Although GM won't discuss its plans, the company is known to be looking for ways to temporarily dilute demand and deflate soaring prices for the Corsa subcompact. Its ad urging patience didn't seem to help.
In the highly unusual $1.5 million TV campaign, GM VP Andre Beers gives the testimonial genre a new twist. "I've been working for General Motors do Brasil for 42 years," Mr. Beers says into the camera in the commercial by GM corporate agency Colucci & Associados Propaganda. "I took part in its most important launches, from the Opala to the Omega and the Vectra. I know how the market behaves when a new model is launched. [But this] response is something different. The demand for Corsa has gone beyond our expectations."
He continues: "By the end of this year we will be producing 80,000 units, and in 1995, between 130,000 and 150,000. ... So please, don't be in a hurry. Keep the price of Corsa a fair one."
The spot ran only one day, March 30, leaving GM to weigh its next move. An investigative news piece in early May by a local TV station found dealers still quoting prices of $10,500 for the list price $7,000 car to reporters posing as car buyers.
Asked whether the ad will run again, Jens Olesen, McCann-Erickson Worldwide exec VP and president of the local office handling Corsa, said, "Who knows? It will depend on the market."
By most accounts, the Corsa shortage is no publicity stunt. "[The shortage] is genuine," said Vicente Alessi, director of AutoData/AutoResearch, an automotive industry consultant here.
Heavy demand, fueled by GM's extraordinarily high original $10 million in ad spending and Brazilians' mania for the model's breakthrough design, are forcing up prices outrageously. Fanning the flames was GM's decision to roll out its car early to beat competitor Volkswagen Gol. But the rollout began before GM had sufficient production facilities in place.
GM, said Mr. Alessi, couldn't have waited longer to introduce the Corsa "because they had pulled their old [popular price] model, the Chevette, back in the last quarter of 1993 and needed to have another model in that segment."
GM declined comment. As a result of the shortage, unscrupulous dealers and middlemen hoping to make a fast buck are jacking up prices by anywhere from $2,000 to $4,000 over the auto's $7,350 sticker price. Meanwhile, GM's 3,000 cars per month production is woefully short of demand, now at 10,000 per month, and the company is pocketing only the factory price.
GM is the second-largest car marketer in Brazil, selling 217,714 million cars in 1993, well behind Autolatina's Volkswagen division's 325,629, according to the National Association of Automotive Vehicle Manufacturers. Fiat comes in third with sales of 209,071 cars. Popular price cars like Corsa accounted for 40% of the total 869,170 car market as of last month.
Since it's not expected out until September, Gol's strategy and advertising remain zealously guarded by its agency Almap/ BBDO. GM also beat out Fiat's updated Uno Mille ELX model, introduced last month with a TV campaign using a lifestyle ad approach and rap music from MPM Lintas Communicacoes.
Another other major reason for the passion for Corsa is the car itself, truly revolutionary by Brazilian standards. Its one-liter fuel injected engine is a first as are many standard features, commonly offered as extras such as a passenger side view mirror.
GM also whipped up desire for Corsa's new generation design in a $10 million ad campaign, GM's highest budget in two years. The humorous TV ads, started in February, have registered high recall with an old codger repeating the refrain: "What is this world coming to?" in his bewilderment over the model's state of the art design. The four :30 spots each focus on one major feature of the car: Its low price, its European design, its large variety of color choices and its modern engineering.
But GM's strategy of tempering demand isn't likely to work. After demand tightened at the beginning of April, GM cut back ads for Corsa only 30% by substituting spots for its other cars, according to Percival Caropreso, McCann general manager and executive creative director.