Wednesday, October 28, 2009

Why GM Will Never Overtake Toyota Unless They Start Making Hovercraft

This is a little mock advertisement I put together to sort of illustrate what I talk about in this post. It's not very professional since it's on a 0-dollar budget but you get basically what it's supposed to get across:

General Motors was a humble little start-up in Flint, Michigan back in 1908. Not even founder William C. Durant could have predicted that it'd climb to such heights. Throughout the 20th century, it gained a reputation in the United States, as maybe the best practical car around. And even as the 21st century dawned, GM still held the lead in annual sales. Nobody could have predicted that it would have fallen this hard back in the glory days of the mid-1900s. However, since the late 80s, disaster had been knocking on the auto giant's door, and finally it grew big enough to shoot GM down.
But after filing for bankruptcy, the company is making an honest effort to re-gain its footing on the automobile market. Determined executives are calling it the "re-invention". But they are still refusing to look up to their Japanese counterparts, not willing to damage their sensitive ego. Let's face it though, GM will never get past Toyota ever again as long as cars are the prime mode of transportation. I think most average Americans have realized the Harvard executives at GM can't seem to grasp it.
However, I don't mean to convey that GM should admit defeat and just shut down. They don't even have to tangibly admit defeat. But they do have to stop trying to be number one and start trying to be number two.
I know that sounds odd to you. But look at the auto sector as a race on a sheet of ice. GM had been gliding along nicely as the leader for almost a century but then suddenly, it slipped and fell. So Toyota and a few other brands retained their pace and sped ahead. Once GM got back up, they were quite far from the lead position. On the other hand, now they're trying to run at full speed to try and catch up. That's not going to work though running to fast on ice is just going to make you fall again. GM just has to maintain a steady sustainable pace that won't make them fall down but allow them to remain a contender. Here's why.
If you took a poll of every American driver, and I'm sure plenty of agencies have already done so, it's most likely that a majority will consider Toyota the leader in fuel efficiency, value, environmental issues, service and practical performance. These are aspects that GM owned for the past few decades but has been taken away from them. However, GM is outraged over this fact and its inflated ego is telling it to try to snatch all these things back. But common sense and the marketing knowledge, that I know they have, is telling them to project themselves as something that Toyota is not, even the opposite. You're probably thinking, "Well, they can't say they damage the environment, are too expensive, are not fuel-efficient at all and make bad cars." I agree, they can't. But what else do analysts talk about and label Toyota when they continuously assert its excellence? They say that Japanese cars are this and Japanese cars are that. That's the key word, Japanese. But I'm not telling GM to start discriminating against the Japanese, I'm saying for them to advertise the fact that they're American and if you're a real American, you'll buy GM.
Now, I'll admit: A lot of people aren't about to buy a car that they think isn't very good just because they think it'll make them a better American. Then again, there are plenty of people who value this image of patriotism. A 4th generation American is going to be very upset if they feel any less American than anybody else; they'll but a GM. How about companies that want to seem genuinely American; they might use GMs for any transportation needs. These demographics aren't going to allow GM to re-gain top spot but they will allow GM to re-gain its status as a successful company. And research has shown that people prefer to buy from successful companies so who knows what will come of a simple step in the other direction?
Nobody can claim that they're more American than GM but there are plenty of companies who can claim that they make better cars. And maybe GM does make better cars but in the end, its about who the consumer thinks makes better cars.

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