GM attempts to improve business
GM is trying to increase sales by offering an extensive warranty on its vehicles. This includes full service on engines and transmissions for up to five years or 100,000 miles. By offering this warranty GM is placing an extreme amount of confidence on its product. GM hopes consumers will place their trust in their company. They are able to make this warranty and believe in its viability for a few reasons. First, vehicle quality has improved 25 percent over the last five years. Also, repairs under warranty have decreased 40 percent. GM has received higher rankings from customers in dependibility surveys. The hope is that GM will be able to sell more vehicles, thus create a greater profit. This is a gamble however, because if the quality of GM vehicles is not up to standard the company will lose money in repair costs.
1 comment:
I believe the new warranty on the GM vehicles is a wise decision by the company. Showing the consumer their obvious confidence in the product will lead the consumer to also be confident in their decision of buying the product. Even if a few vehicles sold by the company need repairs within the guarenteed time slot of the warranty, the money put towards these repairs should be canceled out by the overall boost in sales of GM vehicles.
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