Really good article about the Tahoe..

Discussion in 'General Tahoe/Yukon/Escalade Discussion Forum' started by LAP TOP GAMER, Sep 26, 2006.

  1. LAP TOP GAMER

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    The Tahoe is said to be one of the turn around vehicles for GM.
    http://www.detnews.com/apps/pbcs.dll/article?AID=/20060215/AUTO01/602150411/1148
    Hot Tahoe fuels GM optimism

    Sales of revamped Chevy SUV were up 50% in January despite slump in large-truck segment.

    Brett Clanton / The Detroit News

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    When the lease on his old Chevy Tahoe expired, Michael Wujczyk toyed with going in another direction. Maybe something smaller. Maybe a different brand. But when he saw the 2007 Tahoe, he stopped looking.

    "They just made some great changes to the truck," said the 52-year-old door distributor from Farmington Hills, who leased one of the new SUVs last month.



    Such praise has helped GM get off to a good start with the redesigned Tahoe -- the nation's top-selling large SUV and a critical piece of the automaker's comeback strategy.

    Fueled by a rash of advertising, exposure at events such as the Olympics and auto show hype, Tahoe is turning in good numbers despite a softening market for large truck-like SUVs.

    Tahoe sales were up more than 50 percent in January. The 2007 model is fetching a higher average selling price than its predecessor.

    Even without rebates, the new SUVs are sitting on dealer lots for less than a week before customers snatch them up.

    "It seems like there's a lot of good initial buzz on this product," said Tom Libby, senior director of industry analysis at J.D. Power's Power Information Network.

    So far, so good. But a true verdict on the vehicle is probably still months away.

    Only on sale since Jan. 10, GM has booked just more than 4,000 sales and is still in the process of shipping Tahoes to dealers.

    Tahoe, Ford Expedition and other large SUVs bankrolled Detroit in the 1990s and were once the vehicle of choice for American families. But their popularity has waned in recent years with the rise of smaller, more fuel-efficient alternatives, uncertainty over gas prices and growing attention on the environment.

    For that reason, Wall Street has raised doubts about the wisdom of GM hitching comeback hopes on vehicles whose best days may be behind them.

    "(The launch of the large SUVs) is important," said Merrill Lynch analyst John Murphy in a recent report, "but not a solution to GM's financial problems."

    Large SUV sales plummeted last year after Gulf Coast hurricanes drove gas prices above $3 per gallon. Predictions are that the category will level out around 700,000 vehicles a year -- a far cry from its 1 million-a-year peak a few years back.

    But while GM leaders acknowledge the segment has slipped, there is still plenty of life -- and profit -- left in the segment. They say they will use a new lineup of SUVs -- including Tahoe and updates of the Cadillac Escalade, Chevy Suburban and GMC Yukon -- to expand their 62 percent market share of the category.

    The rollout of the Tahoe gives a flavor of how aggressive GM will be as it moves to strengthen its stance in large SUVs.

    "We are going to be unafraid to tell our story," said Ed Peper, general manager of Chevrolet.

    Anyone who has turned on a TV or opened a newspaper recently knows he's not kidding.

    GM has launched an all-out advertising assault for Tahoe, trumpeting its new convenience features, versatility and $33,990 base price, which is $2,000 less than the outgoing model.

    As a title sponsor of the Olympics, Chevrolet now is painting the airwaves -- and much of Torino, Italy -- with marketing messages, putting Tahoe at the center of the campaign. In a first, GM also shelled out to have a new Tahoe in New York's Times Square on New Year's Eve and paid to make Tahoe the official vehicle of the Daytona 500 NASCAR race next weekend.

    GM does not publicly release its spending on advertising, but Brent Dewar, vice president of marketing for GM North America, said last week that the automaker's advertising budget this year will be roughly flat with 2005 despite more vehicle introductions.

    The automaker spent an estimated $1.3 billion on advertising last year.

    To silence critics who deride large SUVs for being rollover-prone gas hogs, GM introduced Tahoe with a raft of new safety equipment and improved fuel economy that rivals that of some midsize cars.

    And in recent weeks, GM summoned Chevy dealers for exhaustive training sessions to make sure retailers hit on all the right points when customers enter their showrooms.

    Don't big SUVs get bad gas mileage? Answer: The Tahoe gets more than 20 miles per gallon on average.

    Don't large SUVs tip over a lot? Answer: Not with a new anti-rollover system. If it happens, Tahoe has optional three-row head curtain airbags.

    And so on.

    "It was very grueling," said Kelly Livingston, inventory manager at Brasher Motors, a Chevy dealership in Weimar, Texas, who recently attended a six-hour workshop on the new Tahoe in San Antonio. "I got the feeling a lot is riding on this vehicle."

    GM is placing special emphasis on promoting the new Tahoe in Texas, which claims five of the vehicle's 10 best-selling markets. Playing up the fact that Tahoe is built at a plant in Arlington, Texas, GM has dotted roadways in the state with Lone Star flag-draped billboards reading "Made by Texans for Texans."

    More broadly, GM is dividing its marketing to target two groups: new customers who may not have considered a Tahoe and loyalists who may be feeling the pull to other vehicle categories.

    The Tahoe marketing touts its cleaner exterior design, new power-lift tailgate and a second-row seat that tumbles and folds at the push of a button. GM also equipped Tahoe with a 5.3-liter V-8 engine option that drops to four cylinders at cruising speeds to conserve gas.

    But so far, Wujczyk, the door distributor who traded for a new Tahoe, hasn't detected a big improvement in fuel economy over his old truck.

    "Right now, it's not getting the kind of mileage I expected," he said. "But we're still getting it broken in."

    Though big SUV sales are under pressure, it's hard to deny their place in the U.S. auto market, said Brian Chee, managing editor of Autobytel.com, a Web site that compiles auto-buying research.

    "A lot of people still need large SUVs, whether it's for towing or for passengers or cargo," he said. "It's a vehicle that isn't going to disappear just because of gas prices."

    The entry of updated GM vehicles into the category may even help it rebound a bit in 2006, J.D. Power's Libby said.

    "Will this help the whole segment? I think it will," he said.

    Last year, with its profits tumbling, GM decided to move up the release of its new large SUVs to help fuel a rebound of its North American auto business. Instead of arriving in the spring as scheduled, they began arriving in January.

    GM, which lost $8.6 billion in 2005, is eager to focus attention on 19 new models it is introducing this year. Big SUVs and pickups derived from GM's new full-size truck architecture, known internally as "GMT900," represent the biggest portion of that rollout -- and the best potential for improved profits.

    In other words, getting them right is a must.

    "I think everyone knows how important everything is for General Motors right now," said Steve Witcher, general sales manager at a Chevrolet dealership in Taylor.

    Given the anxious climate and speculation that GM could be forced into bankruptcy if it can't correct its cost problems and improve sales, Chevrolet's Peper said he is confident the Tahoe is the right vehicle to lead off the company's comeback.

    "This is a great vehicle," he said. "We're fighting back all the time, and I think America is rooting for us."

    You can reach Brett Clanton at (313) 222-2612 or [email protected].