The Road Ahead
Where did all the Oldsmobile buyers go?
THE ROAD AHEAD/MICHELLE KREBS
May 10, 2004
Two momentous – and seemingly unrelated events – occurred in a single recent week: South Korean automaker, Hyundai, skyrocketed from near the bottom to near the top of the J.D. Power and Associates’ quality charts; and General Motors’ Oldsmobile Division produced its last vehicle.
Hyundai, in the recently released J. D. Power Initial Quality Survey, which asks more than 51,000 Americans about quality problems they’ve experienced during the first three months of owning their new vehicle, leapfrogged American and European manufacturers and soared to the lofty ranks of Honda and Toyota.
Among auto manufacturers, Hyundai Motor America tied American Honda in problems -- 102 problems per 100 vehicles -- just below No. 1 ranked Toyota Motor Sales U.S.A., with 101 problems. (Only last year, Hyundai was near the bottom with 143 problems.) In terms of brands, Hyundai ranked seventh behind luxury makers Lexus, Cadillac, Jaguar and then Honda, Buick and Mercury, putting it also ahead of Toyota and Infiniti.
"A decade ago, as Korean manufacturers struggled with a universally poor reputation for vehicle quality, no one would have predicted they could not only keep pace, but actually pass the domestics and other imports in terms of initial quality," said Joe Ivers, J. D. Power partner and executive director of quality/customer satisfaction.
The same week that the J. D. Power results were announced, a dark red Oldsmobile Alero rolled down the assembly line at a GM plant, marking the end of America’s oldest and the world’s second oldest automotive brand. The 35,229,218th Oldsmobile built since Ransom E. Olds established his company in 1897 goes on display in the Oldsmobile museum in Lansing, Michigan.
GM had announced in December 2000 that the Oldsmobile brand would be eliminated over the following few years. GM said that despite major investments, Oldsmobile remained unprofitable, and its sales continued to erode. Besides, GM executives said, Oldsmobile buyers could easily move to other GM brands, most likely Buick. But that didn’t happen.
And that’s where the Oldsmobile and Hyundai stories intersect.
J. D. Power analyzed where Oldsmobile buyers were going via its Power Information Network (PIN), which gathers information regarding real customer buy-trade transactions from dealers.
Turns out, Oldsmobile buyers are turning to Hyundai Motor America by the largest and increasing percentages, not to GM.
“I never would have predicted that Olds buyers would increasingly be going to Hyundai,” said Tom Libby, a J. D. Power analyst and director of the PIN. “Intuitively, you don’t think of Hyundai with the same upscale image as Oldsmobile.”
But as with quality, the times they are a changing in terms of Hyundai’s image.
What’s even more telling is GM was 14th among all manufacturers that Olds owners turned to after learning their brand was going away. Right behind Hyundai, they went to Nissan, Honda, Toyota, Mazda, Mitsubishi, DaimlerChrysler, Subaru and Suzuki (in which GM owns a stake in both), Volkswagen, BMW, Isuzu and Ford, respectively.
Indeed, in terms of brands, they turned to Chevrolet first and then to Hyundai. Cadillac and Pontiac ranked fifth and eighth, respectively. Yet, Olds buyers didn’t flock to GM brands in large enough numbers to boost GM in the corporate ranking.
Even more surprising, Buick ranked dead last as an alternative for Oldsmobile owners, in contrast to GM executives’ predictions.
Someone who is not surprised by any of the recent news events is George Glassman, who owned an Oldsmobile dealership in the Detroit suburb of Southfield, Michigan. GM spent untold billions on buying out dealers like Glassman or reassigning some to other GM dealerships.
Glassman had predicted a defection from GM with the departure of Oldsmobile, in part, because brand loyalty is non-existent, and value is the be all and end all. He’s also not surprised Olds buyers didn’t go to Buick. “Buick is still perceived as appealing to an older crowd,” Glassman said. “GM truly turned its back on hundreds of thousands of buyers who I think could have been loyal.”
In addition, with their Oldsmobile franchise gone, dealers like Glassman had to find other brands to sell; they went to Subaru, Kia, and, in Glassman’s case, Hyundai. In other words, mostly GM competitors.
“Hyundai acquired a number of good quality dealers who have become the best competitive force against GM. They’ve (GM) created a monster,” said Glassman. “I was a determined GM dealer, now I’m a very determined Hyundai dealer.”
And his customers have not found it difficult to transition from Oldsmobile to Hyundai,
Where did all the Oldsmobile buyers go?
THE ROAD AHEAD/MICHELLE KREBS
May 10, 2004
Two momentous – and seemingly unrelated events – occurred in a single recent week: South Korean automaker, Hyundai, skyrocketed from near the bottom to near the top of the J.D. Power and Associates’ quality charts; and General Motors’ Oldsmobile Division produced its last vehicle.
Hyundai, in the recently released J. D. Power Initial Quality Survey, which asks more than 51,000 Americans about quality problems they’ve experienced during the first three months of owning their new vehicle, leapfrogged American and European manufacturers and soared to the lofty ranks of Honda and Toyota.
Among auto manufacturers, Hyundai Motor America tied American Honda in problems -- 102 problems per 100 vehicles -- just below No. 1 ranked Toyota Motor Sales U.S.A., with 101 problems. (Only last year, Hyundai was near the bottom with 143 problems.) In terms of brands, Hyundai ranked seventh behind luxury makers Lexus, Cadillac, Jaguar and then Honda, Buick and Mercury, putting it also ahead of Toyota and Infiniti.
"A decade ago, as Korean manufacturers struggled with a universally poor reputation for vehicle quality, no one would have predicted they could not only keep pace, but actually pass the domestics and other imports in terms of initial quality," said Joe Ivers, J. D. Power partner and executive director of quality/customer satisfaction.
The same week that the J. D. Power results were announced, a dark red Oldsmobile Alero rolled down the assembly line at a GM plant, marking the end of America’s oldest and the world’s second oldest automotive brand. The 35,229,218th Oldsmobile built since Ransom E. Olds established his company in 1897 goes on display in the Oldsmobile museum in Lansing, Michigan.
GM had announced in December 2000 that the Oldsmobile brand would be eliminated over the following few years. GM said that despite major investments, Oldsmobile remained unprofitable, and its sales continued to erode. Besides, GM executives said, Oldsmobile buyers could easily move to other GM brands, most likely Buick. But that didn’t happen.
And that’s where the Oldsmobile and Hyundai stories intersect.
J. D. Power analyzed where Oldsmobile buyers were going via its Power Information Network (PIN), which gathers information regarding real customer buy-trade transactions from dealers.
Turns out, Oldsmobile buyers are turning to Hyundai Motor America by the largest and increasing percentages, not to GM.
“I never would have predicted that Olds buyers would increasingly be going to Hyundai,” said Tom Libby, a J. D. Power analyst and director of the PIN. “Intuitively, you don’t think of Hyundai with the same upscale image as Oldsmobile.”
But as with quality, the times they are a changing in terms of Hyundai’s image.
What’s even more telling is GM was 14th among all manufacturers that Olds owners turned to after learning their brand was going away. Right behind Hyundai, they went to Nissan, Honda, Toyota, Mazda, Mitsubishi, DaimlerChrysler, Subaru and Suzuki (in which GM owns a stake in both), Volkswagen, BMW, Isuzu and Ford, respectively.
Indeed, in terms of brands, they turned to Chevrolet first and then to Hyundai. Cadillac and Pontiac ranked fifth and eighth, respectively. Yet, Olds buyers didn’t flock to GM brands in large enough numbers to boost GM in the corporate ranking.
Even more surprising, Buick ranked dead last as an alternative for Oldsmobile owners, in contrast to GM executives’ predictions.
Someone who is not surprised by any of the recent news events is George Glassman, who owned an Oldsmobile dealership in the Detroit suburb of Southfield, Michigan. GM spent untold billions on buying out dealers like Glassman or reassigning some to other GM dealerships.
Glassman had predicted a defection from GM with the departure of Oldsmobile, in part, because brand loyalty is non-existent, and value is the be all and end all. He’s also not surprised Olds buyers didn’t go to Buick. “Buick is still perceived as appealing to an older crowd,” Glassman said. “GM truly turned its back on hundreds of thousands of buyers who I think could have been loyal.”
In addition, with their Oldsmobile franchise gone, dealers like Glassman had to find other brands to sell; they went to Subaru, Kia, and, in Glassman’s case, Hyundai. In other words, mostly GM competitors.
“Hyundai acquired a number of good quality dealers who have become the best competitive force against GM. They’ve (GM) created a monster,” said Glassman. “I was a determined GM dealer, now I’m a very determined Hyundai dealer.”
And his customers have not found it difficult to transition from Oldsmobile to Hyundai,
or not ??? only time will tell.
. I want a real sports car again and we have enough 6 seaters to last a century.
