Chevrolet General Manager Ed Peper presides over the launch of the new Cruze, which will be a critical product, not just for Chevy, but for GM, which is counting on its "main dog" brand to regain lost market share.
There was a time, not that many decades ago, when General Motors controlled more than half the U.S. automotive market. Today, the company that has just re-emerged from bankruptcy is down to barely 20%, and the automaker expects to give up a few more points of share as it abandons four of its eight North American brands.
But the losses GM projects aren’t quite as great as some skeptics would expect, and that’s because the company is betting it can regain some of the ground it might otherwise lose with a big push by its biggest division, Chevrolet – which CEO Fritz Henderson has described as GM’s “main dog.”
Back when GM dominated all competitors, and Dinah Shore told Americans to “See the USA in Your Chevrolet,” the brand was almost synonymous with America. Today, it struggles to hang onto consumers, especially in import-oriented markets like California. So, it’s not surprising, Chevy is ready to roll out an experimental sales program that will first be test-marketed on the West Coast, in partnership with eBay. To find out more about that project, and what other plans Chevrolet has in store, TheDetroitBureau.com’s Bureau Chief Paul A. Eisenstein spoke to Chevy’s affable general manager, Ed Peper.
TheDetroitBureau: GM CEO Fritz Henderson has described Chevrolet as the newly-reborn company’s “main dog,” and is counting on you to not just maintain but grow the company’s sales and market share. Sounds like a big responsibility.
Peper: I love the challenge and think we’re going to get the opportunity to do with Chevy what we need to do to dominate not just the lower end of the market but to some degree, the middle and even the upper end of the market. I’m really excited about what we can do.
TDB: How are you going to do that?
Peper: With GM ending up with just four core brands, we’re now going to have the resources to compete. (In marketing dollars) we were outspent by both Toyota and Ford, last year. We need resources, we need the additional dollars to compete nose-to-nose with these guys, and going forward, we’re going to have those dollars. We’re going to be cutting back on the number of models for the company to promote, so we’re going to have more per vehicle to spend.
TDB: How much more?
Peper: I can’t tell you that, but it’s not just about spending lots of money. It’s all about getting into the consumer’s space and figuring out what they do. Of the three brands, Chevy, Toyota and Ford, I would say we have had the largest proportion of our resources going into digital (marketing) the last few years. I like that very much because it’s measurable.
TDB: With more money and resources, where will you be focusing all your efforts?
Peper: In terms of product positioning, we’re spending a lot of money, right now on cars and crossovers. We’re going to continue telling people about our great design, our great fuel economy and the extraordinary value we deliver for the customer. We’re still playing in every segment and we’re doing well with products like Camaro, which is kicking tail. We’ve got the Equinox coming and we expect a lot out of it. Then there’s the Cruze, which will be as critical as the Malibu was.
TDB: On the subject of the digital world, GM plans to launch a joint venture with the online auction house, eBay, where you’ll be able to bid on a GM product through eBay Motors. What will Chevy’s role be, and what can you tell us about this project?
Peper: It’ll probably be Chevrolet, Buick and GMC in the project, and will do it, first, as a test in the California market. We’re still working out the details.
TDB: Okay, so will you allow a potential buyer to go in and, say, offer $50 for a new Corvette?
Peper: It’s hard to say, at this point, how we’ll handle bidding, but there will have to be a cap. You won’t be able to buy a $25,000 vehicle for $5. But this will allow customers to control the shopping process a little more. We’ve used eBay already, to a smaller degree, for our Certified Used Vehicle program, so we know it can work. We think that if we can get a promotion like this to work in California, we can get it to work anywhere.
TDB: Should we expect other online programs, considering CEO Henderson’s comment that he likes “experimentation”?
Peper: We’re going to move fast and try a lot of different stuff. We’re already doing a lot of things in the digital world. If you look around the Internet, for example, and try to look up something on, say, a Ford F-150, we’re going to smother you messages about the Chevy Silverado.
TDB: You said you like the Internet because it gives you more measurability…
Peper: “…it gives us an opportunity to measure results, including sales, and then to see the efficiency with which our dealers follow up on (online) leads. In 2007, according to research by the Cobalt Group, (an Internet auto data service), Chevy was just 15th in the industry in terms of how well our dealer salespeople followed up on online leads. We told our dealers, it is not acceptable if we don’t get right back to people. And just a year later, we came in second in the same study.