New Sales Chief Wants To Break GM's Bad Habits.

[megeebee]

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From Automotive News:

New sales chief wants to break GM's bad habits

Jamie LaReau
Automotive News | November 2, 2009 - 12:01 am EST
DETROIT -- Just two weeks into her new role as General Motors Co.'s vice president of U.S. sales, Susan Docherty plans to break some of GM's bad sales habits.

For instance, GM still splurges on incentives -- about $4,000 per vehicle, she says. Docherty wants GM to manage production to match supply and demand.

Also on her wish list: boost residual values, avoid overly generous leasing and win higher ratings for GM vehicles from influential Consumer Reports magazine.

The challenges are huge, but she joins other GM executives, including CEO Fritz Henderson, in asserting that the automaker's wrenching bankruptcy changed its slow-moving culture.

Docherty replaced Mark LaNeve as head of GM sales on Oct. 16.

"Have we had some missteps? Yes," Docherty, 46, said at a media event last week. "Are we going to slip back into some old ways? Maybe, occasionally, but I think we're all smart enough to know what we need to do. Some old habits die hard, but we're definitely a different company."

Susan Docherty
Age: 46
New title: Vice president of U.S. sales
Previous title: General manager of Buick-GMC
Challenges: Boosting U.S. sales, improving residual values and earning more recommendations from Consumer Reports.


Targeted leasing

Her recipe to reduce incentives: First, develop more strong products, such as the Chevrolet Equinox and Buick Enclave crossovers. Then, price them right. Finally, manage production and know when to "turn the tap off," Docherty said.

She said GM's recently launched products have made significant gains in residual values -- the expected values at the end of a lease, typically three years.

For instance, the redesigned 2010 Cadillac SRX crossover registered a residual of 52 percent of its sticker, up 21.5 points from the previous model. And the 2010 Buick LaCrosse has a 46.3 percent residual rating, up 16 points from the previous generation, she said.

But other than the hot launch products, Docherty said of residuals, "We need to do much better."

Another area in which GM needs to improve is leasing. Last year's credit crunch all but stopped the leasing of GM vehicles. In August, it resumed, mainly on luxury cars. Last month leasing accounted for only about 2 percent of GM sales.

Leasing goal: 7-10%

A healthy lease penetration for GM would be 7 to 10 percent, Docherty said. Toyota's lease penetration ranges from 13 to 14 percent.

"I don't want to become overly reliant on leasing because it messes up your residuals," Docherty said.

Leasing subsidized by automakers cuts residuals by lowering transaction prices and boosting supplies on the used market.

GM will offer more leasing but in specific segments such as luxury or highly competitive areas such as crossovers, she said.

Through September, GM sales fell 36 percent vs. a 27 percent decline for the U.S. industry.

Finally, GM aims to make more gains in Consumer Reports, Docherty said. For 2008, Consumer Reports recommended 12 GM nameplates vs. eight in 2009.

Henderson recently endorsed the idea that the magazine be made widely available to GM executives, said Mike DiGiovanni, the company's executive director of global market and industry analysis.

"Not everybody at GM is immersed in Consumer Reports," DiGiovanni said. He recalled that Henderson wanted to know: " 'Why aren't they? They should be. It's the bible.' "

SOURCE: http://www.autonews.com/apps/pbcs.dl...plate=printart

[Xenon]

If that's the case for leasing, then that would explain why higher priced luxury cars seem to have **** resale value! Good job GM if they manage to move more cars without relying on special leases or huge incentives!

[chevyman1973]

This is why I think gm is going to be great, they know where they need to be but are not forgeting where they came from and understand that they dont want to go back there!

[1.21 giggawatts]

leasing in certain markets is the majority of sales. regardless of what numbers show nationwide. If GM wants to change perception in markets where imports rule and bring fresh buyers in, they need to give them a taste. also cutting out fleet sales to rental car companies would help residual values too.

[marinerbc]

She is going to fall flat on her face, because she doesn't get it.

Hatchet men (regardless of gender) never do. She is not a car guy, and I hope she winds up in Siberia mining bauxite for Ladas.

[K-1]

Originally Posted by marinerbc

She is going to fall flat on her face, because she doesn't get it.

Hatchet men (regardless of gender) never do. She is not a car guy, and I hope she winds up in Siberia mining bauxite for Ladas.

Yeah, because what GM was doing before under LaNeve worked out oh so well.

[Masospaghetti]

She's right but its common sense stuff - obviously you want to balance supply and demand. I'm skeptical she'll actually be able to make a difference though.

[Hitman1970]

I wish her and GM the best in this. I think the easiest will be the leasing followed by incentives and finally CR. The first two they have better direct control over. As for CR 1. They need to know the rules of the game. 2. They need precious time tochange the product to perform better in the game.

[ponchoman49]

Quote:Finally, GM aims to make more gains in Consumer Reports, Docherty said. For 2008, Consumer Reports recommended 12 GM nameplates vs. eight in 2009.

A lost cause! In order to be recommended by CR you must have a Toyota badge affixed to your trunklid and make dull boring bland appliances that do well in crash tests. It's not only GM that needs to make changes. CR needs to clean up there flawed system of collecting data and consumers need to excercise intelligence when shopping for a vehicle and quit sellecting the foreign products because that is the current in fad.

[Exploder]

BUT SHE KILLED PONTIAC!!!!!!!!!!!!!!1




I just couldn't resist.

[KingElvis]

This kind of sounds like "if wishes were horses, beggars would ride." Yeah, it'd be nice to have people pony up $35K for a Pontiac. Lutz tried it with the GTO. Didn't work.

Yeah, it'd be great if you didn't have BMW leasing the 3 series for $300 a month - GM could do that with CTS if the darn residuals weren't so bad. It makes Caddy seem like a lousy deal for those who lease - and it is.

Guess that's why you have to sell them instead, but still offer big rebates.

I think they should just raise prices - then the buyer can say "I got 5 grand off the list price!" Even though it has $3k in padding. Others can say they base price lower, then GM just says "That's because we're worth more."

It's a charade, but what we have now is no less a charade.

[Idler Arm]

Just a minute...

She was there when Pontiac went to G3,G5,G6,G8 and "Pontiac is Car".

Enclaves can't be had in Blue???

The incentives remain confusing as hell, and the distress merchandising continues.

Although our marketing is getting better, much remains to be done. In my mind the jury is still out on Docherty, yet she desreves a fair shake now that she is in the driver's seat. Wish her all the best.

[armycam68]

Good luck to this lady. She will know what it's like selling snow to Eskimos!
As I walked through a Chevy/Buick dealership on Saturday.........I watched at least a dozen salespeople looking at a total of five customers. My wife and I are looking for something to replace our 2007 IMPALA and my 2008 GMC Envoy.
As we looked, we both came to the conclusion that Chevy/Buick has nothing to offer us.
A new Impala has increased in price nearly $3000 since we bought ours. The only change I could see was the dials on the heater/air switch.
The TrailBlazer is gone so now I must buy a Traverse or an Enclave to tow my boat.
My wife said no way on the Enclave or the Traverse...........she reminded me what a chore it would be to drive this miniture school bus in a Walmart parking lot...........even with the camera..........BTW........both the Traverse and the Enclave on the florr stickered for over $44 thousand dollars.........are you serious??????
I had a 2004 Chevy Colorado..........a real piece of junk, that took an airfield to turn.......and BTW......no changes on this thing either other than wheels and body side mouldings, and the price increase.
I looked at the new V-6 Equinox..........no frame, questionable towing and a loaded Nox on the floor was $32,700.........about $2K more than my Envoy was two years ago with all the rebates.
The Buick Lucerne on the floor was a 2009 or ??? since they haven't changed it either.
The dealership didn't have a new LaCross.........but it's over priced and BTW, the Walmart/Mall shoppers will have a field day with the new LaCross.........no body side mouldings on a $30K car..........oh the doors and shopping carts!
Do the people that design these vehicles live on this planet........do they all ride the bus..........do they ever ask their custoners for an opinion?????????
Maybe GM strategy is.......sell a few at a big profit........

[PhishPhood]

These are very very smart recognitions on her part. To make these the first goals of her new tenure is a great sign by GM.

1. The days of 'if we build it they will buy it.....eventually' hopefully are gone
2. The days of 'sell it at any price because we must cover our high fixed costs' are no longer necessary.
3. The days of giveaway leasing with the implicit understanding that 'Mr Customer you don't want to buy this pos because you know after 4-5 yrs you're going to have to sink a ton of money into it' are gone with better and more reliable products.

If she can give the new products a sales pizzazz like Ford has done ( see 3rd Qtr results today ) then that along with Lutz's drive to keep GM in the public's eye will be a successful team IMO.

[fp115]

Originally Posted by armycam68

Good luck to this lady. She will know what it's like selling snow to Eskimos!
As I walked through a Chevy/Buick dealership on Saturday.........I watched at least a dozen salespeople looking at a total of five customers. My wife and I are looking for something to replace our 2007 IMPALA and my 2008 GMC Envoy.
As we looked, we both came to the conclusion that Chevy/Buick has nothing to offer us.
A new Impala has increased in price nearly $3000 since we bought ours. The only change I could see was the dials on the heater/air switch.
The TrailBlazer is gone so now I must buy a Traverse or an Enclave to tow my boat.
My wife said no way on the Enclave or the Traverse...........she reminded me what a chore it would be to drive this miniture school bus in a Walmart parking lot...........even with the camera..........BTW........both the Traverse and the Enclave on the florr stickered for over $44 thousand dollars.........are you serious??????
I had a 2004 Chevy Colorado..........a real piece of junk, that took an airfield to turn.......and BTW......no changes on this thing either other than wheels and body side mouldings, and the price increase.
I looked at the new V-6 Equinox..........no frame, questionable towing and a loaded Nox on the floor was $32,700.........about $2K more than my Envoy was two years ago with all the rebates.
The Buick Lucerne on the floor was a 2009 or ??? since they haven't changed it either.
The dealership didn't have a new LaCross.........but it's over priced and BTW, the Walmart/Mall shoppers will have a field day with the new LaCross.........no body side mouldings on a $30K car..........oh the doors and shopping carts!
Do the people that design these vehicles live on this planet........do they all ride the bus..........do they ever ask their custoners for an opinion?????????
Maybe GM strategy is.......sell a few at a big profit........

Who let the troll out of his cage???