July 10, 2012 at 11:38 AM ET
Hoping to maintain its momentum as key Japanese competitors recover from last year’s production cuts, General Motors’ largest brand has announced its new Chevy Confidence program which includes a “Love it or Return it” vehicle buy-back guarantee on all 2012 and 2013 models.
The maker is also launching a “Total Confidence Pricing” discount program aimed at clearing out inventories of leftover 2012 models. Most GM plants take a mid-summer break this month to convert production to the 2013 line-up.
“We have transformed the Chevrolet lineup, so there is no better time than now to reach out to new customers with the love it or return it guarantee and very attractive, bottom line pricing,” said Chris Perry, Chevrolet global vice president of marketing.
GM has used buy-back programs before, notably to prop up the Chevy Volt in the months after reports of battery fires threatened to unplug demand for the plug-in hybrid last year. But the breadth of the new program is significant, covering all 2012 and ’13 models.
To qualify, vehicles must be returned within 30 to 60 days, have less than 4,000 miles on the odometer and experience no damage.
The launch of the new Chevy Confidence program comes less than a week after June auto sales were announced – with key Japanese competitors making major gains. Toyota, for example, was up more than 60% for the month and has been steadily regaining market share lost last year when it struggled to keep its assembly plants running after the March 2011 Japanese earthquake and tsunami.
This is a particularly significant year for Chevrolet which is rolling out some critical new products, notably including the new midsize Malibu, which had been making gains against traditionally dominant Asian imports such as the Toyota Camry and Honda Accord.
The challenge for Chevy is to ensure its offerings land on motorists’ buying lists. Research shows that the average car shopper only closely considers two to three vehicles – and for a sizable chunk of the population Detroit products aren’t a factor.
“We know through first-hand experience that once they get behind the wheel of one of our new products, they are more likely to take one home,” said Steve Hurley, co-chair of the Chevrolet Dealer Council.
Along with the buyback program Chevy will institute a no-haggle pricing strategy as part of the new campaign. It hopes that by starting out with good discounts it can convince buyers and dealers alike to avoid the often-frustrating negotiations that are generally seen as the most painful part of buying a car.
That approach could work, suggests Jesse Toprak, chief analyst with TrueCar.com, an auto pricing and data service.
As for the buyback program, Toprak says, “(It) is an indication of how confident Chevrolet is in its’ new product line up. It is a way to get people into showrooms and experience firsthand the significant investments the dealer body has made in the recent years. It is a smart and cost effective program that will work towards diminishing the perception gap of the Chevrolet brand particularly in coastal metropolitan areas where consumers have a stronger preference towards the import brands.”
Chevrolet remains a major force in the U.S. market, its largest, but has become increasingly dependent upon overseas sales. The brand generated 4.76 million sales in 2011 and is shooting for another record this year.
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