GM's service call for its brand image

General Motors India (GM) is on a brand rescue mission after the Tavera-recall fiasco - the carmaker will soon announce a campaign under which it will reimburse customers for repairs/maintenance/servicing costs incurred in excess of a specified amount, in the first three years of buying a car. Besides, the company will offer extended warranty for a five-year period on its vehicles.

In one of the largest vehicle recalls in India, GM had, in July, 2013, recalled 114,000 units of its multi-purpose vehicle Chevrolet Tavera, manufactured between 2005 and 2013.

GM will launch a comprehensive vehicle service and maintenance package called Chevrolet 'Complete Care' in India next month. The programme includes up to six times servicing of the vehicle, after paying an upfront amount.

"The complete care programme has been tailored to create and enhance customer loyalty towards the Chevrolet brand by offering a memorable customer service experience", says P Balendran, vice-president (corporate affairs).

Complete Care has Chevrolet Promise as its first component, which says that the maintenance for a car in the first three years or 45,000 km, whichever is earlier, will not exceed a specific amount. If it does, the ba+lance will be refunded by GM.

For instance, around Rs 25,000 is the specified amount for the diesel variant of its small car, Beat. Customers would not have to incur any additional expenses for servicing the vehicle in that period. If the expenditure on maintenance exceeds the amount, the balance will be refunded to the customer. Chevrolet Promise includes periodic repairs and the cost of consumables, apart from critical components such as brakes, clutch, wiper-blades and all bulbs and fuses (these parts will be replaced for free in first three years, in case of any problem), free wheel alignment and balancing.

This is reminiscent of GM's efforts in 2008-09, when the US parent had run into trouble and filed for bankruptcy. The then-president and MD, Karl Slym, had prepared to reassure Indian consumers about servicing and spare-parts availability by giving three years of free service on the Chevrolet Spark, but other car buyers, too, could purchase the scheme. It, too, had guaranteed a maximum expenditure on service for three years, and promised to reimburse the additional amount.

Compared to the previous Chevrolet Promise scheme, the scope has been widened significantly this time with more free services and added benefits such as free replacement of parts (inclusive of spare parts and accessories), free roadside assistance, and free pick-up and drop for ladies and senior citizens for their car's servicing.

Arvind Saxena, who recently took over as the president and MD, did not talk about the campaign. But he says, "The Tavera recall is quite behind us. It was not a safety but a technical issue. Sales of the Tavera are picking up and we are looking at ways to further improve sales." Sales of the Tavera, at 1,267 units, accounted for around a quarter of GM's volumes last month.

"We have to step up focus on improving customer experience. We are working at improving customer interface across our network. That would help strengthen the brand perception. We need to create a positive impact on the customers. We need to review how we do our business and how our dealers interact with potential customers with a wider scope of quality improvement", Saxena says. The company has ruled out any immediate expansion of its distribution and service network (272 sales and 278 service outlets).

At the time of the Tavera-recall in India, the parent had admitted to the government that an internal probe had revealed company employees had tinkered and violated testing norms for the Tavera to meet emission standards. The recall led to the firing of Sam Winegarden, GM's vice-president for global engine engineering and India CFO Anil Mehrotra, who were among the 20 such employees in India and US. A special investigation team, steered by the chief secretaries of the states of Gujarat and Maharashtra, will probe the irregularities related to the recall of the Tavera. After the enquiry, the government would take a final call on the penalties to be imposed on the multinational company.