GMSA takes steps to protect brand and rev up consumer confidence
May 11, 2009
By Roy Cokayne
General Motors South Africa (GMSA) has launched a programme aimed at creating greater confidence in the company and its brands because of the financial problems experienced by its US parent firm and the effect on purchasing decisions of the domestic economic environment.
Malcolm Gauld, vice-president of sales and marketing at GMSA, said on Friday that the GM Total Confidence programme consisted of an extended vehicle warranty from three years, vehicle payment protection and an extension of its roadside assistance programme.
GMSA's investment in the programme was substantial. Gauld said the exact amount was a competitive issue and would not give a figure.
The programme "by default" addressed potential damage to GM's reputation and its brands because of the financial problems of its US parent firm.
Gauld said if there was any reference to the automotive industry on news services CNN or Bloomberg, "somehow our brand is the poster child picture each time", which was affecting GMSA.
The programme would allay those fears, but more specifically would "lighten the load and take some of the potential concern the consumer might have in making that purchase decision for a car because of retrenchment".
The vehicle payment protection insurance provided cover for up to nine months for a two-year period if an individual was retrenched and had purchased any GM brand vehicle between May 4 and July 31 this year, he said.
The extended warranty was a means of GMSA demonstrating its faith and confidence "not only in our product, but the fact that we are here to stay", while the vehicle payment protection provided consumers with peace of mind.
Gauld said the vehicle payment protection insurance provided cover in the event of retrenchment, but not if a person elected to leave his or her current employment or was fired.
It covered only the normal monthly repayment for a vehicle and not a balloon payment in terms of a structured finance deal. Repayments on behalf of consumers stopped once they were re-employed.
Gauld admitted it would be difficult to monitor when a consumer was re-employed, but GMSA had an administrative process to control this. "It relies on an element of good faith contractually, but there are penalties if people step out of that and legally it's fraud."
Gauld said the enhanced roadside assistance was "very comprehensive".
It provided a host of added-value items, such as: repatriation of the vehicle; assistance if a motorist locked the keys in the car; fuel delivery if a motorist ran out of fuel; and the automatic provision of a hire car if the GM car could not be fixed.
However, Steve Koch, the president of General Motors' African operations and GMSA's managing director, stressed on Friday that a Chapter 11 bankruptcy was to protect assets from creditors and was not an insolvency.
Chrysler, one of the big three US car giants, went into a Chapter 11 bankruptcy process at the beginning of this month. General Motors in the US could follow Chrysler if it fails to obtain agreement from creditors on a reorganisation of the corporation.
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