment to minority causes.  He added, “We are encouraging our church members to take care of their community by buying locally. This is an ethical purpose that is beyond profit.”

At a similar event held in Los Angeles, the automaker reached out to the Korean-American community by showcasing the new Chevrolet Camaro, which was penned by Korean-born designer,  Sangyup Lee.  GM served up tasty Korean bar-b-que from a well known local food truck while patrons chatted with company representatives.

GM spokeswoman, Carolyn Normandin explained that the Ride and Drive events are, “helping to change the public’s perception of our brands,” and are giving people the chance to experience vehicles, “firsthand, on their own terms.”  Last week, Normandin hosted another event at a Detroit coffee shop where patrons were offered a $5 coffee card in exchange for spending a few minutes to sit inside the new Buick Lacrosse and learn about its key features and options.

GM’s Ride-and-Drive events are so far proving to be a great way to gain exposure to markets that are often difficult to reach through traditional advertisements.

Normandin notes, “We know some people have never been in GM products before, particularly for a division like Buick/GMC. We know one way to help people fall in love with our products is to get them into our products and get them exposed to it.”