WAGONER AND LANEVE TO REVAMP GM MARKETING!

From Automtive News---April 11, 2005

DETROIT -- In the wake of a top-level executive shuffle at General Motors, two things appear clear: GM Chairman Rick Wagoner has a new mission - and a new best friend. In a wide-ranging interview with Automotive News, Wagoner criticized GM's recent marketing efforts six times.

Now that Wagoner has put himself in charge of GM North America, he is counting on Mark LaNeve to sell more cars. LaNeve is GM's newly installed vice president for vehicle sales, service and marketing in North America. Asked how closely he planned to work with LaNeve, Wagoner smiled and replied: "Like a brother."

After Wagoner's announcement, media reports focused on the new roles to be played by Robert Lutz and Gary Cowger. Lutz will coordinate global product development, while Cowger - who relinquished his duties as president of GM North America - will coax the UAW to help control health care costs. (See story on Page 51.)

But GM's immediate concern is marketing. As one-size-fits-all factory incentives lose their appeal, GM has lost market share. Now it's up to La-Neve to prop up sales long enough for GM to solve its long-term problems. That won't be easy, Wagoner admitted. "Put very bluntly, the marginal return from a dollar of incentives has clearly gone down." Wagoner said GM's marketers must:
Establish stronger brand identities.
Improve advertising, which Wagoner said has been mediocre for some brands.
Limit the overuse of promotional incentives.
Set sticker prices closer to transaction prices.

" LaNeve arrived in time to lead Cadillac's resurgence with a revamped product lineup. Now Wagoner wants him to revive GM's other brands. To do so, LaNeve will rely heavily on Brent Dewar, GM's new North America vice president of marketing and advertising. Dewar holds La-Neve's old job, and he will report to LaNeve. Dewar, a 49-year-old Canadian, spent the last two years as divisional manager of Chevrolet, where he introduced "An American Revolution," the largest advertising campaign in the division's history.

With LaNeve's assistance, Wagoner hopes to generate substantial sales growth with Cadillac and Chevrolet. "It is very important that we keep our strong brands strong and grow them," Wagoner said. "(You must) make sure you play hardest on your strongest horses. So we are going to do that."

As vice president of vehicle sales, service and marketing, Mark LaNeve will help GM rebuild sales. Meanwhile, Wagoner will revive Pontiac and Buick by eliminating overlapping products. GM will encourage dealerships to put Pontiac, Buick and GMC under one roof "without forcing us to do a lot of me-too badge products to ensure the distribution channel can survive," Wagoner said. "Mark LaNeve has been saying lately, 'I'd rather have three or four real good Pontiacs than seven or eight so-so Pontiacs.'"

But Wagoner admitted that eliminating nameplates could hurt sales of single-brand dealerships. "In certain smaller markets, can you make a business if you've only got three or four Pontiacs? Might be tough," Wagoner said. "It's better to have Pontiac-Buick-GMC selling out of the same store. We're telling dealers we'd like to do that, and to the extent we can facilitate it, we are."

"We have to have our retail business while improving our brands. I'll be attempting to balance the marketing and sales side of the business."

To do that, LaNeve will promote leasing, and GM already is experimenting with new leasing programs. Last week, GM introduced a regional leasing promotion that allows customers to return the Pontiac G6, Chevrolet Cobalt or Buick LaCrosse cars if they are not satisfied.

The pilot program, called Freedom Lease, runs through June in California and the Northeast. Customers who lease one of those cars can return it without further obligation if they drive less than 12,000 miles. Given all the changes in recent months, one might be forgiven for thinking that GM needs a complete overhaul. That's not quite true, Wagoner said. "I think our basic strategy has been pretty good," he explained. "What we need to do is really improve our effectiveness on the sales and marketing side of the business. We need to keep doing what we've been doing, but faster."