Winning customers in cities like Vancouver, Montreal, and Toronto has become a key priority for GM Canada as it looks to rebuild its market share in the aftermath of its restructuring, said Kevin Williams, GM Canada president, in an editorial board meeting with the Financial Post.
Part of GM’s strategy to win over these consumers includes introducing several new city-friendly vehicles in the months ahead, as well as leasing options for those vehicles. But GM’s efforts also include exploring ways to build a dealership presence in the coveted downtown Toronto market, Mr. Williams said.
“We still have a reasonably good footprint in Toronto, with the exception of right in the interior of downtown,” he said. “We’re addressing that issue.”
Mr. Williams said his preferred remedy would be to build a flagship dealership in Toronto.
But the high cost of land also has GM exploring the possibility of joining the six other auto dealers who have committed to a new 10-acre auto complex being built by Shahin Alizadeh, Downtown Automotive Group Inc. chief executive, on the city’s downtown east side by 2013.
Mr. Alizadeh said in an interview he plans to consolidate his existing downtown Hyundai and Toyota dealerships there and expects a decision from GM in the next two weeks.
“The reason none of these brands, despite the might of their brands, have been able to land anything in this market is because they can’t rationalize the square-foot values of land in the core of the city,” Mr. Alizadeh said. His auto complex would cut down on the cost of land to each individual automaker, he added.
Of course, making inroads in Canada’s urban centers will take more than just a dealership presence in Toronto, Mr. Williams said.
Many of these urbanites have a great deal less disposable income than their rural counterparts, and as a result, GM Canada has been at a disadvantage to some of its competitors since it abandoned its leasing services in 2008.
“Other players are playing with their lease payments and being really aggressive with that, and we’ve got one arm tied behind our back,” Mr. Williams said.
To that end, General Motors Financial announced last week it had acquired auto lessor, FinancialLinx Corp. to expand the financing solutions for its customers in cities across the country.
But more important than all of this is having the right product for the market, said Dennis DesRosiers, DesRosiers Automotive Consultants president.
“They’re focused on trucks, and trucks are more of a rural phenomenon,”
That is drastically lower than the 15.4% market share Mr. DesRosiers estimates GM Canada has across the country in the first three months of 2011.
Mr. Williams said, in addition to its recently launched Cruze, GM would be bringing a plethora of product in the months ahead geared toward the urban consumer, including the new Chevrolet Sonic and Spark, and the Buick Verano. The Chevy Volt will also be launched in Canada during the third quarter of 2011 as well, he said.
“The reality is, because of some of the way we went to market in the past with a brand like Chevrolet, we were associated with having great trucks and cheap cars,” Mr. Williams said, adding that there has been a concerted effort to improve the quality of its cars in recent years.
“We devalued the brand, and people thought of Chevrolets as cheap cars,” he said. “Those days are done.”
Source: Financial Times-
Photo:Howard J. Elmer for National Post
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