General Motors: An Innovations Revolution

In this third installment of my analysis of General Motors’ (GM) rise as a marketing powerhouse, I want to refer to yet another pillar of GM’s resurgence: its Chevrolet division. During the last couple of years, GM has been engaged in an exciting turnaround of its once flailing Chevrolet division. Chevrolet has always been GM’s workhorse. Considered its “popular” brand, that is, the brand targeted at the mass, mid-priced segment, Chevrolet cars had been, at best, uninspiring. There was not a clear position for Chevrolet. The brand churned a massive number of styles, very much unrelated except for one thing: their lack of character –and, some would add, quality. In a very typical mistake made by many corporations, GM at some point considered that the middle-class consumers need for an affordable, no frills car meant that its customers could forego style and the fundamental drive to fulfill significant emotional needs within a mainly rational choice. Toyota and Honda did not make the same mistake, and their respective Camry and Accord models thrived by offering consumers affordable style, durability and reliability. In my view, GM learned the lesson, and took the initiative of carefully re-evaluating Chevrolet’s personality. GM addressed two fundamental questions: what was the brand to stand for? and, consequentially, what kind of cars should be developed and marketed under the Chevrolet brand name? I think GM cracked the code: if I had to summarize the chosen positioning for Chevrolet, I would define it as “the smart choice”, underpinned not by low price, but as technology-driven efficiency. A mindful brand that pursues innovation as a way to provide the best overall value to today’s conscientious consumer. The first step was to resuscitate a model that was pretty much written off: the Malibu, and make it the unquestionable flagship for the brand. Malibu provides Chevrolet with a clear focus and a base personality the consumers could first identify, and second, relate to. The Malibu was completely re-engineered. A generous dose of stylish design and technical performance to match its adversaries made the Malibu a remarkable contender in the leading mid-price category. But the real breakthrough was in also positioning Chevrolet as the innovator in fuel-efficiency and alternative energy vehicles, spearheading and bringing to market GM’s innovations in that area. Once again, this move fully pays off the brand’s chosen positioning: technology-driven efficiency. Please notice that Chevrolet’s innovations are not about performance, comfort or luxury. No frivolous (although nice!) heated windshield cleaning fluid here: it’s all about efficiency, lower costs and lower consumption of limited resources. It's what Chevrolet refers to as Fuel Solutions. Eureka! In one swap, Chevrolet is covering two relevant, very real and closely linked concerns of today’s consumers: a) the personal, financial concern with the rising costs of energy, and with it, b) the awakening to the reality that natural resources are indeed finite and that it's everyone's responsbility to do their part to conserve them. This is the drive behind the surging interest for sustainable and ecologically sound products.
General Motors has vigorously driven this positioning for Chevrolet. It started with their FlexFuel vehicles, uniquely suited to consume E-85 ethanol fuel, and taken to new heights with the much touted and highly anticipated Chevy Volt, a long-range –and cool looking!- electric vehicle slotted for launch in 2010. I am particularly impressed by the iconic system developed to represent this approach, whereby a very clever representation of each of the alternative-fuel types Chevy is offering or working on are shown under the theme “Gas-friendly to gas-free”. The vitality, breadth of innovation and commitment this simple array projects give Chevrolet instant credibility and appeal.
Once again, Chevrolet represents yet another proof of General Motors marketing prowess. I can see no flaw in their approach, and compared to the endless shots of fast cars running on smooth roads that are the staple in car advertising, GM is developing brands with real souls and personality. Consumers are paying attention. Your investment portfolio should too.