Automotive News - April 21, 2008 - (Page 4)

4 • APRIL 21, 2008 GM offers free digital marketing package to dealers Ralph Kisiel rkisiel@crain.com Driven to digital Cobalt has expanded services to GM dealers. New Cobalt-built dealership Web sites launched April 1. Cobalt offers dealers marketing consultants and paid-search help. GM expects 98% of its dealers to enroll in the free program. Source: GM, Cobalt Group General Motors is so determined to rev up its dealers’ digital marketing that it is offering them a comprehensive package from the Cobalt Group — for free. GM expects almost all of its dealers to sign up. The package is designed to drive more in-market shoppers — those who intend to buy within 60 days — to GM dealership Web sites and turn them into sales, says Mark Degnan, the automaker’s director of local advertising and marketing. GM launched the program April 1. The company won’t reveal what it spent on the program but says it is significant. About 6,500 — or 90 percent — of GM’s dealers have signed up for the In-Market Retail Digital Marketing and collecting information on the Internet, “we feel it is part of our marketing commitment,” Degnan says. “We’ve followed the customers. That’s where they are, particularly when they are in-market.” 4 free offerings “This is a way for General Motors to get all their dealers involved in the digital world and do it in a manner that is cost-effective to the dealer body,” says Duane Paddock, dealer principal at Paddock Chevrolet in Kenmore, N.Y. “At the same time, General Motors knows that it is going to see the results.” Dealers who sign up get four features: 1. A Web site that can be customized and has direct links from GM sites. Cobalt’s John Holt: The program will allow GM to better coordinate national and local ads. 2. A consultant to manage the site’s content, optimize the site for Internet searches and coordinate the dealership’s online and offline marketing. 3. Search engine marketing, also called paid search, to drive local shoppers to the dealership’s Web site. Cobalt will buy search terms — such as the dealership’s name and city — on the Google and Yahoo search engines, making it more likely that the dealership shows up prominently in search results. 4. Sales leads delivered from GM sites directly into the dealership’s lead management software. Cobalt CEO John Holt says the program will allow GM to better coordinate its national advertising message with its dealers’ local advertising. Consistent message Paddock, co-chairman of GM’s national dealer council, says he initially was skeptical. But after six months of testing, he says, “they were right and I was wrong.” “I’m very difficult to please when it comes to marketing and results. I don’t give GM or any outside company any leeway,” Paddock says. “I need to see measurable results. Without question, this is a great program both for GM and the dealer body.” c Package. Before this program, 44 percent of GM’s dealers were already using a Web site built by Cobalt, of Seattle. Ultimately, Degnan expects up to 98 percent will participate. Given that consumers are shopping With new products, is there life in Saturn? Brand waits for buyers to gravitate to upmarket orbit Jamie LaReau jlareau@crain.com Saturn ties for most-improved brand ➤ 1 has sold 16,382 Auras through March. Meanwhile, the Outlook is the slowest selling of GM’s three new large crossovers, trailing the Buick Enclave and GMC Acadia. DETROIT — As General Motors works on its corporate turnaround, a smaller version is under way at its Saturn brand. After years of selling cars to economy-minded buyers who loved the brand’s low-pressure dealerships, Saturn has an all-new vehicle lineup. GM wants to reposition Saturn to attract customers who value European styling and handling and will pay for them. Customers have yet to arrive in a huge numbers. Through March, Saturn’s U.S. sales totaled 48,306 units, down 15.3 percent from 2007. Saturn officials and others say brand loyalists are unaccustomed to high sticker prices — a well-equipped Outlook crossover, for instance, can top $40,000 — and conquest customers have not yet considered Saturn for mid-sized cars and crossovers. Rethinking Saturn Lajdziak said Saturn advertising is addressing the brand identity shift with the theme “Rethink.” Saturn has been “a brand that has rethought everything that it’s done in the marketplace, hence ‘Rethink,’ ” Lajdziak said. This month, Saturn is launching an advertising campaign using the “Rethink” tag line. Initially it will emphasize the Vue and Aura and later will include the Outlook. One industry analyst is skeptical. “Tell me why I would not buy a Chevy Malibu or a Toyota Camry or a Honda Accord,” says Doug Scott, an analyst at GfK Automotive in suburban Detroit. “ ‘Rethink’ is one thing, but what’s the delivery on ‘Rethink’? ” Saturn must do more to distinguish its vehicles from import rivals, as well as Chevrolet models built on the same vehicle architectures, Scott says. The Malibu is a platform mate of the Aura, and the Chevrolet Traverse coming this fall is built on the same Lambda crossover architecture as the Outlook. “So we have two vehicles that are very nice in the Chevrolet division that are priced better,” Scott says. “They will also get significant advertising budgets at Chevrolet. So Jill’s job most see SATURN, Page 44 Rebranding challenge GM CEO Rick Wagoner admits it will be a challenge to rebrand Saturn. “We knew what we were doing, which is to change the profile of the kinds of products that we sell at Saturn from basically low-priced cars to cars that compete on the basis of being great cars, European influence, et cetera,” Wagoner said at the National Automobile Dealers Association convention in February. “It’s fair to say that’s not an easy assignment.” Saturn plans to spark sales with a new ad © GM CORP. Saturn General Manager Jill Lajdziak: “You want to bring some of your loyalists with you, but we have to cast our net wider.” Here she introduces the Astra at the Chicago Auto Show in February. campaign this month. Jill Lajdziak, Saturn’s general manager, said the brand needs to go beyond traditional buyers. “You want to bring some of your loyalists with you,” she said, “but we have to cast our net wider.” Saturn leaders met with dealers earlier this month in Washington to discuss how to boost three core products: the Aura sedan, Vue crossover and Outlook. Two of those products, the Aura and Outlook, are slow sellers. Saturn is on track to sell about 70,000 Auras this year — again well below expectations of more than 100,000 units. Saturn Lithia extends vehicle repair warranty to 3 years/50,000 miles Donna Harris dharris@crain.com In a bid for repeat service and parts business, Lithia Motors Inc. now offers one of the industry’s longest repair warranties. The public dealership group insures repairs — except those that involve wear items such as brake pads — for three years or 50,000 miles. Among automakers, dealerships and aftermarket suppliers, the industry standard is generally one year or 12,000 miles. The repair warranty is part of a new package of service guarantees Lithia calls Assured Service. Lithia also promises its dealerships will provide same-day service on most maintenance jobs and charge no more than the price quote. “That’s the strongest in the business right now, to my knowledge,” said Ron Stoner, Lithia’s vice president of fixed operations. “If people like and trust you, they will come back. Our big push is retention.” The company’s Assured Tires program gives customers free tire rotation and free repairs of flat tires. Lithia also replaces tires punctured by road hazards for as long as two years after purchase. Rick Nelson, an industry analyst for the Stephens Inc. investment firm in Chicago, says Lithia’s execution of the program “will be critical.” But he adds: “This strategy could differentiate Lithia from the rest of the pack.” Lithia tested the program at several dealerships in 2006, Stoner told Automotive News. Those stores experienced a 21 percent increase in nonwarranty retail parts and labor revenues, he said. Steve Emery, a consultant to the National Automobile Dealers Association, says he has “heard of dealers doing lifetime warranties on any component they replace. They mark up the part a little bit and put the money in a reserve fund in case the part does fail.” Most automakers, Emery adds, “warrant their parts for 12 months. If a part is bad, it’s probably going to fail pretty quickly. The likelihood of it failing past that period is slim. Financially, there’s not a huge risk.” To avoid consumer complaints, Emery says Lithia must document repairs carefully on complicated service jobs. The company’s dealerships must make clear to customers that the warranty applies only to a part that is repaired or replaced, not to an unrelated failure, Emery says. Replacement of a transmission seal, for example, would not necessarily cover a subsequent failure of the transmission oil pump, even within the warranty period. Lithia, of Medford, Ore., also markets new and used vehicles under its Assured brand. The sales program is based on no-haggle prices and a no-questions-asked return policy. Lithia ranks No. 8 on this year’s Automotive News list of the 125 largest U.S. dealership groups. Its 110 dealerships sold 63,607 new cars and trucks last year. c

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Automotive News - April 21, 2008 Reorganization plan gives more muscle to 4 sales-channel execs Hummer plummets, Saturn soars in sales per franchise Chrysler-Nissan: Loads of partnership potential LIFESTYLE PICKUPS Strike averted Friday at GM transmission plant Hyundai to phase out Tiburon Veteran lobbyist looks back on decades-long mpg battle Autonews.com offers news customization GM offers free digital marketing package to dealers Lithia extends vehicle repair warranty to 3 years/50,000 miles With new products, is there life in Saturn? Ford plans $100M-plus F-150 launch Ford broadens its diesel strategy GM pitches its management system to dealers Supplier to help Mahindra offer diesel hybrid Transplants top 40% of N.A. output in March Geely chief: 'We are still an ant' Honda could import cars from China GM redirects efforts to serve emerging markets Beijing showstoppers New Challenger is appetizer for full line in 2009 Last week, I got a glimpse of the future Service contracts: Federal oversight is needed Delphi mess drags on Can't we stop importing oil? Ryan revolutionized this business An editorial glass ceiling? Driving on hydrogen — pros and cons BMW should build even more here Not what New York ordered Magna exec: More suppliers will fail Canada sales off 0.4% in March Bosch pushes crash avoidance Chrysler plans hybrid Dodge Ram Honda engineer is honored by SAE for safety efforts Panel: Diesels may hit 20% of U.S. market by 2020 Automotive News PACE Awards: Night of black ties, trophies, praise PACE Awards honor innovation Truck sales drop 31% in March Honda's new Pilot is bigger, more upscale In China, GM looks to fresh vehicles in 2009 U.S. economic woes hurt shareholder values Judge refuses to toss GMC franchise-award case Dealers Farley: Ford's marketing team is ready to roll Landry: Chrysler's consolidation will spawn service-only stores Profits up at Johnson Controls Hyundai to fix airbag problem GM to build $200 million Brazil plant Convis is CEO of Dana Holding Denso names Katoh CEO Stephen Feinberg speaks! Hogan eyes CEO spot in startup Chrysler reviving its global dreams? How I saved Delphi: A work in progress Tesla Motors' lawsuit: Designer Fisker ripped us off Concert in the key of C-3PO

Automotive News - April 21, 2008

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