Sunday, June 24, 2018

It's counterintuitive: How GM sales rose

Compiled from tbt* news services

Marketing professionals said General Motors has been able to increase sales even while being hammered by bad news over the ignition-switch flaw linked to 13 deaths. That, they said, is largely because the vehicles involved in the recall are no longer made by the company.

That has allowed management to lay the problems linked to the recall to the "old GM" — the company that existed before the automaker's bankruptcy and federal bailout enabled it to emerge with more working capital and a streamlined and much improved product line.

"You see that a lot of cars people are buying today are unrelated to the small cars involved in the recall," said Greg Smith, chief creative officer of the VIA Agency, a marketing firm that focuses on middle-class consumer brands. "GM's cars are getting incredible reviews. I think the narrative is that the problems are things that happened before the sea change in Detroit."

Although GM's wide-ranging recalls have included some of its best-selling vehicles, the models affected by its most prominent recall — the ignition defect, linked to 2.6 million small cars like the Chevrolet Cobalt and Saturn Ion — are no longer in production or on showroom floors.

The company's May sales increases were led by a 40.5 percent increase for the Chevrolet Cruze compact and a 23.1 percent increase for the redesigned Chevrolet Impala.

GM is still facing a series of government investigations and a slew of private lawsuits in connection with the botched recall. An internal report into the problem is due out in the coming days.

Jeff Schuster, an analyst with LMC Automotive, said consumers may perceive the spate of recalls — which, to a far lesser degree, has also involved other automakers — as the company openly trying to correct its problems.

"This feels like the opposite of what you might expect," Schuster said. "It is almost as if the industry and GM, in particular, has taken responsibility for the situation. I think there is a feeling out there that they are being responsible, doing the right thing and trying to fix the situation."

Contributing: Washington Post, Associated Press

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