Despite reports yesterday of a 25.8% cut in its Q1 adspend [WAMN: 27-Jun-01], General Motors announced it will maintain annual US advertising expenditure – estimated at up to $4 billion – at a similar level to last year.

America’s biggest advertiser will spend “about the same” this year as in 2000, said executive director of advertising and corporate marketing C J Fraleigh. However, the focus of the ad budget will be different: “Because of the realities of the marketplace, we have shifted more dollars toward local spending,” he revealed.

Amid falling sales and increasing competition, GM has introduced a number of discounts and sales incentives – initiatives more suited to local media than national, with the latter retained for brand building and new product launches. Fraleigh described the shift as “situational” and not part of a wider strategy change, insisting: “We’re still a leading network advertiser.”

After lashing out at the quality of GM’s advertising earlier this month [WAMN: 19-Jun-01], Fraleigh added: “Our first opportunity is to make our existing advertising more effective. There’s no indicator that says we are significantly overspending on advertising.”

In separate news, GM is also to overhaul its European sales and marketing operations, following a $86 million first-quarter loss in the continent.

Taking the helm as new vp–sales, marketing and aftersales at GM Europe is Nick Reilly, who retains his previous post as managing director of the auto giant’s Vauxhall unit in the UK. Reilly replaces Jeffrey P Hurlbert, who returns stateside “on special assignment” before his retirement in a year’s time.

“We have a big job to do,” admitted Reilly. “From how we position the product, and our pricing and marketing strategies, to the structural costs we have to support our [market] share.”

News source: Financial Times