America and GM: Can this marriage be saved?
U.S. car buyers continue to spurn GM and seem in love with Toyota. GM has a plan to fight back.
NEW YORK (CNNMoney.com) - Now it's official. Even the President of the United States thinks General Motors isn't building the cars people want.
President Bush was quoted in the Wall Street Journal last week as saying that GM should be building more fuel-efficient vehicles. Then maybe they could sell more cars and they wouldn't be in such trouble.
Meanwhile, hundreds of e-mails received by CNNMoney.com following a story about the improving quality of American-made cars showed that many Americans either don't believe it or just don't care anymore.
"Sorry. Too late," read the subject line of one message.
'"Better car' means more than just reliability," wrote another reader. "American styling is in the crapper and needs to be flushed."
"I have no plans to purchase an American automobile again for the rest of my life," wrote another.
Meanwhile, Toyota seems to have cemented a nearly spotless image in the American psyche, according to researchers who study brand perception.
"People's perception of Toyota is that Toyota has 'brand power,'" said Randy Sears, vice president for auto market intelligence for the company Brandimensions, "whereas GM would best be described as having a 'brand penalty.'"
GM's reliance on cash incentives to sell its vehicles has only added to the company's problems.
"Consumers view those programs negatively in that they view it as distress merchandising," said Sears.
Toyota, on the other hand, practically glows in the eyes of American consumers.
"We, as consumers, in the United States have begun to appreciate Toyota in a very similar way to that in which we appreciate (the computer company) Apple," said David Martin, President of Interbrand, an international branding consultancy.
Toyota is seen as a forward-looking brand that brings us high-quality products we need before we know we need them.
"We trust them to lead us," he said.
GM...? Not so much.
"We look to GM as a company that designs, like, two years late," said Martin.
While Toyota announces plans to roll out even more hybrid versions of its cars, GM announces plans to have some in a couple of years. Much of Toyota's image as a market leader rests on its line-up of hybrid vehicles, a market that Toyota entered on "a leap of faith," according to Toyota spokeswoman Nancy Hubble.
One difference between the companies is that Toyota's corporate image is attached, literally, to its products. And to the extent that Toyota cars make Toyota, the company, look good that positive image helps Lexus and Scion cars, as well.
General Motors cars, on the other hand, are sold under brands like Chevrolet and Cadillac. Unfortunately, said Martin, when consumers do have positive feelings about a brand or product, like Cadillac's visually striking luxury cars or the Chevrolet Corvette's performance, those feelings don't extend to the General Motors corporation at large and its other products.
"We earned our way to this position to a certain degree. It didn't happen overnight," said GM spokesman Jeff Kuhlman.
GM executives have admitted to being slow to turn around the company's heavy reliance on SUVs when market tastes began to shift toward the more car-like crossover SUVs first introduced by Toyota.
Also, GM quality lagged far behind that of Japanese competitors like Toyota for decades and the gap has truly begun to narrow only recently, GM executives readily admit.
Before it can begin gaining market share again, GM will have to continue improving vehicle quality -- in terms of both reliablility and "fit and finish" -- in addition to maximizing the flexibility of its factories so that it can more quickly respond to shifting tastes.
In recent surveys, GM vehicles have been at least competitive in reliability with competing vehicles. The company has also improved the design and feel of the interiors in many, but not all, of its vehicles. Still, unless customers -- many of whom have become resistant to even trying a GM vehicle -- can be attracted into showrooms the improved quality will continue to go unnoticed, Kuhlman said.
That means GM will have to make cars with more compelling designs that will attract buyers into showrooms without the need for cash rebates, Kuhlman said.
He pointed to current vehicles like the Pontiac Solstice and Hummer H3 as the kinds of emotionally engaging designs that GM needs. Future vehicles, including the Saturn Sky roadster, Saturn Aura and a redesign of the Chevrolet Malibu will continue the trend, he said.
Are American cars really that bad? Find out here.