Chevy HHR Takes A Sales "Plunge"; GM Plans To Increase HHR Incentives

[Perian]

Link: www.wsj.com

Article quote:

Particularly surprising is the sudden sales slowdown for the Chevrolet HHR, a retro-styled miniwagon that GM's executives lauded as proof that eye-catching styling could reinvigorate sales. But after GM tried to raise prices on the HHR last year in response to what appeared to be strong demand, sales slumped. Now GM has a 154-day supply of the HHR on hand, even as Toyota, Honda Motor Co. and Nissan have little trouble selling their miniwagons.

Until recently, the Chevy HHR was the car that GM executives pointed to when they argued that fresh designs and smarter marketing could lead GM back to profitability in North America.

GM also used the HHR to road-test its new approach to pricing, designed in part to rectify a problem exacerbated by the rise of online car shopping. GM typically set sticker prices high, and then marked them down using rebates. But at online shopping sites like Edmunds.com, consumers comparing prices often saw only GM's sticker prices, and concluded that GM cars were more expensive than competing models from Toyota and Honda.

So GM set the HHR's price much closer to what it thought customers would actually pay -- about $19,000 for a well-equipped model. At first, the HHR looked like a hit, a bright spot in a year at a time when GM's overall sales were slumping. In July 2006, as part of GM's summer clearance sale, the HHR was available in some regions with 0% loans, and sales spiked to 14,838. But in October, GM cut off low-interest-rate loan deals for the vehicle. Sales plunged.

A GM spokesman said the company plans to increase incentives on the HHR this year but declined to elaborate.

Full article at link.

[Perian]

Perhaps the amost 4,000 Hyundai Sante Fe models being cranked out here in American every week have something to do with the slowing of the Mexican made, and wildly styled HHR.

Discussion question:

Has the Chevy HHR had its 15 minutes of fame?

[nsap]

Give the interior a refresh and give it better fuel economy, they would be watching them fly off of lots.

[VCDJ]

GM it is made in Mexico. People do not want to suport Mexican economy when they can buy America made honda, and support American Economy.

[JBsZ06]

Look at the pricing on the somewhat similiar PT cruiser and you will see most will opt for the lower priced vehicle.

The price differential (transaction price) is substantial (sp) so keep that in mind..

They both have a cool little retro thing goin on...but to a consumer in that segment PRICE is a big factor...

It sways the consumer...

IMO the HHR is a male oriented design which is somewhat of a mistake...Women make up a large portion of the buying decision...

PT cruiser and even the VW bettle are more femine and have lasted longer before huge discounts..(but not much longer)

Cycles are shorter on heavily styled designs...and when they drop...they drop hard.

JMO .

HHR will need to follow suit.

[dindak]

Raising prices is an error, almost a bait and switch to those who saw one price a few months ago and see another when they go to buy.

More power and some upgrades to the interior could help. Maybe some new cool options?

[goochman]

Lets hope GM decideds to make tweaks and keep this alive vs letting it die on the vine and coming out with an all new model with a new name 3 years from now and dropping the HHR..........

[commodorecoops]

Originally Posted by VCDJ

GM it is made in Mexico. People do not want to suport Mexican economy when they can buy America made honda, and support American Economy.

By buying an American made Honda you're supporting Japan too. The money ends up there. Sure, they employ American workers, but they don't really support the economy. They don't use many American parts and materials. It's more like 'assembled in USA' than 'made in USA'. And by buying an American made Honda or Toyota or Nissan you're supporting the demise of the Big Three, the ones that actually do mean something to the American economy. I'm not saying that people should shop GM or Ford or DCX just because they're American though. They have to earn sales by producing good products and marketing them right. You've gotta give the people what they want when they want it. And right now it's not the HHR. So get to work on a replacement. NOW.

[Ming]

I've reeavaluated my new car plans and plan to keep my Bonneville while purchasing a small wagon.

Sorry to say, the HHR is not on my list.

Smallish windows, poor fuel economy for a 4-cyl. - both led my significant other to say that the car is "too small" and for a small car gets bad fuel economy, even with the base engine. That, and the dealers love tacking tons of options on the HHR's. Hard to find a true stripper model at a good price, "incentives" or not. And what's GM's answer? More special editions...

Here's a clue, GM. Push dealers to offer stripper model HHR's with great fuel economy that you can "customize" on your own by ordering options (accessory/add-ons) that the dealer hasn't put on the car yet. That way the customer gets exactly (and only) what they want, and the initial purchase price will seem lower when they see the 15K sticker....and they won't complain as much about things they are financing on top of that which they added after the fact. Salesmen need to be educated on how to order options, and not reply with a "duh...I think we can get that".

A nice laminated photo/color "menu" with all of the possible dealer (or customer) installable options (could be as simple as custom carpet mats or requiring installation like wheels or a custom grille)...that would be sweet.

No focus on pre-configured Cappucino packages or whatnot. Dump that philosophy and the old one of having one base model on the lot and the rest all have fake wood siding and $2000 of options on top of the highest trim level.

Unless the HHR has some stunning incentives offered by the end of next month and my dealer starts ordering more base models, I'm unlikely to get an HHR (or any car from a traditional GM brand) for my next inexpensive commuter wagon.

Also, I'm disappointed that GM USA continually snubs people like me who actually prefer the sleek styling of something like the Astra Wagon with the huge range of engines offered (diesel, turbo and small displacement gas). If the Astra Wagon was available instead of the HHR, I'd be buying that car, few questions asked. GM has successfully pushed me away from traditional GM brands with this move, since I'm not going to buy a Toyota Vibe (which isn't a true wagon either, but more of a hatch).

[TheWraith]

this is pretty much any "retro" or "gimmick" vehicle's sales patterns. The pt cruiser did the same thing. they were selling over sticker when they first came out and it was impossible to find one. they actually rolled a lot of 2000 model year orders over to 01 - mine included. I cancelled though. By the middle of the 01 model year there were tons of them sitting on lots. considering it is essentially a ripoff of the pt (don't get me wrong i do like the vehicle, but it is what it is), you'd think it wouldn't come as a surprise that it's selling similar patterns.

[Sandwich]

I agree -- the highly stylizied vehicles fall hard. Once they satisfy the consumer base interested in that nitche vehicle, they're done. Even the Vette is seeing some sales trouble ( I think ) because, the C6 has been out for a few years...and your average Vette dude, already got his new vette. You know? -- Mini-van mom isn't going to get one now.

But, I couldn't for the life of me see the HHR becoming a staple of GM sales. I wonder if the top brass at GM thought that. I hope they didn't. That would really confirm what many of their nastiest critics already believe. But with that scenario in mind, it makes raising the price (if that's what happened) look like dumb idea #2.

Now, I'm no market expert, but... ...If I were making these wild, goofy little HHRs -- I'd keep the price right were I'd expect the buyer's to be on that -- entry level.

[camaro_freak]

just as I said in another thread. This vehicle will not sustain sales with its "retro" vibe and needs redesigned to fit into the corporate look of the new Chevy as soon as possible and drop in a more efficient engine and/or more performance options.

[Havasavana]

Originally Posted by Ming

Here's a clue, GM. Push dealers to offer stripper model HHR's with great fuel economy that you can "customize" on your own by ordering options (accessory/add-ons) that the dealer hasn't put on the car yet. That way the customer gets exactly (and only) what they want, and the initial purchase price will seem lower when they see the 15K sticker....and they won't complain as much about things they are financing on top of that which they added after the fact. Salesmen need to be educated on how to order options, and not reply with a "duh...I think we can get that".

A nice laminated photo/color "menu" with all of the possible dealer (or customer) installable options (could be as simple as custom carpet mats or requiring installation like wheels or a custom grille)...that would be sweet.

I hope somebody from GM is reading this. If Toyota can sell that Scion mess...

Originally Posted by JBsZ06

Cycles are shorter on heavily styled designs...and when they drop...they drop hard.

We might expect to see this for the Solstice next.

[rsbaker]

The mistake was attempting to raise the price. Keep it low or at least lower than the competition and they'll fly off the lot. It would be nice to see a few TV or print adds or some smart product placement as well. MTV seems to be the Scion Network why can't Chevrolet and GM sponsor some High profile events aimed directly at the people you would like to sell to. they could do the same with Cobalt as well. It has gained some street cred' among the tuner crowd. You can never rest on your laurels GM.

[motorman]

if they want to sell it to the younger generation they better put the supercharged cobalt engine in it and not charge a arm and a leg for it.