GM's LaNeve says automaker will sell product, not price
By JAMIE LAREAU | AUTOMOTIVE NEWS
| Published 01/31/06, 4:57 pm et
DETROIT -- General Motors' Mark LaNeve has been vice president of vehicle sales, service and marketing for 10 months now. He seems relaxed in his office on the 39th floor of the Renaissance Center here, but closer scrutiny reveals bloodshot eyes and exhaustion in his voice.
LaNeve wants to promote a "product" message rather than the deal of the day. To do so, GM has lowered the sticker price on 80 percent of its lineup by an average of $1,300 per vehicle.
LaNeve and his team visited 24 cities in six business days to explain GM's new pricing strategy to dealers. He discussed the strategy during a Jan. 20 interview with Editor David Sedgwick and Staff Reporter Jamie LaReau. You just finished a 24-city tour to meet with dealers. How are dealers reacting to this latest pricing strategy?
It felt as good to them as it did to us, based on their reactions and questions. It's what they've been encouraging us to do. … We want to get our product message out.
There has been a lot of negative talk about GM. How do you change the message and get people to focus on the product?
That's another reason why we felt we had to go to market this way. From a tactical basis it'll be: Here's a Chevy Cobalt, here's why it's better and here's the price advantage. That's a way to cut through some of the negative atmosphere as opposed to a big incentive. (Incentives) just send a distressed message like: "These guys are really in trouble, look what the hell they're doing."
The new Chevy ads just talk about prices. There wasn't much talk about the product yet.
No, but there will be. Phase One was just: More Americans chose Chevy than the other brand. Phase Two is: We've lowered all our prices. Phase Three will get into quite a bit of specificity.
What keeps you awake at night?
I worry about fluctuating fuel prices because the line between supply and demand is pretty narrow. But I don't worry about the real strength of our product program. I don't worry about the ability to differentiate eight different brands.
The idea behind value pricing is that it works best when there is a new product that has some excitement behind it. Older products require incentives. So you can't eliminate all incentives right away. Do you agree?
I would agree that you are more prone to have incentives the older the product is, unless the product is just smoking hot. We plan for that, and I don't think any of that changes with what we just announced.
Coming out of the GM Employee Discount for Everyone sale last summer, you knew there'd be a sales drop-off. But the size of the drop in October had to be a shock.
Yeah, well we didn't know we'd get two hurricanes and a $1 spike in gas prices and spot shortages. It was a bad month, and it set us back.
Does Pontiac need a Firebird?
Any kind of a rear-drive, performance-oriented vehicle is something we should look at for Pontiac. Whether it's a coupe or sedan, that remains to be seen.
Wouldn't it compete with the Chevy Camaro if GM builds that?
I'm not speculating on any of that, but a rear-drive performance-oriented product would be a good fit for Pontiac.