DETROIT -- In the wake of its financial disaster in 2005, General Motors is cutting its 2006 national marketing budget by more than $200 million, sources close to GM say.
The cuts come in a year of crucial product launches and renewed attempts to promote GM's new price strategy.
GM's national ad budget will be about $1.3 billion this year, sources say. Older vehicles and brands such as Buick and Pontiac will suffer as GM concentrates its spending on product launches, including the critical full-sized SUVs and pickups.
The cuts are aimed at improving profits after an $8.55 billion net loss in 2005, says an informed source who asked not to be named.
In a Jan. 20 interview, Mark La-Neve, GM's vice president of vehicle sales, service and marketing, declined to disclose GM's marketing budget. He acknowledged, "We're trying to get costs down throughout the company. I would say one of the last places that we cut is marketing expenses, but we're trying to push down costs in the entire company."
As is normal at GM, LaNeve said advertising support will be based on the potential for revenue from the various vehicles. "So we're spending more on the (full-sized trucks) than we would on the (Pontiac) Solstice launch," LaNeve said.
GM executives say marketing for its redesigned full-sized SUVs and pickups remains substantial. A separate source familiar with GM's advertising strategy says GM's major divisions face varying prospects: