GM Shopper Appeal Not Waning Despite Recalls
Even as liability proceedings regarding the automaker’s ignition switch recall unfolded Friday afternoon in a U.S. Bankruptcy Court in Manhattan, analysis from both Kelley Blue Book and Edmunds.com show that shoppers don’t appear to be shying away models from General Motors.
New survey data of Kelley Blue Book website users indicated only 5 percent of new-vehicle shoppers say the recent GM recall caused them not to consider purchasing a Chevrolet, Cadillac, GMC or Buick model.
“Shoppers are willing to forgive, but not forget,” KBB analyst Arthur Henry said. “Most likely, GM is maintaining its shopping traffic on KBB.com from buyers who are looking to capitalize on any deals that may be offered or because none of the current recalled vehicles are a part of manufacturer’s current product portfolio.”
KBB broke down the percentage of new-car shoppers who remembered a recall by brand. The results went as follows:
—Toyota: 48 percent
—General Motors: 40 percent
—Chevrolet: 38 percent
—Ford: 11 percent
—GMC: 9 percent
—Honda: 8 percent
—Chrysler: 7 percent
—Tesla: 4 percent
—Jeep: 4 percent
—Saturn: 3 percent
—Buick: 3 percent
—Nissan: 2 percent
—Pontiac 2 percent
While shoppers are aware of major recalls on Toyota and GM models due to their publicity in the media, analysts pointed out consumers are still shopping those brands on KBB.com.
Chevrolet’s traffic on KBB.com grew 25 percent year-over-year and the brand saw a short-term dip of 14 percent from December to April, which KBB said can be attributed to news of the recall.
KBB senior analyst Karl Brauer explained this trend confirms Chevrolet is benefitting from recent high-profile vehicle launches, including the all-new 2014 Corvette, Impala and Silverado. Brauer added these models are helping the automaker remain top-of-mind among shoppers despite recalls on older, discontinued models.
“Whatever negative connotations GM has suffered from the recent recalls is minor when compared to the growing consumer interest the company has generated with its current line of compelling product,” he said
Even though Chevrolet is maintaining its overall stride in KBB.com share of traffic, the perception of Chevrolet’s reputation has declined from the first quarter of 2013 to the first quarter of this year, sitting below the average among non-luxury brands like Honda and Ford, according to survey data.
“This further suggests consumers are being won over by Chevrolet’s existing model offerings, regardless of the latest hit to its reputation,” Brauer said.
Meanwhile, Edmunds.com uncovered similar consumer trends when analysts reviewed traffic on their website.
A review of shopper consideration on Edmunds.com determined that the recalls have had very little — if any — impact on GM brands. A week-by-week comparison can be found below:
Make | 1/5/2014 | 1/12/2014 | 1/19/2014 | 1/26/2014 |
Buick | 1.5% | 1.5% | 1.6% | 1.6% |
Cadillac | 2.1% | 2.2% | 2.4% | 2.2% |
Chevrolet | 8.2% | 8.8% | 9.7% | 9.5% |
GMC | 2.4% | 2.4% | 2.4% | 2.5% |
Make | 2/2/2014 | 2/9/2014 | 2/16/2014 | 2/23/2014 |
Buick | 1.5% | 1.6% | 1.7% | 1.7% |
Cadillac | 2.3% | 2.6% | 2.2% | 2.2% |
Chevrolet | 9.2% | 9.1% | 9.6% | 9.4% |
GMC | 2.3% | 2.4% | 2.5% | 2.6% |
Make | 3/2/2014 | 3/9/2014 | 3/16/2014 | 3/23/2014 |
Buick | 1.7% | 1.6% | 1.6% | 1.7% |
Cadillac | 2.1% | 2.1% | 2.0% | 2.0% |
Chevrolet | 8.9% | 8.7% | 8.3% | 8.3% |
GMC | 2.3% | 2.3% | 2.2% | 2.1% |
Make | 3/30/2014 | 4/6/2014 | 4/13/2014 | 4/20/2014 |
Buick | 1.7% | 1.5% | 1.6% | 1.6% |
Cadillac | 1.9% | 1.9% | 2.2% | 1.8% |
Chevrolet | 9.1% | 8.7% | 9.3% | 8.7% |
GMC | 2.2% | 2.2% | 2.1% | 1.9% |
Make | 4/27/2014 | |||
Buick | 1.6% | |||
Cadillac | 1.8% | |||
Chevrolet | 8.3% | |||
GMC | 2.0% |
“This analysis shows that shoppers continue to consider GM models at about the same level as before news of the recalls broke,” the Edmunds analysis said.
Legal Proceedings
Meanwhile, GM’s legal team was engaged on two fronts on Friday.
The automaker’s counsel participating in a proceeding in front of the same judge who oversaw GM’s bankruptcy in 2009. Judge Robert Gerber is now considering whether the automaker committed fraud in not disclosing potential awareness of ignition problems in discontinued models, allowing civil suits from more than 100 law firms to push forward.
At the same time, Bob Hilliard, a Texas lawyer and one of the nation’s key players in the pursuit of claims against GM, attended what he described as a requested “settlement meeting” with GM’s compensation attorney Kenneth Feinberg in Washington D.C.
During the full-day meeting, Hilliard, who represents 53 families who claim to have lost loved ones due to GM’s ignition switch as well as 273 injured victims, said he discussed with Feinberg full resolution of all claims.
“My numerous clients include those who have suffered serious injuries or the loss of loved ones. Each individual investigation has confirmed the accident scenario was caused by the defect in the GM vehicle,” Hilliard said.
Newest Recalls by Cadillac & Honda
The National Highway Traffic Safety Administration shared details about the newest recall coming from GM.
The automaker is recalling 50,571 Cadillac SRX vehicles from the 2013 model year. These units manufactured from May 29, 2012, through June 26, 2013, and are equipped with 3.6-liter engines.
“In the affected vehicles, in certain driving situations, there may be a three- to four-second lag in acceleration due to the transmission control module (TCM) programming,” NHTSA officials said.
“A three- to four-second lag in acceleration may increase the risk of crash,” they continued.
GM told NHTSA it will notify owners, and franchised dealers will reprogram the transmission control module, free of charge. The manufacturer has not yet provided a notification schedule.
In the meantime, owners can contact Cadillac customer service at (800) 458-8006 and reference recall No. 14132.
Furthermore, American Honda also announced a recall. Honda will voluntarily recall 24,889 Odyssey vehicles in the U.S. and another 1,501 units in Canada from the 2014 model year
OEM officials explained the recall stems from the need to replace the shorting coupler, an electrical component in the side curtain airbag system. The repair will be made free of charge.
“During assembly of the electrical coupler for the side curtain airbag on the passenger's side of the vehicle, it is possible that the shorting terminal, which is used to prevent deployment of the airbag before it is assembled into the vehicle, may have been damaged,” Honda said.
“A damaged shorting terminal may illuminate the Supplemental Restraint System (SRS) indicator as well as prevent the side curtain airbag from deploying during a crash, increasing the risk of injury,” the automaker continued. “No crashes or injuries have been reported related to this issue, which was discovered through warranty repairs.”
Honda is announcing this recall to encourage all owners that purchased an affected vehicle to take it to an authorized franchised dealer as soon as they receive notification of this recall from Honda.
Mailed notification to customers will begin on May 16.
In addition to contacting customers by mail, at that time, U.S. owners of these vehicles will be able to determine if their vehicles require repair by going to www.recalls.honda.com or by calling (800) 999-1009, and selecting option No 4.
Owners of these vehicles in Canada will be able to determine if their vehicles require repair by going to www.honda.ca/recalls or by calling (888) 946-6329.