Is Weak GM Model Lineup Behind Daewoo Name Change?

National Legal & Policy Center ^ | January 20, 2011 | Mark Modica

[jazusamo]

 

General Motors has announced that its Daewoo Group unit will now sell all of it vehicles under the Chevrolet name. The Korean Daewoo operation has suffered from falling sales and a reputation for shoddily built cars. So what is GM's answer to these challenges? Change the name!

The name change game has been played before when GMAC became Ally Financial. More recently, GM introduced the "all new" Chevy Sonic, which is an updated Aveo. This smoke and mirrors marketing philosophy will only take GM so far before the public asks, "Is this all GM has got?"

The Chevy brand has had less success than General Motors' Buick, Cadillac and GMAC brands. While Chevy sales were up 16% last year, a closer examination of the numbers unveils some less rosy indicators. It is essential to analyze the quality of the sales growth at Chevy when considering the state of GM, since Chevy is the bread and butter brand.

Low profit fleet sales at Chevy through November of last year topped 35% of sales. "The Truth About Cars" website reports that fleet sales of some Chevy models topped 50% for the year. Through November, actual retail market share fell from 18.6% to 16.8%. That is a huge drop that must be concerning to GM executives.

Renaming Daewoo will give Chevy increased sales figures to report, specifically overseas. The ploy gives one the sense that General Motors is on the verge of desperation when it comes to coming up with ideas for driving sales figures. GM CEO, Dan Akerson (in photo), recently acknowledged a drought of new models and analysts at UBS and Soleil Securities (two investment banks not making huge profits on the GM IPO) have pointed to weak product launch as a risk to GM share price. In addition, the fact that Akerson has touted the Chevy Volt as the future of GM shows how dire the situation is. Sales for the Volt are expected to be 10,000 in 2011 and not significantly higher for years. Compare that to the Ford Fusion which sold over 219,000 in 2010 and you realize how absurd it is to believe that the Volt will have any near term impact on GM's prospects for success. Especially since GM loses money on every Volt sold.

The quality and value of the vehicles offered by Chevy will be the key to success or failure. The problems that led to General Motors' bankruptcy were less than competitive vehicles, poor management and the costs of UAW overhangs. None of these factors have been removed by the bankruptcy. If GM is to have a successful turnaround, management should stop the smoke and mirrors ploys and focus on building higher quality vehicles that appeal to the mass market. They have been given billions of taxpayer dollars to buy them enough time to accomplish this. The time frame, however, is not indefinite and they should change course immediately.

Mark Modica is an NLPC Associate Fellow.

[jazusamo]

Looks like GM's big shots are determined to go bust and take our tax dollars with them.

[HonkyTonkMan]

Chevy Sonic, powered by Route44 Lime-Aid

[jazusamo]

Please bump the Freepathon and donate or become a monthly donor!

[GeronL]

They got a federal bailout and a tax break on tens of billions in revenue.

Who knew that welfare makes you lazy?

//sarcasm

No more bailouts.

[Brett66]

If GM is to have a successful turnaround, management should stop the smoke and mirrors ploys and focus on building higher quality vehicles that appeal to the mass market.

They need to go bankrupt, break the union contracts and show them the door, then they can get to the building quality vehicles phase.

[Huck]

Daiwoo needed...correcting. So I...corrected them.

[jazusamo]

Agreed, that’s exactly what they need to do.

[Happy Rain]

The only way Obama Motors (GM) is going to make money is if they start building Fords.
No patriot buys a Chrysler or Chevy as long as they are in the socialist hands of Obama and the UAW.

[bill1952]

Geo Metro

[Pollster1]

From the article:

before the public asks, "Is this all GM has got?"

and from your post:

They need to go bankrupt, break the union contracts and show them the door, then they can get to the building quality vehicles phase.

I am not going to ask if this is "all GM has got", nor do I care if they will ever start building quality vehicles. I want them to go bankrupt and sell off their assets to reputable companies. I will never again buy any GM vehicle under any nameplate, past, present, or future. That company is permanently dead to me as a result of the corrupt bailout. I don't deal with crooks, and GM is with Chrysler under a permanent personal boycott because of the manner in which the company's assets were stolen from the rightful claimants under bankruptcy law. I will not be a contributor to any profits that the current GM "shareholders" may receive from their (legalized but still corrupt) grand theft.

[Alex Murphy]

General Motors has announced that its Daewoo Group unit will now sell all of it vehicles under the Chevrolet name. The Korean Daewoo operation has suffered from falling sales and a reputation for shoddily built cars. So what is GM's answer to these challenges? Change the name!

Who else thinks the next step is GM transferring existing production/assembly of "American" car lines to Daewoo?

[ken21]

how ‘bout the obama-dawoowoo model?

[jazusamo]

*grin*

or the moochel-dawoowoo.

[antiRepublicrat]

Who would have thought that “Make better cars” would be the last strategy considered for increasing car sales?

[truth_seeker]

There is a dilemna, as to which is the better brand image?

Daewoo, or Chevy?

Neither?

A far better managed company named Toyota has added brands over the last 22 years, namely Lexus, Scion and possibly Prius.

During that period GM killed Oldsmobile, Saturn and Pontiac.

Which knows how to manage brands?

Does quality impact image?

At GM the old owners of Oldsmobile were dying, and the products were becoming more stale. SWo GM just killed the brands.

Toyota however knew that Camry might not turn on younger people, but Scions could do so.

So GM has no pupose-crafted brand for young people and Toyota does.

GM remains a poorly managed company.

[longtermmemmory]

the next step is force people to buy a GM.

or they will “incentive” people to buy a GM or else.

its for the children.

[reagan_fanatic]

Outside of the Camaro, GM’s lineup is pathetic, and no match for Ford, who has one of the best offerings of vehicles in their history.

GM will only stay alive as long as the government has its teat out for it to suck on.

[count-your-change]

Quiet everyone!! The man in the picture is thinking great thoughts.
“Shall we call the Chevy model the Daewoo or the Woohoo, Boohoo? No. Let’s combine Daewoo and Volt...The Dolt!!”

[jazusamo]

Good post.

In my younger years I owned two different year Olds’ and they were good cars. In latter years I’ve owned two different year Camry’s and they were better cars.

Like you say they don’t appeal to the younger crowd. In fact the new one we have was rated as the average everyday car that doesn’t handle and accelerate like the sportier models. Guess what, that’s what I want if it last us 12 years like the last one did without major repairs. It has all the comforts we want and some supposedly “must haves” that we don’t even use.

As companies go GM has lost it. Ford seems to be doing very well but I’ve only owned their pickups. Toyota was hurt by the bad publicity in the last couple years but that’s supposedly been taken care of, I know I’m not afraid of it.

[jazusamo]

I’m afraid you’re right about GM only staying alive as long as we dole it out to them and I’m against keeping those UAW workers on the teat.