"That's just the way it is," Hall says. "Those vehicles are intrinsically more profitable than passenger cars. But GM understands now that the object is to make the small cars desirable, and people will spend more money on them."
Different: New image problems
Since October, GM has battled a mind-numbing drumbeat of negative headline after negative headline. The American public watched former CEO Rick Wagoner in front of Congress, struggling to explain why he flew to Washington on a private jet to ask for government aid. The company's product decisions, business strategies and bankruptcy filing have been news (and comedy) show fodder.
And polls have found some people say they won't buy a car from an automaker that's taken bailout money.
But Hall thinks that issue will ease. For every person who's made that claim, he says, there's someone else who's becoming more willing to give GM and domestic carmakers another chance.
"We have a diverse country," Hall says. "For some customers, the bailout matters. For other customers, it doesn't."
Same: Old image problems
Even before GM hit its financial wall, its market share was dropping. Executives long complained that there was a "perception gap" between the actual quality of the cars it was producing, and how the American public perceived its brands.
That problem hasn't gone away.
This is the only chance GM will get to try to remake its image, De Lorenzo says. To do that, he says, it needs marketing campaigns that focus on the individual brands and less on the company. And they can't do it with standard advertising that hypes a car's attributes, he says. The campaigns need to be more like recent Hummer advertising schemes that built up the image of the brand with witty, trendy commercials.
"Hummer advertising was a high-water mark for GM," even though it couldn't save the brand, De Lorenzo says. "They need that kind of impactful campaign for the four brands they have left."
The company can't wait around for consumer perception of the brands' quality to catch up with the actual quality, he says.
"They don't have that kind of time. They are going to have to leapfrog ahead of it and basically hammer the point home … or blow up (their image) completely and start over somehow."