General Motors does not want to sell you just a car.
GM wants to sell you a car plus OnStar, a home mortgage, auto insurance, digital radio and even Internet access.
Once a customer has bought a vehicle, GM wants to sell the customer household services that promise the convenience of one-stop shopping - plus profits for GM.
'It's an almost unlimited opportunity to extend our customer business relationships beyond traditional automotive products,' said Ron Zarrella, president of GM North America.
In theory, GM would offer these services to a customer's entire household - not just the vehicle owner. Some aftermarket products and services carry profit margins as high as 25 percent, a powerful lure to an auto industry accustomed to margins of 5 percent.
Zarrella spelled out his vision in a speech during the Automotive News World Congress.
One of the first such services will be OnStar, GM's onboard navigation system. Using a cell phone linkup to a GM customer service center, motorists can get directions to a destination or seek help if their car breaks down.
About 30,000 customers pay a monthly fee of $22.50, plus usage fees. Until recently, GM charged up to $1,300 for the hardware. To boost spotty sales, GM plans to install OnStar hardware in all vehicles as standard equipment within a couple of years. Eventually, every GM vehicle buyer will have the option to sign up for the monthly service, Zarrella said.
'The ultimate value of Onstar is not in the hardware, but (in the) subscriber base that can lead to a broader relationship with these customers,' Zarrella said.
For financial services such as insurance, mortgages or investment services, General Motors Acceptance Corp. would be the logical provider. General Motors' financial arm provides insurance and mortgages, but GM has not yet exposed its customers to the full range of GMAC services.
In the long run, Zarrella hopes to emulate Walt Disney Co., which has steadily expanded its share of household entertainment. By expanding its range of products over the past seven years, Disney doubled its share of its customers' entertainment spending.
To make this plan work, Zarrella said GM must nurture its core business: cars and trucks. 'The lessons learned from Disney is that they did not walk away from their core business - animation,' Zarrella said. 'They invested heavily in people and equipment, and they leveraged that investment. That is exactly what we plan to do.'