COURTING CONSUMERS: GM to offer test drives, 100 free miles

Detroit April 8, 2003; Joe Moller writing for Bloomberg reported that General Motors Corp., the world's largest automaker, will let consumers take most of its cars and trucks home for overnight test drives in an effort to boost U.S. sales after a slow start this year.

The program, which runs between April 15 and July 22, includes models such as the Cadillac CTS and Hummer H2, and will be the most extensive test-drive offer in company history, said Bill Mistele, director of retail strategy.

It will target the 60 percent of consumers who don't consider General Motors brands when they buy a new car or truck, Mistele said.

"Incentives alone aren't going to be enough," Mistele said. "If we can get them in to drive the vehicle and experience it, we know we're going to increase our likelihood of selling them a vehicle."

The new round of test-drives probably won't make much of a difference in sales over the next few months, some analysts said. General Motors will still rely on rebates and no-interest loans to bolster its U.S. market share for a third straight year, after sales and market share dropped in the first quarter, they said.

The program "isn't going to change a whole lot for this year," said Art Spinella, president of CNW Marketing/Research, which tracks car-buying trends. "Test-drive programs tend to have a longer-term impact than that."

Officials at competitors Ford Motor Co. and DaimlerChrysler AG's Chrysler Group said the companies don't plan to introduce similar test-drive programs.

During the first quarter, GM's market share fell 1.6 percentage points to 26.9 percent as those for top rivals Ford, Toyota Motor Corp. and Honda Motor Co. advanced, according to Autodata Corp.

Last week, the Detroit-based company introduced its most extensive no-interest loan program, covering all but two models for as long as five years, after March sales fell 3.2 percent.

General Motors spent $3,814 per vehicle on incentives last month, down 4 percent from February, while industrywide incentive spending rose to $3,268 per vehicle, the highest since October, according to CNW.

The test-drives will be offered at General Motors' 7,400 dealerships covering its Buick, Cadillac, Chevrolet, GMC, Hummer, Pontiac, Oldsmobile, Saab and Saturn brands. The program excludes the Chevrolet Corvette and two convertibles due out later this year, the Cadillac XLR and Chevrolet SSR.

Consumers who borrow a car or truck through the program won't be allowed to put more than 100 miles on the vehicle or drive it out of state, Mistele said. General Motors will pay to insure the vehicles, he said.

The company will back the program with national television commercials and a direct-mail campaign to owners of rival vehicles. Mistele wouldn't reveal the program's cost. Currently most potential buyers who opt for test drives get to drive around the block.