GM Seeks To Overcome Perceptions On The Coasts

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Beyond bankruptcy, General Motors has a significant problem in this country. It has to do with culture, demographics and perception.

GM's market share continues to decline nationwide. But it really struggles on the East and West Coasts — with affluent and influential consumers. The company is determined to change that.

A visit to a street corner in Bethesda, Md., a wealthy suburb of Washington, D.C., shows the challenges GM faces in trying to win new customers. Watching cars go by, there's an Infiniti, a Toyota, a Honda, a Nissan, a Lexus, then another Toyota.

In reality, there are two U.S. auto markets. One is Middle America, places like the Great Lakes and the Plains states, where people prefer trucks and SUVs, where GM excels — and where more than half the vehicles on the road come from Detroit.

Then there are the coasts. Here, foreign brands like Honda and Toyota can account for up to 70 percent of sales.

GM says coastal markets are critical to its rebound. But — from the looks of things in Bethesda — the company has a lot of work ahead.

Sam Weaver began working at Chevy Chase Chevrolet washing cars as a teenager. Now a part owner, Weaver shows a reporter pictures from the old days.

"The oldest one of the dealership has got to be this one with the 1941 new Chevrolet banner," he says.

But today, the only Chevys at this dealership are in the black-and-white photos on the showroom wall.

Last month, Chevy Chase Chevrolet became Chevy Chase Nissan. Weaver says there was no other choice.

"The bottom line is Chevy makes a great car, but it's only great for the people that want to buy it. And the people in our market didn't want to buy it," he says.

Weaver says one reason it's hard to sell Chevys here is because of the brand's profile. People who live in Bethesda — doctors, lawyers, U.S. senators — just don't see the Chevy logo as a status symbol.

"Somebody in the influential area that we're in does not necessarily want a Chevrolet bow tie sitting in their driveway next to their Mercedes," Weaver says. He says there's a perception that Chevy is an entry-level vehicle. "It doesn't fit their personal image," he says.

Mark LaNeve, who heads marketing for GM, says: "From a cachet standpoint on passenger cars, we lost market position. I know we're beginning to crawl back there."

LaNeve says General Motors has to improve its image, especially on the East and West Coasts.

"A, they're big markets — New York, California, D.C., Florida — huge vehicle markets. B, they're trendsetting markets, they're youthful markets, they're diverse markets. Those are all important to our future growth," he says.

LaNeve says GM is making inroads with vehicles like the Malibu sedan. Unlike an earlier, boxy version, this one looks sleek and sophisticated. And it wins awards, like 2008 North American Car of the Year, and a recommendation from Consumer Reports.

Ed Peper, who heads Chevrolet for GM, says the demographics of the Malibu are heading in the right direction.

"Our average age is down on Malibu about five years, and our household income ... with Malibu has gone up $22,000, which is a lot at Chevy," he says.

More importantly, Peper says the sedan is gaining against tough competitors like the Toyota Camry.

"We're cutting the gap, and it's great," he says.

But that gap looks more like a chasm. Last year, the Camry still outsold Malibu by nearly two and a half times.

Lonnie Miller, director of industry analysis at R.L. Polk, the auto marketing firm, says winning a new generation of customers will take time.

"Is it climbing Mount Everest? No. Is it climbing a smaller mountain in North America, like Mount Hood? Maybe. They're better than halfway up the mountain, but really it's: Will people give them a fair chance?" Miller says.

But first, people have to be familiar with GM products. And in Bethesda, that's not always the case.

Dennis Truskey, a human resources professional, drives a Toyota Highlander Hybrid.

Asked if he knows any GM models, he replies: "I owned a Beretta at one time."

GM cancelled the Beretta in 1996.

Like a lot of people on the coasts, Truskey says fuel efficiency is a top priority. But he's not sure what GM offers.

"I know they have an electric car that they're working on. I can't recall the name of that vehicle," he says.

Actually, it's called the Volt, which is scheduled to come out late next year. GM hopes it will change the company's gas-guzzling image — and that it will make people like Truskey give GM a second look.



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