GM's 60-Day Discount: A Brash Move

General Motors, which last week announced a 60-day return policy for any 2009 or 2010 car or truck it makes, is probably hoping that its guarantee does not yield huge returns.

If it does, then the automaker has missed the mark it set when it boldly announced a week ago that its products were the match of any autos made anywhere by any automaker.

At one time, the General had market penetration of over 30 percent but that was slowly eaten into by the imported segment that, for the first time this year, saw Toyota overtake GM as the number one carmaker in this country. Interestingly, if you were to look at where cars are actually made, you would see that many of the "imports" made for United States consumption are manufactured right here as Toyota has five plants in this country, Honda had four or five, Mercedes has at least three and Mazda has at least two (although their cars are pretty much interchangeable with Fords as Mazda is owned by Ford and its CX-9 is the basis of Ford's popular Edge).

That number has changed since the "import invasion" began in earnest in the late 1970s with Toyota and Honda leading the way so that today GM is, arguably, the number one or two automaker in this market.

It's not without reason that the General slipped through the years. If you look at the land yachts it pursued right through the early 80s, they were not all that well made. The steering was light and it felt as if you had no feel for the road. Indeed, it felt as if they weren't holding the road, at all, sometimes. The same could be said of two-wheel-drive live-axle pickups and SUVS which tended to bounce more than play nicely with the road surface. Four-by-four's were hard-riders that could go anywhere and take pretty much any punishment you meted out.

General Motors realized its image was slipping and it took a number of measures to try and reverse the trend. It went with the flow in the early 1980s with its X-cars, the first front-drive series of compacts that automaker made (let's face facts, the rear-wheel-drive mini-cars it offered in the 1970s like the Chevy Vega were monumental flops that ended up costing the automaker millions to fix engines that weren't cured correctly).

The X-frame, which is still the basis of just about every front-drive vehicle that General Motors makes today, whether it has been stretched or shrunken or whether it has been improved or not - it has been improved, you can trust that, having driven that particular chassis any number of times since its introduction in 1980, is now the match of any vehicle you'll find manufactured anywhere.

Indeed, recently Chevrolet Cobalts were put through a series of crash tests by not only the National Highway Traffic Safety Administration (NHTSA) but also the Insurance Institute for Highway Safety and they met or bested such vaunted marques as Toyota's Corolla in front end and front angle crashes. In today's permutation - whether it's an X-car or a B-car or an N-car that frame can - General Motors can rightly boast its vehicles rank up there with the imports.

Just to take one car as an example, the 2005 Cobalt. The interior fit and finish of this subcompact are still excellent, even though it is now four-model-years-old and the 2.2-liter four starts and runs like a charm. Front-drive, it handles curves and turns well and the powertrain is responsive, even after four years and 50,000-plus miles of rather brisk handling by various drivers. The body panels still line up nicely and all of the seams are still right where they should be. There are no yawning chasms between panels or otherwise. In other words, the Cobalt is tight. And, if anything, they have improved on the model since its re-engineering from the Cavalier in late 2004.

Or, take the new Chevy Malibu. It is a totally new car from the ground up, although it uses the same basic chassis that has been stretched. All of its panels line up nicely and the fit and finish are excellent. The powertrain lineup is pretty much GM standard - four's, sixes and for those who have to have them SS models that sport real superchargers - that are mated to either automatic front-drive transaxles or standards.

The lines, though, are the showstoppers on the new Malibu. From some angles they look very much like a Toyota or Honda and the rear ends are clean and rounded. They offer a variety of styled, spoked or standard factory steel wheels and covers. And, they offer all the latest in electronics, including the latest and greatest in GPS, climate control and other computer communications arrays (IE. Bluetooth).

Using these two vehicles as examples, it would seem that the General can take on all comers and, while it is taking a large risk with the 60-day guarantee, it's a risk that seems to be justified as these two examples seem to show. Also, from what the automaker has shown of its other vehicles, such as the Silverado, Tahoe, Suburban, Cruze, Endeavor, as well as its Buick lineup, its GMC line and Cadillac series, the automaker can go with its 60-day guarantee.

It's a rather brash program, as well, because the General is hanging its corporate hat on the hope that too many folks won't take it up on the offer. In its announcement last week to the Associated Press, it was noted that while "General Motors Co. and its Detroit rivals have argued that their cars are as good as or better than those made by Japanese brands" consumers just haven't been buying the argument.

So, GM has put its corporate bank book where its spokesmen are and is offering the 60-day return program. It's banking heavily on this program, as Bob Lutz, GM vice chair, told reporters on rolling out the program last week:

"We've got to earn the consumer's confidence and demonstrate why buying one of our products is a wise choice, and we're actually trying to make it a risk-free choice."

According to the AP, the GM program is aimed at those buyers who fled American-made products in the 1970s and 80s who believed that imports outstripped their domestic counterparts in quality. AP labeled the program "bold move that could boost sales and repair a tarnished image. But it also could cost the automaker dearly if its cars don't measure up to those made by Honda and Toyota, which consumers now view as superior."

To that end, the program, which ends in two months, is a no-questions-asked return policy. If a consumer purchases a General Motors 2009 or 2010 product the consumer has the right to return the product for a full refund, including sales tax, between 31 days and 60 days of purchase. In other words, the consumer has to give the GM product a reasonable trial of 30 days before considering the program. In other words, if you buy a car today and decide you don't like it tomorrow, you will have to wait 29 more days until you can exercise the guarantee. Then, you can walk away with the money refunded.

There are two provisos, though: 1. you have to be current with your car payment, and 2. the vehicle has to have less than 4,000 miles on it. That's it.

This type of program has been tried before with mixed results. Britain's Vauxhall brand ran a similar program a few years ago, the AP noted, and Saturn - a General Motors division that is now up for sale - had a 1,500-mile or 30-day money back guarantee program when the vehicle was introduced around 1990 until 2004.

Lutz estimated that GM could face about 14,000 returns as it expected a two to three percent use of the program.

This is a bold move on GM's part and now only time will tell what the public thinks.