GM Cutting Prices, Upping Ad Spend For Once-Hot Malibu, CTS
When someone pays tax, they generally like to think it’s going to towards something that will benefit society. Maybe it might be a repaired road? Or funding towards a crumbling school? I doubt they would want the money to go towards shifting a supposed CamCord killer or an alleged 3 series rival, but that’s what’s going to happen. BusinessWeek reports that executives at “New” General Motors are going to cut prices and rework adverts to boost flagging sales of the Chevrolet Malibu and the Cadillac CTS; two saloons considered critical to meeting Ed Whitacre’s target of a profitable 2010. That’s right, “New” GM are going to cut prices (A.K.A “Cash on hood”) to make more sales. Sound familiar?
GM’s North American president, Mark Reuss, are hoping that these plans will reduce the excess inventory at dealerships. Inventories were at five months’ supply, more than twice the industry average. “The CTS is going to be fixed, now,” said Mark Reuss. “We’re going to be right on the back of that working on Malibu. We’ve got to have Malibu selling a lot more than we do right now. We’re looking at what we should be doing with the car versus where we’re at.”. Steve Shannon, executive director of marketing at Cadillac said that CTS prices were cut by as much as $3000.
Business Week also reports that 3 people, familiar with Ed Whitacre’s plans, say that one of his criterion is to maintain U.S market share at 20%. However, the 3 people asked not to be named because the plans are not public. The GM CEO and Chairman wasn’t commenting on his plans. So much for transparency at GM.
to me, the CTS has always been stuck in the middle on size and price btw the 3 and 5 series - you don't get much for your 40K and your asking yourself "why bother" when you get the stuff and its 53K. The Malibu needs a name change - you've got no name credibility vs. Accord/Cam/Altima/Fusion/6. It could be 50 times better than the rest but to me it's name says old.
I too looked at the CTS and frankly was a little sticker shocked for what you got. I was at the car show and was able to do a lot of comparing and it really fell short. Though great exterior aesthetically IMO.
Why would I purchase a Chevy Malibu, when I purchase an Accord ex-l for $23,500 last May. The Malibu has to be priced way below a Honda or Toyota product. The Malibu may be a good car, but the brand perception and resale value are against it.
The Malibu is great car, but not the unquestioned leader in all areas. With the record unemployment, cutting the prices a little won't help sales very much, cutting them more will anger those who already bought one. I'd rather have a Malibu than a Ford Fusion, but the Ford is benefitting from the perception that Ford is better, and from those who resent the "bail-out" and won't buy GM. Here's a thought--take the Malibu and offer something no one else does in the family sedan class in the US. A station wagon would work; and/or a 4-cyl, 5 speed, with sporty seats (like the optional Recaros on the 2005-06 Cobalt SS), priced under $20,000. Would they steal more sales from other GM cars (Malibu/LaCrosse) or Camcord/Fusion? Can't tell. The econo-sporty 5-speed Malibu would cost some money for minor plant tooling, maybe a hole in the floorpan for the clutch line---a 'lean' GM could put this in production in 3-months, typically GM might be more like six--would that be soon enough? The wagon should've been planned for but wasn't--that would be expensive and complicated--need to design ($$$$), modify the body shop ($$$$), and general assembly ($). GM saved a few $ upfront, but what do you do now, when you're trying to sell a great car in a recession? Or, they can have a committee, shuffle the numbers around and hope potential customers perceive they will save money, and hope the economy picks up. Sadly, that's probably what will happen...the key word is hope....