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GM OPENS USED-CAR REVIEW;ONLY ONE ROSTER SHOP INVITED TO PITCH POTENTIAL $75 MIL ACCOUNT

By Published on .

General Motors Corp. is reviewing a select list of agencies for a certified used-car account that could grow to billings of $75 million over the next few years.

In an unusual move for the nation's third-largest advertiser, GM has invited only one roster shop to compete for the business; the auto marketer plans to narrow the list within weeks to two or three shops and hopes to pick a winner shortly after.

GM's North American Oper-ations unit sent requests for proposals to seven or eight agen-cies, including N.W. Ayer & Partners; Jordan, McGrath, Case & Taylor; and Kirshenbaum Bond & Partners, all New York; Campbell Mithun Esty, Minneapolis; Mul-len, Wenham, Mass.; and Tracy-Locke, Dallas.

Ayer is the only contender currently on GM's roster, handling some corporate advertising.

AGENCIES ARE SALIVATING

A GM account review is a rare thing, so agencies are salivating at a chance to get the business. In recent years, GM has awarded new accounts to agencies already on its roster. When the auto marketer introduced its GM Card, it tapped the Troy, Mich., office of McCann-Erickson Worldwide and the Bloomfield Hills, Mich., office of D'Arcy Masius Benton & Bowles. McCann handles GM's Buick and GMC brands. DMB&B handles Cadillac and Pontiac.

GM REVIEWS RARE

GM last awarded a major piece of new business in 1988, when Hal Riney & Partners, San Francisco, got the Saturn account. The last major review began four years ago, with Leo Burnett USA, Chicago, retaining the Oldsmobile account.

Dean Rotondo, communications manager for North American Operations, confirmed the review for the new business unit, but declined to discuss details.

"We are looking for an agency with a strong history of brand management, a strong retail background and a strong portfolio of commercials," he said.

GM is preparing a national rollout of its certified used-car program in an attempt to keep its dealers competitive with used-car chains like CarMax and AutoNation. Those start-ups are expected to spend upwards of $75 million each on advertising annually after their national rollouts.

GM started its pilot program early this year in Las Vegas and Atlanta. McCann's Troy office handled, since Buick was the lead division on the test there.

Cadillac and Saturn already have certified used-car programs at their dealerships and won't participate in the national program.

100 DEALERS SIGNED

GM's regional staff is currently explaining the voluntary program to dealers and has signed more than 100 dealers, a spokesman said. The national program, he added, should kick off early next year with branding that includes unified signage at the dealerships.

The program will take only GM cars with less than 60,000 miles, giving them a 12-month or 12,000 mile warranty.

The pilot program proved the certified label "is a strong selling point," the spokes-man said.

"There is competition from the used car dealerships," he said. "That's why we're doing it. We think we can do it better."

TOUGH JOB FOR GM

GM will have a tough job, according to a study by J.D. Power & Associates. The marketing research company said last month that consumers indicated they are more satisfied buying a used vehicle from an independent used-car retailer than from a new-vehicle retailer. The researcher also reported that the average price of a used vehicle at an independent dealer is about 18% less than at a new-vehicle dealership.

Contributing: Scott Donaton

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