Retooled GM Retains Trucks and SUV's

June 17, 2009

This is a guest post by Jason Sakurai of EON - Enthusiasts' Online Network, Inc. and Truckworld.com.

General Motors’ focus on four brands -- Buick, Cadillac, Chevrolet and GMC – indicates for the near term that light-duty trucks and SUVs will continue to be a part of the product mix, with new SUVs in the form of a Cadillac SRX crossover, Chevy Equinox compact SUV, and the GMC Terrain compact SUV among six new models announced for 2010.

While touting leading-edge design, technology, engineering excellence and quality in their ‘re:invention’ strategy, GM might see a glimmer of hope in a recent survey from J.D. Power & Associates, entitled “Automotive Emerging Technologies Study”, released this month. The study, which is designed to measure familiarity, interest and purchase intent for emerging automotive technologies, polls consumers before and after an estimated market price is revealed. For example, in the survey, 67% of the 19,249 respondents indicated that onboard navigation systems to guide them to the nearest Starbucks or other destinations were of interest.When the cost of a factory-installed navigation system was revealed at $1,600, interest dropped to 20% overall, while 45% of those who owned premium vehicles still chose the factory onboard systems versus lower cost off-board systems.

Mike Marshall, J.D. Power director of emerging technologies said, “Although the factory-installed options are considerably more expensive than an off-board navigation system, the price difference is not reflected in a proportionate decrease in consumer interest levels. Among consumers who express interest in both types of navigation system, seven out of ten indicate they would choose a factory-installed navigation system rather than an off-board version—despite the cost premium.”Other technologies fared about as well, and among consumers who listen to their portable digital music player in their vehicle, more than one-half use an auxiliary input jack, while approximately 20% use a wireless FM transmitter. Nearly 2/3s of consumers indicate that they would like the ability to listen to a portable digital music player through their vehicle’s speakers, while 27% express a desire to use a smartphone’s music capabilities in conjunction with their vehicle’s audio system.

Among consumers currently utilizing their vehicle’s Bluetooth functionality, initial interest for wireless connectivity in their next vehicle is 68%, compared with just 47% among those who have the feature but do not use it in their vehicle.Premium surround sound systems garner the highest interest rate among near-term vehicle intenders at 72%, while just 61% of consumers who plan on purchasing a new vehicle in two years or more indicate interest in this feature. “Consumers nearing the final phase of the vehicle purchase process are often more well-versed on vehicle options and features than those in the early stages of shopping, and likely have recently researched the available vehicle specifications,” stated Marshall, who added, “The increased familiarity of the possible benefits and conveniences of these technologies may lead to an increase in interest.”

How this bodes for an industry accustomed to making their profit on all the bells and whistles, and GM in particular with a plethora of trim levels and options, remains to be seen. In addition, how does the automotive aftermarket deal with consumers who are increasingly more interested in having the OEMs integrate these entertainment and connectivity technologies into the new vehicles? Time will certainly tell – but that’s one luxury automakers don’t have, and a gamble they can’t afford to take.

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