GM to stick with marketing plan despite recall


DETROIT — General Motors, under siege for the recall of 2.6 million small cars with defective ignition switches, will not change the strategy for selling its current lineup of new cars and trucks.

The recall, which began in February and was expanded last month, is the company’s largest crisis since it emerged from bankruptcy in 2009.

While GM’s U.S. market share has declined 2.3% for the first three months of this year, it’s too early to say that the recall is hurting sales of its newest models. GM’s sales rose 4% in March from a year earlier, well above analysts’ expectations and better than Ford’s 3.3% increase.

Congress, the National Highway Traffic Safety Administration and the U.S. Justice Department are investigating how early GM learned of the flawed ignition switches and why there was no recall earlier.

Tim Mahoney, chief marketing officer and global Chevrolet and global GM marketing operations leader, said the automaker is not spending more on advertising or incentives than previously budgeted and isn’t likely to change that strategy.

“There are really a lot of positive things happening, and it is really about staying focused on the product,” Mahoney said.

Chevrolet already has a commercial with a safety message called “The New Us.”

“There is not going to be a specific recall ad,” Mahoney said. “We are coming at it from the models, and all of the new products we have introduced recently.”

GM CEO Mary Barra has apologized to customers during congressional testimony and in other forums. GM is reluctant, however, to incorporate an apology into its marketing.

Mahoney also said GM doesn’t plan to advertising directly to owners of Chevrolet Cobalts, HHRs, Pontiac 5s, and Saturn Ions and Skys to buy new vehicles as Toyota did when it recalled millions of vehicles amid concerns about unintended acceleration in 2009 and 2010.

“At some point, perhaps, that is a possibility,” Mahoney said. “We are offering some incentives for people who want to trade up. But that’s a fine line you have to walk.”

GM is offering a $500 incentive to owners of the recalled models that they can apply toward the purchase or lease of a new GM vehicle.

Chevrolet and GMC likely will spend more marketing money and energy on its full-size pickups and SUVs this year. In March, Chrysler’s Ram pickup outsold Chevrolet Silverado for the first time that anyone in the automotive industry can remember.

Mahoney said he is not concerned about Ram’s market share gains.

Chevrolet is reducing incentives on Silverado while Ram has been offering bigger rebates and discounted financing.

In March, Ram’s pickup incentives increased 12.5% from a year earlier to an average of $4,769, according to Incentives for Silverado, meanwhile, were $4,180 or 30% lower than March 2013.

“When you start hearing things like that, it’s a sure sign that you are getting ahead,” said Reid Bigland, Chrysler’s head of U.S. sales and the Ram brand



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