At least there heading the right direction.
=================
February 7, 2000
BY JUSTIN HYDE (ASSOCIATED PRESS)
When G. Richard Wagoner Jr. assumes the job of CEO of General Motors Corp.
on June 1, he will be the youngest chief executive ever at GM, running the
world's largest automaker at age 47. But whether he can keep the company in
good health will depend in part on improving GM's standing among consumers
half his age. With rivals hustling harder for younger buyers,
Wagoner will have to show that GM can compete profitably for those consumers
and keep bringing them back as they grow older.
"I think it's critical that we engage that group, "Wagoner said Friday.
"History has shown that when you get a buyer into
your family and treat them well, it's easier to keep them than to attract
someone new.
"We've got to focus on products that meet their needs. The challenge has
been getting something that's eye catching ... at a price point that they
want to pay." The average American car buyer is in their early 50s, the time
of life when many Americans are able to afford new vehicles more often.
While GM remains strong with older buyers, research from The Polk Co. shows
that the vehicle lines with the most pull with buyers under the age of 35
are imports -- namely makes such as Isuzu, Honda and Volkswagen. (comment:
Unlikely when you find that the torque is never there.)
While Chevrolet, Pontiac and Saturn sell about one-fifth of their vehicles
to customers under 35, the number drops precipitously for other GM vehicle
lines, Polk found. Karen Piurkowski,
director of loyalty with Polk, said buyers in the age range from 23 to 35,
commonly labeled Generation X, tend to consider foreign manufacturers more
than their predecessors. (comment: I can understand this since 3x owner of
Chevy, fit-n-finish sucks!)
"GM has a big challenge ahead of them as people move up through these
population segments," she said. "It's not as natural for (Generation X
members) to be as loyal to a domestic manufacturer, whereas the baby boomers
were always a Ford family or a GM
family."
Younger buyers have not always been a major concern of automakers, since
they tend to choose cheaper, smaller vehicles that carry slim profits. In
recent years, GM has shifted its attention from small cars to trucks and
sport utility vehicles. The company has said it loses money on every
Chevrolet Cavalier and Pontiac Sunfire it builds; those models will be 10
years old by the time GM brings out their replacements in 2004.
"Our research on younger buyers says they aren't necessarily interested in
small cars, "Wagoner said. "I don't necessarily believe that traditional
small cars with more progressive styling are what young buyers are after."
Other automakers have gone after younger buyers with more force. Among the
new vehicles targeted at the market are Chrysler's Neon and upcoming PT
Cruiser, the Toyota Echo and Ford's Focus -- all well-equipped models that
carry far more options than cars of that size and price had before. Ford
said Friday that one fourth of all Focus buyers so far were under 25 years
old - a higher share of younger buyers than any other vehicle sold in the
United States.
To compete with those models, Wagoner said GM would use more expressive
vehicles that are a step above the bottom of the market.
He points to the Pontiac Aztek, a new SUV coming out this year and the
Pontiac Piranha, a concept car that will be shown for the first time at this
week's Chicago Auto Show, as the types of vehicles that eventually will
bring younger buyers back into the GM fold.
"Our view is that we're increasingly focused on the kind of things that will
attract youthful (buyers) into the family," Wagoner said. "That's why we're
putting so much more emphasis on the Internet, because more people are using
it and because of the kind of people that are using
it as well."
Analyst Jim Hall with AutoPacific said the Aztek and an upcoming Saturn SUV
had the potential to make GM a contender for those consumers.
"The fact that they're developing vehicles like that at all is amazing,"
Hall said. "Their attitude for a long time was that they were going to be a
fast second to market with a new product. The irony is that being second to
market is a losing proposition."
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