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According to Lutz, the road back starts with compelling cars that have high value. "The only way we can do it is to produce really compelling cars and offer them at high value. That means creating new, exciting vehicles. But it also means buying back brand equity by putting massive amounts of money behind each brand, meaning rebates, interest rate deals, expensive marketing like overnight test drives. That means sacrificing unit profits by somewhat underpricing them to entice people back to GM."
"It's more important to sell cars and gain market share than to reap higher margins per unit," Lutz explains. "If we could sell out a new Buick like LaCrosse, (the new replacement for the old Century and Regal coming this Fall) with no incentives and take a $2,000 lower margin on the car but in exchange for that lower margin sell out the plant, that would be a really good deal. We'd take that one in a heartbeat."
"Most renowned professors of marketing will tell you that when a brand starts going downhill it's a terminal situation and you should not pour money into that brand anymore because there's no way that you can turn it around. The buzz is gone and the generation that bought it is gone," says Lutz.
"But automobiles are a highly visible product.Everyone is interested in the new stuff so no matter how dented your image may be, if you do a truly sensational car, people will notice it and say, 'Holy Mackerel, if they ever built that Pontiac Solstice, I might buy one.' Once you open their mind to one vehicle in the brand, it means you've opened their minds to the whole brand."
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