GM Seeks To Overcome Perceptions On The Coasts Beyond bankruptcy, General Motors has a significant problem in this country. It has to do with culture, demographics and perception. The automaker's market share continues to decline nationwide. But it really struggles on the coasts — with affluent and influential consumers. The company is determined to change that.
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GM Seeks To Overcome Perceptions On The Coasts

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GM Seeks To Overcome Perceptions On The Coasts

GM Seeks To Overcome Perceptions On The Coasts

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From NPR News this is ALL THINGS CONSIDERED. I'm Michele Norris.

If you're listening to us in your car right now, think about what make of car you're driving. And if it isn't an American brand, such as General Motors, well think about why. If you live on the coast in particular, GM cars do not sell very well. We start this hour with a story about why that is the case. Beyond bankruptcy, GM has a significant problem with affluent and influential consumers on the East and the West coast. It has to do with the culture, demographics and perception.

As NPR's Frank Langfitt reports, GM is determined to change that.

FRANK LANGFITT: To appreciate the challenges General Motors faces in trying to win new customers, come to a place like Bethesda, it's a suburb just outside of Washington, D.C. - quite wealthy. And this morning, I'm standing on a street corner just watching the cars go by. We have an Infiniti, a Toyota. Let's see here, there's a Honda, a Nissan, a Lexus, another Toyota. You know, if you stood here for a little while, you wouldn't even know General Motors existed. In reality, there are two U.S. auto markets. One is Middle America, places like the Great Lakes and the Plain states. There people prefer trucks and SUVs, where GM excels — and 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 to do.

Mr. SAM WEAVER (Part Owner, Chevy Chase Chevrolet): This is the original showroom from 1939.

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

Mr. WEAVER: The oldest one of the dealership has got to be this one that has the 1941 new Chevrolet banner.

LANGFITT: But today, the only Chevy's 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.

Mr. WEAVER: 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.

LANGFITT: 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.

Mr. WEAVER: 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.

LANGFITT: And the reason they don't want it is?

Mr. WEAVER: The perception that it's an entry-level vehicle that it just doesn't fit their personal image.

Mr. MARK LANEVE (Head of Marketing, GM): From a cachet standpoint on passenger cars, we lost market position. I know we're beginning to crawl back there.

LANGFITT: That's Mark LaNeve. He heads marketing for GM. LaNeve says General Motors has to improve its image, especially on the East and West Coasts.

Mr. LANEVE: 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.

LANGFITT: 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 the 2008 North American Car of the Year and a recommendation from Consumer Reports. Ed Peper oversees Chevrolet. He says the demographics of the Malibu are heading in the right direction.

Mr. ED PEPER (Head of Chevrolet, GM): Our average age is down on Malibu about five years, and our household income is, actually with Malibu, it's gone up $22,000, which is a lot at Chevy.

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

Mr. PEPER: We're cutting the gap, and it's great.

LANGFITT: But that gap looks more like a chasm. Last year, the Camry still outsold Malibu by nearly two and a half times. Lonnie Miller is director of industry analysis at R.L. Polk, the auto marketing firm. He says winning a new generation of customers will take time.

Mr. LONNIE MILLER (Director, Industry Analysis, R.L. Polk): Is it climbing Mount Everest? No. Is it climbing a smaller mountain in North America, like Mount Hood? You know, maybe they're, you know, better than halfway up the mountain. But really, it's going to be, will people give them a fair chance?

LANGFITT: But first, people have to be familiar with GM products. And in Bethesda, that's not always the case. I ran into Dennis Truskey(ph) in a parking lot there. He's a human resources professional and drives a Toyota Highlander Hybrid. So, I asked him do you know many GM models?

Mr. DENNIS TRUSKEY: I owned a Beretta at one time.

LANGFITT: Not good. GM canceled the Beretta in 1996. Like a lot of people on the coasts, Truskey says fuel efficiency really matters to him. But he's not sure what GM offers.

Mr. TRUSKEY: I know they have an electric car that they're working on. I can't recall the name of that vehicle.

LANGFITT: Actually, it's called the Volt and it's supposed to come out late next year. GM hopes it will change the company's gas-guzzling image and make people like Dennis Truskey give General Motors a second look.

Frank Langfitt, NPR News, Washington.

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