It's just another in a long string of bad days for General Motors
GM indicated that the move is a step on the road to recovery because it will let the automaker cut costs and get production in line with demand. There's no doubt that GM needed the cuts. While Japanese rival Toyota
It's no secret that General Motors has practically been giving away its products. But it may be more important to understand why it feels it has to offer such generous incentives. The reason seems to be that buyers just don't believe that GM's cars are worth as much as Japanese vehicles are.
The perception that American products are inferior is nothing new. In fact, for a long time, Japanese automobiles were manifestly better. But since the 1970s, American products have come a long way. Several GM offerings rank high on consumer quality surveys. Unfortunately, Japanese companies' long reign and ongoing leadership at the top of the quality pyramid has left a lasting impression in the public's mind. Even though it shouldn't neglect quality, GM can't expect to win consumers over by stressing its excellence in this area.
If GM wants to get back in the game, it needs to improve in the area for which American vehicles were once well-known: namely, style. DaimlerChrysler
But GM needs to produce bold cars like the Solstice for a much larger market before profitability returns. That will take a culture that embraces risk-taking in all divisions. Unfortunately, it's not yet clear that the company is ready to take the step.
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.