By on February 19, 2008

x08ch_cr012.jpgWhen I get press releases, there's always an "about whatever manufacturer" paragraph at the bottom. Normally I don't read it; it's just marketing hyperbole. But today, Chevy's 'claimer" caught my eye. "With the largest dealer network in the United States, Chevy is the leader in full-size trucks and the leader in sales of vehicles priced $35,000 and above. Chevrolet delivers more-than-expected value in every vehicle category, offering cars and trucks priced from $9,995 to $83,175." Huh? Why's the Bow Tie brand– GM's supposed entry-level, value-oriented division– bragging that they sell the most vehicles in the "$35k and above" category? With the median new car price hovering around $27K, that's a whole lot of high-priced rides the "value division" is selling. Yes, much of what Chevy sells at the $35k and up price point are trucks and SUVs. But the fact that the spinmeisters view Chevy's $73k price span as a virtue reveals the depths of GM's non-existent branding strategy.

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29 Comments on “Chevy’s Branding Sucks...”


  • avatar
    AKM

    I bet they don’t include incentives in that $35k+ price….

  • avatar
    starlightmica

    That’s how they keep those bean counters busy, spinning the sales figures, and the multibillion dollar losses, too. The Malibu 200% retail sales increase was last week’s (or was it the week before?) numbers exercise.

  • avatar
    jaje

    Yep, with a MSRP of a $40k truck/suv that they wind up selling at $30k…it still counts. I can see next year the Aveo will have a $35k sticker price but a $25k incentive – imagine the bargain shoppers looking at that. $25k off – that’s 70% savings. Better hurry out and buy one.

  • avatar
    KatiePuckrik

    At the risk of flaming, here I go…..

    When a European or Oriental car company have falling profits, they hire more engineers to build better products. When Detroit have falling profits, they employ more accountants to spin the figures…….

  • avatar
    SherbornSean

    If the point is that Chevy has an unfocused product line-up, then I agree.

    But if commenters are saying it’s a bad thing that Chevy sells so many $35K+ vehicles, then I don’t understand.

    What do you want them to do? Hundreds of thousands of people are happy to pay $40K for a Tahoe or Suburban. You want Chevy to say “No thank you, loyal customer, we don’t sell vehicles for more than $30K?”

  • avatar

    Sucky branding, but pretty easy to fix.

    All Chevy PR needs to do is mention the loyal Diesel fleet owners (and the bazillion chassis/cab/suspension/bed configurations available for most any company’s needs) and the $35k+ spin would work.

    They sell a lot of those rigs and profit margins on (for example) a $75,000 Duramax rigged up for holding a crane have gotta be pretty sweet.

  • avatar
    Buick61

    I think it speaks well of a mass-market brand that so many people have no issue shelling out that kind of coin for the rights of ownership.

    Other brands with large price spans: Nissan (Versa to GT-R), Toyota (Yaris to Land Cruiser), Dodge (Caliber to Viper), Lexus (IS250 to LS600H), and Mercedes-Benz (C300 to SLR (a whopping $460,000 spread)).

  • avatar

    Buick61 :

    Other brands with large price spans: Nissan (Versa to GT-R), Toyota (Yaris to Land Cruiser), Dodge (Caliber to Viper), Lexus (IS250 to LS600H), and Mercedes-Benz (C300 to SLR (a whopping $460,000 spread)).

    If Nissan, Toyota, Dodge, Lexus and Mercedes-Benz jumped off a roof, would you do it too?

  • avatar
    Buick61

    Robert Farago:

    If Nissan, Toyota, Dodge, Lexus and Mercedes-Benz jumped off a roof, would you do it too?

    All I’m saying is that it’s pretty standard to have a wide price span in the industry these days.

    Why is Chevy being called out for it? Especially since they’re the ones that are succeeding with the strategy. If sales were tanking because of it, then you’d might have a point. But if it works for them, then where’s the beef?

  • avatar

    Buick61 has a pretty good point here, people dump on Chevy for being unfocused, yet Toyota is doing the same thing and isn’t really getting called out. I think part of it is because Toyota still has the USP of “quality” cars, but that is eroding as they grow. It’s certainly something to consider, the Yaris to Land Cruiser stretch is pretty wide.

  • avatar

    Buick61 : Why is Chevy being called out for it? Especially since they’re the ones that are succeeding with the strategy. If sales were tanking because of it, then you’d might have a point. But if it works for them, then where’s the beef? First, Chevrolet is one of eight GM brands. As we’ve discussed here, Chevy’s wide price spread is creates a price overlap problem with its in-house competitors that leads straight to horrific intra-brand cannibalism. GM’s overall branding strategy sucks; Chevy’s sucks within it. [NB: Lexus may have some overlap with Toyota, but not much. Mercedes-Benz doesn’t have an in-house competitor. Dodge? What are you kidding? Second, Chevy’s NOT DOING WELL. Overall, the brand was up .9 percent last month. If you take out fleet sales and that suspiciously gi-normous jump in Cobalt and Equinox sales, it wouldn’t be too much of a stretch to say Chevy’s doing a lot less than well.

  • avatar
    jaje

    Toyota doesn’t have 8 brands…only 3. B/c of the out of whack portion of brands GM has Chevy was supposed to be the middle of the road for the average consumer. GMC was supposed to be for the professional grade truck users (these should be the duramax and diesel suv owners) – Pontiac for performance but they only get a Solstice which sales have tanked and finally getting another v8 powered car – it’s other cars are rebadged Chevys. Then there’s Buick, Saab, Isuzu (leaving the US market finally), Suzuki, and Saturn.

    Since Toyota is catching up with GM and matching volume with only 3 brands (2 really as Scion is just a sub brand of Toyota) – that’s the problem. That’s why Toyota doesn’t get this flack for being so poorly planned and short term focused.

  • avatar
    Buick61

    The issue is the price span. Tell me how a Corvette Z06 would be better served if branded as a Pontiac or any other GM brand that rests above Chevy in the corporate heirarchy?

    The vehicles that Chevy sells above $35,000 aren’t luxury cars, they’re mostly trucks and SUVs. Pontiac has no business selling those. GMC sells upmarket versions of them already, so they’re not losing out by Chevy having those products. Saturn, Saab, Buick, and Hummer? A Tahoe wouldn’t work as any of those brands. And Cadillac has their own set of SUVs it sells successfully above that range. The only car Chevy prices that high, again, is the Corvette. That’s been a Chevy mainstay since 1953, and no other brand is suited to sell it. Someone will mention the XLR, but that’s clearly no Corvette.

    So it doesn’t matter that GM has 8 brands, Chevy isn’t stepping on their toes to sell what it sells in the numbers that it sells them.

  • avatar
    Pch101

    So it doesn’t matter that GM has 8 brands, Chevy isn’t stepping on their toes to sell what it sells in the numbers that it sells them.

    You really believe that the Aura and the Malibu don’t compete directly with one another, or that the G5 and Cobalt don’t go head to head?

    I would disagree with Mr. Farago, though, in that I don’t see the price point as the central problem, per se. The heart of the problem is that the Sloan system of multiple brands distinguished largely by price and trim levels stopped working decades ago, and GM has been negligent in failing to address this proactively. It’s not such a bad thing that Chevy sells $35,000+ SUV’s; what’s an issue is that most of the other badges do, too.

  • avatar
    SherbornSean

    Bad Chevy! Stop selling $40K vehicles immediately!

  • avatar

    Buick:

    The issue is the price span. Tell me how a Corvette Z06 would be better served if branded as a Pontiac or any other GM brand that rests above Chevy in the corporate heirarchy?

    The issue is branding. Obviously, the Corvette is way out of whack with Chevy. Never mind that. What is a Chevy? And while you’re pondering the imponderable… pop on over to GM.com/shop.

    Your thoughts?

  • avatar
    Buick61

    Pch101 :
    February 19th, 2008 at 12:18 pm

    You really believe that the Aura and the Malibu don’t compete directly with one another, or that the G5 and Cobalt don’t go head to head?

    Robert Farago :
    February 19th, 2008 at 12:26 pm

    The issue is branding. Obviously, the Corvette is way out of whack with Chevy. Never mind that. What is a Chevy? And while you’re pondering the imponderable… pop on over to GM.com/shop.

    Your thoughts?

    Both of you have expanded beyond the scope of the original editorial and my response. Strictly in terms of $35K+ vehicles, Chevy doesn’t really push aside other GM Brands. Simple as that.

    If you want to talk about the downmarket cars, then yes, GM has issues. We all know that, it’s nothing new.

    But, again, that’s not what we’re discussing here today.

  • avatar

    Buick61 :

    Both of you have expanded beyond the scope of the original editorial and my response. Strictly in terms of $35K+ vehicles, Chevy doesn’t really push aside other GM Brands. Simple as that.

    Uh, yes it does. Have a look at the link. And this overlap issue is very MUCH on topic; branding is the reason why Chevrolet SHOULDN’T have such a wide price range.

    And you haven’t answered ny question. If it’s OK for Chevy’s to span such a large price gap, WHAT IS A CHEVY?

  • avatar

    I think Pch101 hit the nail on the head here. I think Buick61’s point is still valid, because he seems to be reacting to the article’s focus on pricing. It isn’t really a matter of pricing, but rather platform sharing.

  • avatar
    Buick61

    Chevrolet: (French orig.) A mass-market, full-line brand of value-priced, well-appointed automobiles.

    A Chevy means different things to different people. What’s a Toyota? What’s a Ford? What’s a Honda?

    How are both a Civic and a Ridgeline a Honda? How are both a Yaris and a Sequoia both Toyotas?

    They are because they just are.

  • avatar

    Buick61 :

    They are because they just are.

    You’re kidding right? Chevy is Zen?

    Toyota – reliable
    Ford = ?
    Honda = frugal

    In today’s hugely competitive automotive market, a car company without coherent branding is dead in the water. Period.

  • avatar
    whatdoiknow1

    By doing a comaprison with the Toyota business model we can see that Chevy in and of itself is not the problem. The problem is with the rest of the traditional GM brands that are “played out” and irrelavent in today’s marketplace. Buick and Pontiac are worthless brands that serve only to drain much necessary resources from Chevy and Cadillac. They need to go the same route as Oldsmobile and fast. Saturn is a bastard child that should have never been born. As Toyota and Nissan continue their assualt on the USA light truck market GMC as a seperate brand is also becoming a moot point.

    Why is it that everyone in the world with the exception of GMs management has come to the understanding that GMs NA marketshare is never going to reach the level of manufacturing capacity that GM currently has in NA ever again.

    GM does NOT have the costumer base to support its operations and it is time to end the fantasy that these costumers will come back. These former costumers are Toyota and Honda loyalist today the same way they were GM loyalist 40 years ago. Joe Blow Jr. from the mid-west that is driving around in a Japanese beater today will just as likely buy a Japanese branded pick-up in a few years. Nevermind the “buy USA” crap, if Toyota or Nissan is offering the better product or deal they stand a very strong chance of capturing the costumers.

    GM is so unrealistic that it is scary! It is time for GM to admit to itself that its was part of a once dominant oligarchy that is being driven to irrevalence by its inabilty to actually SEE the competition.

  • avatar

    I am a long time Chevy guy (small block V8s rule) and I find this messaging from Chevy a bit confusing.

    After establishing themselves as a value brand they start drawing attention to the fact that they sell more expensive vehicles than anyone else. What?

    Corvette is an OK exception given it’s history, but Chevy should stick to the value “brand” and leave the pricier stuff to Buick and Cadillac.

  • avatar
    jaje

    Chevy’s biggest competitors are Buick / Pontiac / Saturn dealers. The money wasted in advertising the same car rebadged and remarketed under 4 other brands is plain inefficient. The F150 sells in huge volume b/c it’s one single brand (versus GMC and Chevy trucks…they are 99% the same).

    Chevy to means – value priced car b/c of huge incentives. I don’t think in terms of full sized lineup anymore. Anyway, if I want a test drive I go to the rental car company and pick my choice.

    Pontiac – leftover Chevys with wider tires and hideous body cladding (thankfully changing). Rental fleet queens too.

    Buick – leftover Chevys with sofa seats.

    Saturn – left over Chevys (or a rebadged Opel) with nicer customer service.

    Cadillac – low level luxury marque (a unique brand from GM)

    GMC – Chevy trucks with slightly nicer trim.

    Isuzu – Chevy trucks with an Isuzu nameplate stamped on it. Now defunct.

    Saab – Opels sold in the US.

  • avatar
    whatdoiknow1

    Buick61 :

    In a nutshell GM/ Chevys problem with a comparison to Toyota is simply that the Aveo and Colbot are 100% POS cars that absolutely SUCK. While on the other hand a Yaris and Corolla (while boring, argree/ disagree) are well built cars that will provide their owners with a high degree of satifaction over an expected long life.

    So while the Yaris and Corolla may be low priced they are still considered to be “high quality” products that are assembled with pride. Outside of some Honda products they are considered to be BEST in class. Remember to the majority of costumers out here Quality and Reliability are worth paying a premium for.

    In addtion to the bottom Toyota products every other product for sale in a Toyota dealer is also highly rated and considered to be amoung the best in its respective class. So what we have with a company like Toyota is a reputation for making high-quality products, of which people are willing to pay “extra” for. This “higly regarded” reputation allows Toyota to successfully sell vehicles with vast price range under the same brand name that is synonymous with high quality and good value.

    When you go into a Chevy dealership you will find a host of poorly engineered and built vehicles that are routinely trashed by the media and general public as being sub-par. If you go out back you will also find a dealer lot full of said vehicles looking like sad unwanted orphans. Mixed up in between this mess are some decent full-sized SUVs and Pickups plus an excellent (performing) sportscar that ranges in price from expensive to extremely expensive. Considering how crappy a Aveo, ColBolt, Malibu Maxx, Equinox, and Impala are unless you are a Chevy/GM diehard why would you want to buy a $35,000+ SUV or a $50,000+ sportscar from a company that appears like it could careless about the quality of its mainstream products let alone its reputation.

  • avatar

    I think that the point is this: Regardless of what the price-span’s are, Chevy chose to HIGHLIGHT the fact that they sell more “expensive” vehicles than anyone else. Toyota et al don’t highlight useless (not to say, confusing) data like that.

    That is the point of this news segment, is it not?

    Branding screwed up? Absolutely. Maybe Chevy should court Mr. Farley next…once Dearborn is done with him…

    Brands to me (who they “say they are”):
    Toyota: Quality Transportation Appliances
    Chevy: Value GM (compete on price, bowtie)
    Pontiac: Sporty GM (wind up competing on price)
    Buick: Full size GM (wind up competing on price)
    Cadillac: Top shelf for GM
    Ford: Value Vehicles(compete on price, blue oval)
    Mercury: Rebadged Ford’s
    Lincoln: Top shelf for Ford
    Honda: Technology, Quality, Reliability; Do more with less
    Nissan: ??? The other Japanese auto manufacturer
    Mazda: All of our cars feel sporty, we swear!
    Chrysler: ??? No idea
    BMW: Driver’s vehicles, spare no expense
    M-B: Luxury vehicles, spare no expense
    Lexus: Luxury vehicles, spare no expense
    Infiniti: Driver’s vehicles at lower-than-BMW prices
    VW: German everyman’s car
    Porsche: Sports cars, spare no expense

  • avatar
    geeber

    Mr. Farago,

    The central point you are trying to make – that Chevrolet lacks a coherent brand message, and that brand message is crucial in today’s ultra-competitive market – is correct.

    The problem is that you are focusing on the price spread between the cheapest and most expensive Chevrolets, and that is NOT the problem.

    I went to the Philadelphia Auto Show, and saw Toyotas selling for over $60,000…but Toyota’s image and brand identity are still intact.

    Why? Because Toyota is associated with reliability, good workmanship, value-for-the-money and user-friendly design, and every vehicle, from the Yaris to the new (very expensive) Land Cruiser, supports that brand image.

    It doesn’t matter that everyone who can afford a brand-new vehicle can buy a Yaris, while only the wealthy can afford a Land Cruiser. All of those vehicles support the Toyota brand image.

    Now let’s look at Chevy…the full-size trucks SUVs are widely respected for their capabilities and durability. But the Colorado looks as if it were designed to be built as cheaply as possible, and it performs that way, too. The mid-size SUVs and Equinox are nothing special, either.

    Among passenger cars, Chevy has the bottom-feeder Aveo and Cobalt, small cars designed to make you regret you didn’t have more money to spend on a car. Then we get to the Malibu, which is competitive with the class leaders, but the next rung on the ladder is occupied by the Impala, an old-school GM vehicle, a mediocre car that sells to fleet customers and those looking for rebates.

    The Corvette is world-class, but the only thing it shares with the rest of the Chevrolet lineup is showroom space…the days when anyone could say that there is a little bit of Corvette in every Chevrolet are long gone.

    Chevrolet features a lineup of cars, trucks and SUVs with widely varying quality levels and design philosophies, not to mention rankings against class rivals.

    Even worse, aside from the Silverado, Tahoe/Suburban and Corvette, most of us would be hard-pressed to name any area where those vehicles excel.

    The idea put forward by other posters that Chevrolet doesn’t push aside other GM brands misses the point…the original philosophy behind Alfred Sloan’s stairstep divisional structure was that each brand occupied a specific market slot, and the more expensive brands were superior to those on the lower rungs.

    If Chevrolets are selling for the same prices (or more) as Buicks or Pontiacs, then how can GM claim that those brands are “better”…which begs the next question, “Why do those brands exist?”.

    As usual, Pch101 nails it: The heart of the problem is that the Sloan system of multiple brands distinguished largely by price and trim levels stopped working decades ago, and GM has been negligent in failing to address this proactively. It’s not such a bad thing that Chevy sells $35,000+ SUV’s; what’s an issue is that most of the other badges do, too.

    The problem here isn’t that Chevrolet sells lots of $30,000+ vehicles…the problem is that this highlights the obsolescence of GM’s brand structure, and the need for GM to jettison Buick and Pontiac, which have outlived their usefulness.

  • avatar
    keepaustinweird

    as a public relations and marketing professional, I’m horrified by this and am perpetual amazement at how these things make it to the light of day.

    Its no wonder foreign manufacturers are drinking the domestics’ milkshake!

  • avatar
    kjc117

    The PR is a mistake especially when they put in the actual figures.

    Chevy is still entry level. A $80k Corvette is a entry bargain vs. a $200k Ferrari 599. Colbolt vs Civic, Impala vs Accord, Silverado vs Tundra, etc.. they are still entry level vs the competition.

    Chevy PR people screwed up.

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