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General Motors to offer money-back guarantee

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EMILY FREDRIX
September 11, 2009

General Motors is hoping to jump-start its revival by guaranteeing car buyers that if they don't like their new Chevrolet, GMAC, Buick or Cadillac, they have 60 days to bring it back for a full refund.


The marketing effort that starts Monday is called "May the Best Car Win" and aims to win back customers leery of GM since it filed for bankruptcy protection earlier this year. The nation's largest automaker needs to improve sales so it can repay billions in government loans and stay in business.


New GM Chairman Edward Whitacre Jr. will appear in the initial burst of ads, telling viewers in his folksy, Texas accent that he too had doubts about the company when he joined this summer. Now, he likes the cars he's seen, and consumers should too. If they don't, they can have their money back.


Running through Nov. 30, General Motors Co. will allow buyers of new GM vehicles to return them, no questions asked, for a full refund within 31 to 60 days.


The vehicles must not have more than 4,000 miles on them and the drivers must be current on their payments.


The offer applies to the Detroit company's four remaining brands: Chevrolet, GMAC, Buick and Cadillac. The Pontiac brand, which GM is phasing out, is not eligible. Leased vehicles are also ineligible.


The campaign will also pit GM's four brands directly against foreign competitors, focusing on quality, performance, fuel economy and design.


GM must show that its cars and trucks are better than competitors' offerings, GM Vice Chairman Bob Lutz told reporters on a conference call Thursday.


He said there is a "monumental chasm" between the public's perception of GM's vehicles and the autos in its current lineup. The campaign, which has been planned for months, aims to change that.


Whitacre's appearance in the ads will be short-lived as GM shifts focus away from the corporation, Lutz said.


"We are emancipating the brands and trotting them out in the open," he said, noting that individual campaigns for the brands will share common elements, but the words GM and the company logo will not appear.


For example, the Chevrolet Equinox will be featured in advertisements directly compared to the Honda CRV. Cadillacs will target German luxury vehicles.


The company stands behind its cars now and can offer full money-back guarantees, Lutz said. As recently as three years ago, GM would have taken a huge risk if it made such an offer. But the company's slate of models is strong and can take on any competitors, especially foreign-made cars, he said.


He noted that similar programs in other countries have seen return rates of about 2 to 3 percent.


GM said it plans to continue its campaign through 2010. The company has been spending about $2 billion a year on advertising.


Peter De Lorenzo, a former ad executive, said GM's money-back guarantee may make consumers less reluctant to buy GM vehicles.


"This is a Hail-Mary pass," said De Lorenzo, publisher of autoextremist.com, a Web site that follows and is often critical of the auto industry and GM. "After this, if they can't move the needle ... I'll begin to be concerned about GM's future."


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AP Auto Writer Kimberly S. Johnson contributed to this report from Detroit.



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