Identity crisis: Geo gave dealers an import that wasn't (or was it?)
Photo credit: GM CORP.
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If the story of Chevrolet's Geo subbrand starting in the 1989 model year seems a little confusing in hindsight, blame it on the era.
It was a time when many consumers wanted a car that was "Made in the U.S.A." but didn't always know which one was or was not. It was a time when the traditional American brands were losing customer loyalty, even though some consumers couldn't necessarily explain why. It was a time when the U.S. auto industry feared and dreaded the seemingly unstoppable rise of Japanese competition -- even though the Detroiters remained bigger and better endowed than the import upstarts. And it was an era when the U.S. companies attempted to follow the lead of the Japanese by offering smaller, less expensive cars and SUVs -- while the Japanese sought to remake themselves more like the Americans, with larger, more expensive cars and SUVs.
Consumers were confused. The automakers were unclear. Chevrolet's solution? Geo -- a pastiche brand of Japanese-engineered small cars, built through Japanese affiliations and sold at Chevrolet dealerships for customers who might not want to shop in a Chevrolet store.
Amazingly, it worked -- more or less.
The Geo subbrand lasted nine years, from mid-1988 through 1996. It was a purely voluntary commitment for Chevrolet dealers when it was unveiled in July 1988, yet 4,100 of the country's 4,900 Chevy dealers enlisted for the franchise in the first year, which required Geo signs, separate floor space and sales and technical training. Many dealers dedicated showrooms to Geo, making it appear distinct from their Chevrolet operations. The franchise gave retailers an entry-level price point of less than $10,000. And it gave Chevrolet/Geo bragging rights for having America's most fuel-efficient vehicle: the 1-liter Geo Metro, which got what is even now an impressive 53 mpg.
In 1990, General Motors diverted one-tenth of its national advertising budget to Geo. GM anticipated the new brand would bring in 220,000 sales that year. It passed that mark, selling 324,963.
But by 1991, Chevrolet and its dealers would see that the times and the market were less predictable than envisioned. GM anticipated 400,000 Geo sales that year. It got 297,034. After 1991, sales continued to decline for several years.
Consider the context
Was it a faulty concept? Not at all, says Jim Perkins, who led Chevrolet during most of the Geo period. Chevrolet -- and the entire U.S. auto market -- was in flux in the 1980s and 1990s. Consumer attitudes were in transition. GM was eager to try anything to turn back the tide of rising import market share and restore Chevy's market share.
"You have to look at it in the context of where Chevrolet was at that moment," Perkins says. "There was very little in the way of product development or engineering resources coming our way for anything other than mainstream product. We needed new products, and we needed more volume. And Geo gave us that."
The plan was catchy. GM would reach out to young import-leaning buyers.
"Twenty-eight percent of the people who buy imports have never been in a domestic dealership," Mike Erdman, Chevrolet general marketing manager, said in Geo's earliest days, explaining the strategy of retailing under a different brand name. Erdman cited troubling research that showed Chevrolet was not reaching two segments of buyers: those who specifically wanted an import and those who were uncommitted to domestics or import-brand vehicles.
"This marketing strategy allows us to utilize our resources and go with a broad-base appeal for those who are and who are not committed either way," Erdman reasoned.
Toyota, Suzuki clones
Chevrolet wasn't exactly concealing its identity behind the Geo logo. In the eyes of GM, Chevrolet was enhancing its identity with broader offerings.
By the late 1980s GM had joint-venture auto-manufacturing partnerships in the United States and Canada with Toyota Motor Corp. and Suzuki Motor Corp. GM would take the Toyota Corolla clone that it obtained from the Toyota partnership at the New United Motor Manufacturing Inc. plant in Fremont, Calif., and call it the Geo Prizm. It would take the Suzuki Swift clone that it obtained from its Suzuki partnership, CAMI Automotive Inc. in Ingersoll, Ontario, and call it the Geo Metro. It would pair that with a CAMI-made Suzuki Sidekick clone called the Geo Tracker, put them all together under a Geo dealership sign, and -- voila! a brand that may or may not be an import brand, may or may not be Chevrolet, marketed under the slogan "A brand of the mind."
"It was a bit confused," Perkins admits, clarifying that the Geo plan was already in place when GM recruited him from Toyota Motor Sales U.S.A. to manage Chevrolet.
"But a lot of good things came out of it. It gave the dealers high-quality cars, and they needed the volume and profitability that came from the cars."
During its run as a brand, Geo also briefly received the small Isuzu I-Mark car, redubbed the Geo Spectrum, and an Isuzu Impulse two-door fastback and hatchback, renamed the Geo Storm.
But the market was changing.
Not long after Geo's launch came the 1990-91 economic recession. U.S. auto sales crashed, and the board of directors shook up GM management. GM funneled resources away from cars and into higher-margin light trucks. Geo also became a hot spot in the silent battle between Chevrolet and its new sister brand, Saturn. Both were soliciting import-leaning consumers. GM was channeling ad dollars into two brands that seemed to benefit from consumers not fully realizing that the marques were arms of GM.
'A Chevrolet Corolla'
Through the 1990s, consumers moved increasingly toward larger and more powerful vehicles -- regardless of the domestic or import badge. American Honda Motor Co.'s four-cylinder Accord sedan was 179.7 inches long when Geo was launched. By 1995 the Accord was 188.4 inches long and had a V-6.
Consumers also proved unpredictable, if not irrational, in their brand attitudes.
Even before Chevrolet started Geo, its dealers had experienced trouble selling the car built in partnership with Toyota at NUMMI, originally called the Chevrolet Nova. Although it was basically the same car as the Corolla being sold at Toyota dealerships, built on the same factory line by the same workers, the Nova met with resistance from consumers who felt the quality wasn't as good as that of the Corolla. Despite changing the brand and name from Chevrolet Nova to Geo Prizm, GM found those consumer attitudes didn't change.
"The Corolla and the Prizm rolled down the line, one after the other, and there was no difference other than a few proprietary elements. You can look at plant audits and see for yourself," says Perkins, still mildly baffled 20 years later.
"It was basically a Chevrolet Corolla. But we never measured up to the Corolla. We had a stigma attached to us."
By the mid-1990s, the combination of declining sales and growing consumer desire for Chevrolet Suburbans, Tahoes and pickups left both GM and its Japanese partners uninterested in continuing the Geo venture. In December 1996, Chevrolet announced it would dispense with the subbrand.
"In the end, the Japanese were just as interested in discontinuing as we were," Perkins recalls. "If it had been a roaring success, we would've had a stream of new products. But it wasn't, and we didn't."
You can reach Lindsay Chappell at lchappell@crain.com.
