Dealers to GM: Fix advertising

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A group of General Motors Corp. dealers has drawn up its own agenda to improve the giant automaker's marketing in the wake of declining market share.

The group was tentatively scheduled to meet with top GM executives on Friday, Advertising Age has learned. It couldn't be learned if the meeting actually took place; at press time GM put an embargo on any comment about it.


The group organized under the auspices of the National Automobile Dealers Association. Lou Kairys, NADA's chairman of industry relations, said the group wouldn't reveal its proposals until GM had a chance to react.

He did confirm, however, that they center on marketing.

The dealers, smarting over recent glitches in GM's regional ad reorganization, are believed to be seeking input in early stages of ad campaigns and new-vehicle programs. They have at times been left uninformed about breaking ad campaigns, some dealers said.

Dealers are suggesting several initiatives, ways to improve "timeliness of product" and GM's vehicle-ordering system, Mr. Kairys said.

Mike Morrissey, NADA media relations director, said 50 GM dealers representing a cross section of its car brands met in late July after frustrations about GM had erupted at an NADA board meeting.

He described NADA's subsequent role as "almost like a peace process that we're going through here."

In a year when automakers seem headed for record sales, GM car sales are up only 2.7% for the first six months, and light-truck sales are off slightly, according to Automotive News. Key divisions such as Chevrolet and Cadillac have posted sales declines.

Although it earned a record $1.7 billion in second-quarter net income, GM has seen its U.S. light-vehicle market share fall from 31.6% to 29.5% in the past year. In June, however, it did edge up over the 30% mark.


"I don't think it's any surprise that GM dealers have quite a few concerns," Mr. Morrissey said, adding that at the July meeting "people vented their frustrations on a variety of issues."

But the group decided to work constructively with GM rather than attacking programs or individuals. The dealers' proposals represent issues on which the group reached consensus.

GM's decision to move advertising from local dealer groups to regional field offices has cost it "hometown input," Mr. Morrissey noted.

The controversial policy also has spawned lawsuits by dealer groups in Chicago and Indianapolis over advertising fees.

Dealers feel GM tends to present vehicle programs and ad campaigns after it's too late to make substantial changes.

Frank Ursomarso, of Union Park Pontiac-GMC in Wilmington, Del., said the field-staff reorganization has caused communications gaps.

Regional offices lacked information about past ad buys, he said, and they were slow to set up dealer advisory councils and failed to tell dealers about new advertising.


"The first time a dealer would know about an ad would be when he would open up the newspaper," Mr. Ursomarso said. "You had a period of time from about January to late June when things were a work in progress."

James Hall, VP-industry analysis for consultancy AutoPacific, said the field reorganization and its resulting confusion resemble GM's 1984 reorganization into multidivision groups.

"They're changing so much at one time and they're doing it on this giant scale, which theoretically is good," he said. "It's a classic example of trying to impress Wall Street and forgetting about business."

GM has been "very receptive," said Mr. Kairys, whose Lustine Automotive Group is in Woodbridge, Va., and includes GM brands. "We haven't approached them in a wrongful way."

Contributing: Alice Z. Cuneo

Copyright August 1999, Crain Communications Inc.

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