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KBB Study on GM Recalls: High awareness, low impact

By Matt DeLorenzo on July 31, 2014 10:14 AM
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While 75 percent of new car shoppers identified at least one General Motors' brand in their awareness of recent recalls, that figure hasn't dramatically lessened interest in the automaker's products, according to a recent Kelley Blue Book study. GM's sales have not dropped appreciably in the wake of publicity surrounding recalls involving millions of the company's vehicles.

Brand loyalty may be playing a role in maintaining sales-fully 79-percent of current GM owners said they will consider GM brands regardless of the recalls compared to 51 percent of all shoppers who say the campaigns will not have an effect on their consideration of GM products.  Only 18 percent of the shoppers said they stopped considering GM brands because of the recalls and only 14 percent of current GM owners reached the same conclusion.

Shoppers are mixed in their views of how GM has handled the recalls, with 37 percent agreeing that the company started off poorly, but has gotten better, while 30 percent believe the manufacturer's performance has been poor throughout the whole process. Still, GM needs to do a bit of work on being perceived proactive on the recalls. Only 30 percent of shoppers felt that the company was being proactive and transparent, while 23 percent felt the company wasn't proactive or transparent enough and 47 percent said they didn't know.

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Brand vs. company

A factor working in GM's favor is that most of the stories refer to the corporation rather than to individual brands or models and that many of the models in the ignition switch recall are no longer sold. In fact, from January to April, the number of shoppers who said they would never consider buying from a particular brand actually dropped for three GM divisions (Cadillac from 12 to 9 percent; Buick, 12 to 8 percent, and GMC 10 to 9 percent), while Chevrolet remained steady at 11 percent.

Still, the talk of the "New" GM versus the "Old" GM is making headway, 50 percent of the shoppers believe the company is different from what it was just 5 year ago as opposed to 24 percent who didn't think so and 26 percent who didn't have an opinion. And 39 percent believe GM is building more reliable cars today than they did 5 years ago versus 32 percent who don't think so and 29 percent who have no opinion. Perhaps the most telling figure to come from the study is the fact that only 17 percent of the shoppers identified a friend or family member as directly warning or notifying them about the recalls. For now, the recalls, as big as they may be still pale in comparison to the total number of vehicles on the road and the size of the new car market. The publicity however, is likely to move the manufacturer to quickly address the problems and to use incentives to maintain new car sales momentum.