Monday, July 04, 2005
If they were to give a Times Car Company of the Year Award, that is an award to the car company that has been in the media spotlight the most this year, GM would be the hands down winner. The latest GM front page splash? Employee Discounts and the wild success they have been.
Truck sales have seen a 75 percent rise, but car sales only 3 percent. I'm firmly of the opinion that this new sales move is akin to the initial stages of heroin addiction and the medicinal benefit that might bring. Not good. Car sales not going up dramatically means that no matter how cheap they are, people will not buy GM cars. The good news is that GM trucks are of a good enough quality that even in times of high gas prices, people want them if they can get them for a bargain price. The worst news is that gas prices are increasing steadily with no end in sight. Some prominent oil analysts predict 100 dollars a barrel. Uh-oh!
Other companies are planning on jumping on the sales drug addiction. This is important because it will increase sales, but it will tell the industry which products are strong sellers and which are not. Weaknesses in lineups will be magnified. Whatever is a quality product will sell well, whatever is ugly will not.
It is a time of desperation for the auto industry. This sales strategy is a desperate strategy, but it is also a valuable lesson. No matter how cheap you sell it for, if it's ugly and not made well, it won't sell. People will spend more for what they perceive is aesthetically pleasing and what they believe is high quality. This rule could pertain to a lot of products, but for something that is so important to its owner as an automobile, it is crucial to learn.