GM's inspired Chevy money-back guarantee
Other automakers will no doubt come up with similar programs.
By Jonathan Berr Jul 10, 2012 2:36PM
General Motors' (GM) idea to offer money-back guarantees to buyers of its flagship Chevrolet brand is a stroke of genius.
It sends the right message -- "we stand buy our products" -- at the right time, when consumers looking to buy new vehicles are probably increasingly nervous about their economic futures. Chevrolet buyers can get refunds if they return their vehicles for any reason within 60 days of purchase. The offer expires Sept. 4.
The marketing move comes as GM's sales are surging. June sales climbed 16%, thanks in part to the popularity of Chevrolet models -- sales of the Malibu were up 32%.
Chevrolet sales rose 6% during the first half of the year, below the overall rate for the industry. They should have been stronger, especially since Chevrolet, which accounts for more than 73% of GM's sales, is making good cars. Consider what Edmunds.com said about the 2013 Malibu: "The fully redesigned 2013 Chevrolet Malibu, . . . with its added refinement, feature content and efficiency, finally becomes a top-tier model." U.S. News and World Report called the 2012 Chevrolet Cruze the "Best Compact Car For The Money."
Chevrolet sales rose 6% during the first half of the year, below the overall rate for the industry. They should have been stronger, especially since Chevrolet, which accounts for more than 73% of GM's sales, is making good cars. Consider what Edmunds.com said about the 2013 Malibu: "The fully redesigned 2013 Chevrolet Malibu, . . . with its added refinement, feature content and efficiency, finally becomes a top-tier model." U.S. News and World Report called the 2012 Chevrolet Cruze the "Best Compact Car For The Money."
Shares of GM, which have barely moved this year, traded down more than 1.5% in early afternoon trading because of investors' concerns that a slowing economy will affect vehicle sales. The average 52-week price target on the stock is $32.40, more than 60% above where it recently traded.
Offering money-back guarantees is not a new idea. As The Associated Press notes, GM made a similar offer in 2009 when it exited bankruptcy. Hyundai went a step further by letting customers return cars within a year if they lost their jobs.
All of the automakers should adopt similar policies, with some sensible limits. Buying a car is a stressful experience. If a company can make the process a little easier on consumers, maybe those who are hesitant to incur thousands of dollars in debt -- on an asset that depreciates as soon as it leaves the dealer lot -- will be more inclined to make a purchase.
All of the automakers should adopt similar policies, with some sensible limits. Buying a car is a stressful experience. If a company can make the process a little easier on consumers, maybe those who are hesitant to incur thousands of dollars in debt -- on an asset that depreciates as soon as it leaves the dealer lot -- will be more inclined to make a purchase.
GM's Chevrolet deal underscores the fact that the company stands by its products, though it's kind of sad that the automaker needs to emphasize a point that should be a given.
Jonathan Berr does not own shares of the listed companies. Follow him on Twitter@jdberr.
| Tags: | automotivegm |
12Comments
Jul 10, 2012 11:48PM
Yeah - this is a great idea when money is no obstacle. You can do this when you screw the bond holders over the union bosses in bankruptcy and take $25 billion dollars from the US tax payers that hasn't been paid back. How hard is that to do. Seems this may be difficult for Ford to do since they didn't take any tax payer money as a bailout..
Jul 10, 2012 6:11PM
I think this article is a little misleading...how about mentioning how much of that June percentage increase was due to governmental sales (Chevy Malibu anyone...government vehicle poster child)?? Hmm...the American public would be happy to know that their bailout money was used to buy government vehicles...keep the record spinning MSN!! No wonder conservative sites are killing y'all in ratings!!!
Jul 11, 2012 6:30AM
Jul 10, 2012 4:39PM
Jul 13, 2012 10:33AM
Jul 14, 2012 6:27PM
In 20 years, I've always driven Chevy, but will NEVER own a GM again! Avoid GM and especially Global Auto Mall! GM and their dealers, especially Global Auto Mall in North Plainfield, NJ are crooked! Long story short, when I refuse $2700 in out of pocket suggestions from Global, my 1.8 hr mandatory steering system safety recall took 3 days. Days later the steering was inoperable, I returned to Global only to have their Service Mgr repeatedly tell me that they didn't damage my hoses as the steering hoses aren't attached to the steering system. I kid you not! He also tried to claim it was a slow leak that built up over a year despite their technicians missing it while making $2700 suggestions. GM themselves directly refused to help since Global wouldn't return there calls and I had to have the repairs to Global Auto Mall's screw up repaired at a private shop at great cost to me personally. Forget GM!! NEVER AGAIN!
Jul 11, 2012 7:29AM
Jul 10, 2012 4:12PM
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