A Year Later, GM Bankruptcy Resonates With Car Shoppers

Today is the one-year anniversary of General Motors filing for its federally backed bankruptcy and restructuring. To see how consumer behavior has been affected, Cars.com conducted a survey of more than 1,000 people and found that a year later, 32% were less likely to consider GM brands than others.

That’s not a cheery number, but 63% said the bankruptcy would have no impact on their shopping behavior, and that is a large chunk of buyers. Five percent said they’d be more likely to buy a GM vehicle after the bankruptcy.
 
The same question was asked regarding Chrysler as well, and an identical 63% response was recorded in the “no impact” category, with 33% saying they were less likely to consider the Chrysler range of vehicles.

When asked if the fact that Ford took no federal money would influence their car shopping, 47% said it made them more likely to consider a Ford when buying their next car, while 53% said it made no impact on their decision. Compare that 47% more favorable number with GM’s 5% however, and it’s easy to see the bankruptcy sting still lingers as the domestic brands battle for market share in a rebounding economy.

The survey was conducted in May and included a random sample of 1,057 men and women.

Comments

In the past six months my family has purchased two new cars (Mustang, CR-V) and in both cases we ruled-out General Motors. We can't bring ourselves to do business with a company that takes US tax-payer dollars and misleads the public about paying it back. On top of that the two vehicles that where in the categories we had shopped (Equinox, Camaro) are built in Canada. Shame on GM!

Whats wrong with vehicles built in Canada? Seems a bit narrow minded to me.

Canada's govt. also gave them a loan.

Considering the we are all stock holders in the company not buying from them hurts us if the federal government can't sell the shares and at least break even.

Forcing them to fail is cutting off your nose to spite your face.

Seems like a mixed bag because as "??" points out, we (the taxpayer) ultimately lose if they fail.

I've posted about this on here before, though. I live in the heart of GM country - two large GM plants in Lansing where I live, and I have friends who WORK for GM that are buying Fords because they were so ticked about the bailout. Yes, the psychology makes no sense, but the bottom line, I think, is that many Americans are more capitalistic than what the govt and GM management want to acknowledge.

I've owned Fords and GM products - currently have a Pontiac Vibe. I'd buy another Vibe in a heartbeat if I could, but could only get used now and with much reduced value probably. My next car will be a Ford. I've liked all the Fords I've owned and had no problem with them.

I have to admit that some part of me appreciates a company that pulled itself out of a mess. I think that appeals to most hard-working Americans.

??, your logic is utterly false. Just 'coz the gov't has invested our money into a company, doesn't mean that we have to invest in it too.

It's like your 401K or whatever mutual funds that you are holding...your money is being invested by some financial advisor and he/she - I bet - must have purchased energy stocks, esp. oil companies. When oil was dropping from $140/barrel to $60/barrel, you don't start digging a 100 ft deep well/pool in your backyard and start calling Chevron/Shell/76 to come in daily to fill it up, just to jettison the oil price (back to $140 or higher). Same logic applies here - you don't buy GM / Chrysler just because they aren't selling well and have trouble getting a good / HIGH price on its stocks!

If you are in the market for a car and choose not to buy from GM due solely to spite then yes you are "cutting off your nose to spite your face".

Whine and cry about them taking loans and still wanting them to fail so you, the taxpayer, gets nothing back? That's absolutely absurd.

Dumb Logic is an appropriate screen name for you as you fail to comprehend the basic premise of cutting off one's nose to spite one's own face. The assumption is that the buyer wanted to purchase a Equinox and Camaro and is not doing so because of the gov bail-out. That's not the case as they only refused to even consider those vehicles. That's much different than test driving them and coming to the conclusion that they are their first choice AND then deciding to forgo them because of the bail-out.

Reading comprehension and a little education goes a LONG WAY these days. Get some.

Amuro Ray,

We are invested, in GM, involuntarily. Since the feds own the shares, we own the shares. If GM fails the value of those shares disappear.

That's my money, that's your money.

I was against owning the company. I was against any bailout until they filed bankruptcy and reorganized.

I will never buy a vehicle under a government owned stature. Nor will I invest in a company that is owned by the unions.

Doing so would be giving the satisfaction to these 2 parties that they have succeeded.

Deep in my heart I know this was a sham to make nice with the UAW in order to win votes for the next election.

It deserves to fail as socialism is not welcome in the mind of this patriot.

Free market would have allowed GM to fail like it should have instead of dragging it out a few more painful years on my dime.

Government Motors, rot in hell.

Here is the bottom line: Gm's marketshare is down only SLIGHTLY from 2009 in spite of having 4 less brands. Two of those four brands actually sold in decent numbers. When you account for that fact a logic person would conclude that aversion to supporting a bailed out company only enters the minds of a fraction of the car buying public. Sure, evey car website is overrun by zealots who think that we care about their decision to never buy GM again. TO be honest, the demographics that GM needs to attract are the types who are more likely to not care about the bailout. The folks who are up in arms and running to their local Ford or Toyota dealer to buy an "American" car are likely to be older, more rural, more conservative and traditionally favorable to buying American cars. Sure they are an important group but GM needs to get those are more urban, more affluent and more progressive to buy their cars. If they can lose rural conservative buyers but manage to get almost as many new buyers who are more affluent, diverse and progressive GM ultimately wins. I can assure you that most people I talk to could care less about the bailout and would NEVER exclude a GM model based on the bailout. It's not even a hot topic anymore. People with AIG policies haven't cancelled and folks with bank accounts at bailed out banks haven't closed them so I fail to understand this fervor to swear off GM products in the hopes that they lose marketshare and fail to pay back the money given to them by the Treasury. Government policies assist all types of companies and airlines were bailed out with loan guarantees after 9/11 so they wouldn't go bankrupt. The government intervened to save Amtrak in the 70s so that there would be some form of national passenger rail service in this country. It's happened before and it will happen again, its time to move on folks. Considering the fact that GM is still the #1 automakeer in the US (in spite of lower share) I would say that most Americans really don't share the passion of those here who want to see GM fail.

Gov Motors still can't turn a profit w/o their fleet sales and to top it off many of their new models are not selling in the numbers they need.

blatant lie.

GM has increased production of the Lacrosse, Camaro, Equinox and terrain over the last year. They are running three shifts at the respective plants and later this year Equinox assembly will be added to the Oshawa plant where the Impala and Camaro are made. They also announced an investment at the main plant to increase production. All four models are selling well with minimal incentives. In contrast, the Fusion (great car) has had major incentives on the hood for months. Buick is offering 3.9% for 60 months on the Lacrosse which is hardly a major incentive in this day and age.

If you exclude the TARP funds GM is still not profitable and will not be on track for profitability until the end of this year at the earliest. I heard this first hand last month from Chris Liddell at a investment conference in NYC. I trust he knows what he's talking about vs you.

CJ:

any link to back that up? You are incorrect. GM's profitability was largely based on the cost reductions implemented via bankruptcy last year. Revenue increased substantially from the Q1 2009 as well. You are totally wrong to say the profits were based on TARP. GM's existence is due to TARP funds so you can say they wouldnt have been profitable if they hadn't been bailed out with TARP. THAT makes some sense. TARP is not operating money at this point. Whatever wasn't spent during and after bankruptcy was used to pay back loans and add to GM's cash cushion.

Sheth - appreciate your comments and the fact that you respond with educated, thoughtful responses.

I suspect you're correct, that most of the "angst" against GM is from more rural, conservative individuals.

I disagree, however, regarding what you said about people not "pulling out of banks, etc." that took bailout money. I suspect the main reason for that is because changing banks is a huge pain in the ass and nearly all banks (with the exception of the few, small independent banks that are left) took the money. In other words, options outside of a bailed-out bank are very few.

However, there are plenty of options outside of GM and Chrysler.

I don't think the "anti-bailout" fervor will have a long-term effect, but I do think it's having an impact now - primarily visible in Ford's uptick in sales (27.9% in May).

jstant:

There is more smoke than fire with regards to the "furor" over the bailouts. Chrysler's sales have been dropping for years because they dont have new products or a small car. Thank Daimler and Cerberus for that. GM's sales are up but their marketshare is down about 2% but its hard to say that is based on "anti bailout" sentiment when they dropped 4 brands that represented at least 2-4% of their US marketshare. If GM was really feeling the sting of being shunned their share would be lower. Sure Ford's sales were up 23% last month but GM's core brands were up 32% and overall GM was up 16% which beat Toyota and was only slightly behind Honda. Chrysler took bailout money and yet had the biggest gain last month. The internet zealots make you believe there is a huge anti GM movement out there but the sales figures don't back that up. GM is probably losing rural conservatives to Ford but they are obviously attracting new customers to replace them and that's probably a good thing long term.