Oldsmobile Tries to Woo Buyers With New Program
LOVE it or leave it. Oldsmobile is hoping that's an offer potential buyers will find too good to refuse. As part of its new ``Oldsmobile Edge'' customer-satisfaction program, the General Motors division will permit dissatisfied buyers to return their cars to the dealership within the first 30 days or 1,500 miles for full credit toward another Olds. Though other GM divisions have experimented with similar return programs in the past, this is by far the most comprehensive in the industry, covering every 1990 Oldsmobile.Skip to next paragraph
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There are two other elements to the Edge, including a three-year, 50,000-mile bumper-to-bumper warranty with a $100 per visit deductible after the first year. During the warranty period, Oldsmobile will also provide customers with 24-hour roadside assistance, including a trip-interruption program covering an owner who might otherwise be stranded overnight more than 150 miles from home. According to Michael Losh, the division's general manager, ``We've got to stand behind our products. Customers expect that more and more every day.''
Oldsmobile executives say their willingness to offer the new program, particularly the car-swap guarantee, results from a growing confidence in division products, which had suffered from quality-control problems in recent years.
Mr. Losh says only about 0.5 percent of Olds buyers actually returned their cars during a test of the program, and ``half of them come back because they decided they needed a bigger car, a smaller car, or maybe a four-door'' instead of a coupe. The others returned their cars because of mechanical or other product problems.
Critics point out that a customer can only swap for another Olds. Might Oldsmobile eventually go the logical next step and offer a dissatisfied buyer his or her money back? Losh will only say ``that's under consideration.''
Although the Oldsmobile Edge seems to signify a growing self-confidence on the part of the upscale GM marketing division, some observers also view it as a sign of desperation.
One of the nation's first automobile companies, Olds reached its peak during the 1984 model year, selling nearly 1.1 million cars giving it a 10.7 percent share of the United States new car market.
Since then, sales have plunged dramatically. When the 1989 model year ends Sept. 30, Olds is expected to have racked up sales of only 640,000 cars, equal to a 6.3 percent share.
Industry analysts say several factors hurt Oldsmobile. In the early 1980s, GM was forced to downsize its vast product lineup. To save money, it gave its five car divisions vehicles that were virtual look-alikes. GM's upscale divisions, particularly Oldsmobile and Buick, were hardest hit because in the minds of potential customers they lost distinctive identity.
Younger buyers, especially, turned away in droves, opting instead for the increasingly prestigious offerings from Japan and Europe. As a result, the age of the average Olds buyer has been rising, and is now 51 years old.
To bring that figure down, the division launched an advertising campaign last year with the theme ``This is not your father's Oldsmobile. This is a new generation of Olds.''
Clearly, Losh says, advertising themes can do only so much for the division. ``We're going to have to do it with product,'' he admits.
Yet the product seemingly most suited to a new generation of Olds buyers, the aerodynamically styled Cutlass Supreme coupe, has failed to win many of its target buyers. Olds hopes to do better in 1990 with a four-door version.
Another critical piece in the new Olds strategy is the Silhouette, the division's first light truck in more than 60 years. The minivan would seem at first glance to be a perfect fit for the aging Baby Boomers whom Olds is targeting.
But analyst David Healy with Drexel Burnham Lambert Group wonders if Olds will be able to sell the Silhouettes, considering it will again be saddled with a vehicle that is no different from those sold by its sister GM divisions.