The new General Motors is about to officially take its place with its looming IPO and the evolution of its product line up. Key new models from Chevrolet – the recently launched Cruze and new Volt – are critical models that showcase what’s new in design, technology and marketing from GM.
Given their importance to GM, Compete assessed how both vehicles are doing in their early stages of launch and versus some key competitive new vehicle launches that are going on right now. We analyzed shopper behavior of in-market prospects via Compete’s proprietary measure of new vehicle demand derived from observing online shopping activity on 3rd party auto web sites such as kbb.com and edmunds.com. From that, we quantify how many people shopped a particular vehicle as well as what other vehicles they shopped. In general, the best launches feature a lot of shoppers and cross-shopping of few other vehicles—or at least cross-shopping of vehicles in the target competitive set.
The early results for both models are very encouraging. Cruze especially has come out of the gate very fast as the reported heavy ad spend behind the launch appears to be producing results. Demand is in line with the recently-launched Fiesta which has been a huge success for Ford and it is outdistancing the new Honda CR-Z which was launched in September concurrent with Cruze.
The first ads for the Chevy Volt, GM’s first plug-in extended range electric vehicle, launched late last month during the World Series. While its demand ramp up has been less dramatic than the Cruze’s it is sure to continue to receive significant attention as retail production begins later in November. Already, though, it has clearly built a solid base of interested shoppers
In terms of what they’re being shopped against, it appears that early Cruze shoppers are still sizing up the vehicle, figuring out what it is and who it stacks up against. Cruze is being shopped against a mix of domestics and imports as well as a mix of small, mid-size and sporty cars. That’s not too surprising for an all new nameplate as prospects compare and contrast to other vehicles to determine if the model is right for them.
Cross-shopping among Volt prospects shows that it’s still early on in the game. In October it was shopped primarily against the Cruze which may not be a bad thing for Chevrolet. GM has said that it’s hoping the marketing communications for Volt will draw dealer traffic that will spill over to other Chevrolet models, particularly the Cruze. While it’s still in its very early stages of launch, there seems to be a strong connection between the two models and Volt’s ability to be a halo model appears to be taking root.
The Cruze and Volt are critical launches for GM and Chevrolet. Building a strong base of shoppers will be important for driving sales for both new models. For Cruze especially, a strong demand base will enable Chevrolet to drive conversion (shoppers who become purchasers) without the use of costly incentives. It’s also important for Volt to show it has a strong demand base. While production will be limited to only 10,000 to 15,000 units in 2011, shopper interest will provide the gauge for future production plans as well as new electric vehicles from GM.
For Cruze especially, getting interest from competitive shoppers is also a key to driving vehicle sales. It expands the shopper base and increases the potential for conquest sales while limiting intra-brand cannibalization. And that will help Chevrolet grow its sales and profits.
It will be important for GM to continue to track the launch ramp up of both Cruze and Volt demand to ensure that each model is attracting enough shoppers to reach their sales goals. In addition, how well each launch resonates with new vehicle prospects will be crucial in framing each vehicle’s success – Cruze and its ability to conquest competitive prospects and Volt and its ability to act as a halo vehicle and attract shoppers to the other vehicles in Chevrolet showrooms.
We’ll continue to keep an eye on the new GM and in a future blog we’ll compare the Volt to the Toyota Prius, it most direct competitor. Stay tuned.
Dennis Bulgarelli is a Client Services Director at Compete. At Compete Dennis is responsible for advising auto clients on trends in consumer online shopping behavior. Before Dennis joined the Compete team he did research and planning at most of the large ad agencies. Dennis hopes to one day, drive cross- country on the blue highways. Follow Dennis on Twitter @dennisbul or connect with him on LinkedIn at http://www.linkedin.com/in/dennisbulgarelli.