Tuesday, July 03, 2007

What's wrong with GM?

Almost everything, but its latest stupidity is another poor marketing strategy: it hopes the new "Transformers" movie will help its sales for certain cars, which turn out to be gas-guzzlers that sell relatively poorly.

GM may finally move a step in the right direction when it realizes, among many other things, that it's erroneously thinking automobile sales will work in the same way as easily affordable, disposable toys that parents buy to placate clamoring children. When a kid sees a contemporary movie based on a cartoon that Dad watched, Dad probably won't think twice about spending $50 to buy him a few new Transformers toys. Then Dad decides he wants to buy a Camaro for himself, after seeing the movie? Really, what marketing dumbasses at GM dreamed this up?

Not to say there won't be some people who will go out and buy a Camaro or Hummer after seeing the movie, but even if the movie die have an influence, automobiles are not exactly an impulse buy for most people. So the buyers will mainly be those who were already considering the purchases and were finally pushed over the edge by the movie. Automakers do not rely on a market base of people wealthy enough to buy a new car on the spur of the moment. Advertising is said to be about convincing you to buy things you don't really need, but the difference between what you want and what you can afford become quite evident after you realize you just put thousands down and still owe many thousands more.

Ford reportedly paid 14 million pounds for the Mondeo's cameo in "Casino Royale," but the Mondeo is a car that actually sells (and has been for years, in its several incarnations, in international markets). When we consider automobiles selling in the U.S., people are concerned about gas mileage, so they're buying a million Toyota hybrid, and GM's fuel-efficient pickups, the Silverado and Sierra. They're buying regular Toyotas and Nissans, which have superior gas mileage to their American counterparts.

GM posted sales increases in May 2007, but June may be bleak since it's continually losing market share to "Japanese" cars made right here in the U.S.. So with a sales upswing no sure thing, think of how many additional cars GM will need to sell to break even for all it pumped into a movie.


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