Chevrolet is bringing in younger customers and attracting buyers from non-General Motors brands, says Alan Batey, vice president of sales and service. He says that will help dealers overcome a dearth of leasees coming back into the market.
He spoke here with Staff Reporter Mike Colias.
Q: Does Chevrolet want to increase its lease penetration in 2012, given its improved residuals? GM is still well below the industry average.
A: We do want to make sure that we lease, but in a controlled manner. You don't know the uncertainty that's out there. If your portfolio becomes too big and an external factor changes the market, then you've got a lot of exposure.
We like leasing. Our residual values are now really competitive. So we'll continue to do it. The major leasing is coming from the passenger car market. The markets where we compete with the Cruze, the Malibu and the Equinox are all good lease markets.
You've got a trickle of people who leased vehicles coming back into the market. How are dealers going to manage that?
The strength that we have right now is that we're growing. We're launching so many new products and we're conquesting at such a high rate. On a lot of our car lines, we're getting like a 50 percent conquest rate. So we're bringing a lot of people to our brand. I just think the momentum we have will overcome that. I don't think it will be an impediment for us because of the high conquest rate.
You recently launched the Sonic and the Spark minicar arrives this year. Are you doing anything to help dealers with the smaller margins on those cars?
What's exciting about those small vehicles is the fact that we've got such a high first-time buyer rate, and a higher female-buyer rate. The beauty of those small-car segments is, you get people in and then you have the opportunity to build a relationship. And they've got like a 50-year life cycle of buying products and services.
We've never had strength in that market. And Sonic in January was No. 2 in the segment. The dealers are very enthusiastic, because they see this as incremental and an opportunity to build the brand.
What do you say to dealers who were hoping for a really big January like last year, when Chevy went big with incentives?
Chevrolet ended up flat with where we were in January of last year. We're really happy with where we were at. When you're in a dealership, the January market is usually 20 percent lower than the market you came off of in December. So you feel as if you don't have momentum. But that's just the reality of a January market.