A few months ago, I ran across the absolute coolest "car site" ever. Got your pencils ready? Make sure they're sharp, because this is a long one: www.thetruthaboutcars.com. The site's run by a certified "car guy," Robert Farago, and focuses on providing its readers with, well, the truth about cars. In other words, stuff that the folks in Detroit, Munich, Tokyo, etc., don't necessarily want you to hear.
Except that on Friday, the site published a piece that GM (NYSE:GM) management might actually have enjoyed reading and that GM shareholders should also give some serious thought. In Friday's column, Farago commented on some news that came out of GM corporate earlier in the week, announcing a new half-hour "documercial" -- a televised real-life story of how GM's "OnStar" communications system has saved the lives of GM customers. Farago went on to highlight a recent trend in GM advertisements, playing up the safety aspects of its eight car brands. He suggested that this new strategy of advertising the company as a "multi-divisional Volvo" might be the real reason behind the company's much-ridiculed plan to begin tagging all of its brands with common "GM badges."
And it makes sense. If the best thing GM has going for it is OnStar, then why not play that up? Why not further extend that popularity to all of its brands? After all, one of GM's (admittedly several) big problems is a perception among the car-buying public that its cars aren't terribly well-built. That perception isn't always factual, as reflected in J.D. Power reports that GM's long-term quality actually exceeds the industry average and of rivals Ford (NYSE:F), DaimlerChrysler (NYSE:DCX), and Nissan (NASDAQ:NSANY), in particular. Yet the perception persists -- and is reinforced every time GM issues another massive recall to fix a misfiring widget.
As for how long such perceptions can persist, look at Hyundai, for years synonymous with its Excel -- a car that began disintegrating from the inside out as soon as it left the car lot. Hyundai's actually making good stuff these days. Why, one J.D. Power survey has it tied with Honda (NYSE:HMC) and second only to Toyota (NYSE:TM) in initial quality. Yet 20 years after the Excel's advent, its stigma still clings, and Hyundai hasn't yet boosted its U.S. market share out of the low single digits.
Given its current dire financial straits, GM probably doesn't have 20 years with which to turn its image around. And judging from the stock price, even if GM could last that long, Wall Street wouldn't be interested in waiting around for the recovery. Recognizing that, GM may have hit upon this clever solution: If we don't have time to change the "quality story," let's get people focusing instead on the "safety story."
If the company can succeed in doing that -- and, of course, keep on building decent quality cars -- this company just might succeed in turning the page.
Fool contributor Rich Smithis not a certified "car guy." He still has fond memories of his 1969 GMC Custom pickup, which at last report was still running -- getting about nine gallons to the mile, but running. But he has no position in any of the companies mentioned in this article.
