In slashing its national advertising budget this year by $200 million, General Motors is taking the road less traveled. Perhaps it's the wrong road.
Competitors are closely monitoring GM's plan to cut an estimated 10 percent of its U.S. media spending. But they don't expect to follow the industry's biggest advertiser. Rivals can't afford not to spend, as some 260 nameplates are on the market this year.
Toyota Motor Corp. plans to increase vehicle production 10 percent in 2006 and threatens to pass GM as the world's largest automaker. It would be foolish to ease up on its U.S. ad spending. Hyundai Motor America and its affiliate, Kia Motors America Inc., have aggressive sales targets that also require strong ad spending.
And Ford Motor Co., while mired in financial troubles, has scheduled several key launches that would make spending cuts unwise.