GM Struggles to Change Perceptions

Getting out from under the shadow of “Government Motors.”

by on Oct.11, 2013

The Chevrolet Sonic has made quite a splash since its debut for 2012.

The quality of General Motors vehicles is getting better but consumers still tend to believe cars from Toyota and Honda are more reliable, according to independent research. And that’s a serious problem the Detroit maker is struggling to overcome, particularly along the East and West Coasts where GM lags well behind its import rivals.

The irony is that General Motors products have actually bested Toyota in a number of recent surveys, including the closely followed J.D. Power Initial Quality Survey. GM was the top maker in the 2013 IQS while Chevrolet landed in the Top Five, a rarified group normally limited to luxury brands. Meanwhile, the maker’s Chevy Sonic subcompact topped its segment for the second year running in Power’s APEAL, or Automotive Performance, Execution and Layout survey.

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That prompted a celebration at GM’s Orion Assembly plant in suburban Detroit this week, where Roman Lesnau, of J.D. Power Associates told employees that their work has been a critical part of improving the maker’s quality and customer satisfaction scores.

APEAL is based on responses from more than 83,000 new vehicle owners asked how gratifying a new vehicle is to own and drive in the first 90 days of ownership.

Lesnau noted the Sonic beat out traditionally strong vehicles from Toyota and Honda, the two companies that have dominated the subcompact segment for more than three decades.

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Winning APEAL — which judges how consumers actually like a vehicle, even if it may have quality issues — for two years in a row is a very impressive achievement, he said, since the competition for a third award promises to be stiff. But GM is clearly making big strides in improving the quality of its vehicles, said Lesnau.

“At J.D. Power we’re very optimistic about GM quality going forward,” he said.

Chevrolet had three segment award recipients – more than any other brand – in the 2013 APEAL study. Besides the Sonic, the Chevrolet Volt ranked highest in its segment – for the third year in a row, in part because of its dedicated band of customers – while the Chevrolet Avalanche also received an award for the second year in a row. The Avalanche, however, is being retired.

Together with the Buick Encore, which ranks highest in its segment in its launch year, GM received a total of four APEAL segment awards. In addition to the award recipients, a total of seven General Motors’ models placed in the top three of their respective segments.

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Despite the success in winning third party endorsements for its quality, customers are still skeptical about the reliability and durability of GM products, GM still trails in the perception of the customers ed through J.D. Power’s surveys, Lesnau cautioned.

The maker is also continuing to feel the impact of having taken a bailout to survive its 2009 bankruptcy. At the time, some political pundits went so far as to call for a boycott of what they dubbed “Government Motors.”

The U.S. Treasury sold off another $570 million of its remaining stock in GM last month and is on track to exit completely even before the target date of April 2014. GM officials are hoping that final sell-off should soften critics – though the multi-billion-dollar losses taxpayers will suffer could continue to raise the hackles of political foes and leave some to still steer clear of GM showrooms.

But politics aside, GM officials are hoping that the company’s continued improvement in quality will win many buyers back.

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Gerald Johnson, GM vice president of manufacturing, told workers at the Orion plant that another marker of GM’s turnaround can be measured by the fact that warranty costs have gone down for five consecutive years now.

“We didn’t do that by beating up on suppliers. The incidence of defects per thousand also has gone down,” he said.

The awards from J.D. Power recognize and honor the hard work done in the Orion plant, he said. “We’re part of a renaissance in this company.” he said. But the job is far from complete, he said. “Everyone inside the company has to continue to find way to do things better,” stressed Johnson.

Paul A. Eisenstein contributed to this report.

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3 Responses to “GM Struggles to Change Perceptions”

  1. Jorge M. says:

    Unless Consumer’s Report can comvince the masses that GM or some other entity is producing as good or better cars, the ingrained mentality is that Honda and Toyota are the leaders in the small car segment.

    As we see with recent recalls, Honda and Toyota have issues like all car makers but there has always been a perception that these two were superior to the competition. Decades ago there may have been some truth to this belief but the situation changed a long time ago but CU and others have been beating the same drum none the less.

  2. heyfred3000 says:

    So much of it stems from the “no one buys a small car unless they just have to” idea that has only died at GM’s USA brands within the past 3-4 years. They offered such poorly adapted small cars they had to give the Aveo a different name (Sonic) just for the USA. Its still the Aveo elsewhere, and sold as a low-line, slightly sporty, family car, with “American” features standard that are often options elsewhere. They just haven’t known how to market it here.

  3. Jorge M. says:

    They also don’t particularly care to sell small loss leader cars if they can sell higher profit, larger models.

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