New GM, Toyota Marketing Campaigns Highlight Credit Availability
By Michelle Krebs October 16, 2008By Dale Buss
Has the auto industry tanked mainly because consumers can't get credit, or because they just don't want to buy a vehicle right now? With new marketing campaigns that highlight loan availability, General Motors and Toyota aren't waiting for the debate to be settled.
In radio, newspapers and digital advertising that breaks today, GM is launching a program called "Financing That Fits" to highlight the fact that worthy consumers can still get car loans through its dealerships. As part of the initiative, GM is repackaging a six-year-old online database as a way for its dealers to help willing buyers find financing while they're still in the showroom. It is also reminding consumers that it is offering zero percent financing or up to $6,000 cash back on most of its 2008 models.
Meanwhile, Toyota Motor is launching a new, $250-million marketing and sales campaign to lure consumers back to its own dealers. It is touting new zero percent financing on 11 vehicles, including its staple midsize Camry and compact Corolla sedans -- both of which have fared relatively poorly in recent sales reports despite their fuel-efficiency.
GM is firing the Financing That Fits broadside because of "the crushing onslaught of negative financial reporting that has contributed to a growing paralysis in consumer confidence," said spokesman John McDonald. "People believe they can't finance a new car or truck -- and that's simply not true.
"We hope it builds awareness there is available financing and credit out there for folks who want to buy a new vehicle."
Toyota is trying to send the same message. "There is a perception that because of upheavals in the financial markets that financing isn't available," Bob Carter, group vice president at Toyota Motor Sales USA, told The Wall Street Journal. "There is a perception that leasing isn't available. Neither is true for Toyota.""
Self-Correcting
Meanwhile, Toyota Motor is launching a new, $250-million marketing and sales campaign to lure consumers back to its own dealers. It is touting new zero percent financing on 11 vehicles, including its staple midsize Camry and compact Corolla sedans -- both of which have fared relatively poorly in recent sales reports despite their fuel-efficiency.
But even GM itself has fed the opposite impression. Its GMAC financing arm tightened up lease eligibility last summer. And at the beginning of this week, GMAC further stiffened its standards, announcing that it would issue loans only to buyers with credit scores of at least 700; that level would exclude about 42 percent of U.S. consumers.
"People hear that and say, 'I'm not even going to bother going to a dealer, because I may or may not have a credit score for that situation," said John Sternal, vice president of marketing communications for LeaseTrader.com, a Miami-based outfit that matches lease-holders with consumers who want to take over the remainder of a lease on a particular vehicle. GM "is kind of shooting themselves in the foot."
The automaker moved to shield its own creditworthiness after Wall Street ratings agencies continued to downgrade GM's debt and financial prospects in the wake of the ongoing mess in the markets. And GMAC has been dragged down by the national housing meltdown because it has been a mortgage lender as well -- unlike, for instance, Ford's finance arm.
"There's been a lot of attention to GMAC, but it's a different story with our dealers," said Meredith Libbey, spokeswoman for Ford Motor Credit.
And, by contrast as well, Toyota's new campaign attempts to leverage its very strong corporate cash position compared with the Detroit Big Three. Of course, Toyota's unprecedented attempt to draw people into dealer showrooms is necessary only because its sales performance so far this year in the U.S. market -- down about 32 percent in September, for example -- makes it look far more like the Big Three than ever.
Iacocca-esque?
Financing That Fits radio spots feature the voice of Mark LaNeve, GM's North American vice president of sales. And while he's not as polished as Lee Iacocca when the former Chrysler CEO urged American TV viewers, "If you can find a better car, buy it," LaNeve's plain-spoken persona serves him well in these ads.
"You may not think so, but right now is actually a great time to buy a GM car," LaNeve said in a rough cut of a one-minute spot that was scheduled to begin airing today. "The truth is, a market like this creates some great opportunities. To get things moving, we've put really great cash back on just about every '08 in stock. And that includes our five hybrids and 17 models we have that get an EPA-estimated 30 miles a gallon or better on the highway.
"However, I know that some of you may be worried about getting financed. That's why we're introducing Financing That Fits. Right now, at GM dealers across the country," customers can get loans or leases "even with little or no down payment for qualified buyers."
McDonald said that GM already had received "good response from the dealers who've heard" LaNeve's star turn on the radio.
Online Ease
The Web-based system is called Route One, and the GM ads make it sound like a new thing. "We're just making it more visible to consumers," McDonald explained.
Dealers enter a credit application once, and it is reviewed by GMAC and as many as hundreds of other lending institutions -- as the consumer chooses -- for the best available financing options.
GM also is expanding sales incentives to its dealers by offering cash bonuses for sales that are financed by lenders other than GMAC. That program began last week, according to Bloomberg News, and includes most 2008 and 2009 models. Dealerships are eligible for as much as $250 in cash incentives for each sale of non-GMAC-financed vehicles, to be divided among sales people, managers and other employees, according to a GM memo to dealers, Bloomberg said.
GMAC accounted for about 20 percent of GM's loans last month after accounting for 43 percent in the second quarter.
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