DETROIT – OnStar has become an effective weapon in General Motors’ efforts to hang on to market share. Chet Huber, OnStar president, said while there is no precise information indicating that the 10-year-old telematics service has boosted GM’s sales and market share, market research clearly indicates that OnStar has helped convert potential customers in buyers of GM products.
“We all know how complex the market is. Things change every day. Right now if you look at the general market of new vehicle purchase intenders … about one-third of all buyers have expressed a preference for OnStar-equipped vehicles,” Huber told TheCarConnection.Com.
OnStar service helps set GM’s vehicles apart from those of rivals and is increasingly important to GM’s marketing efforts. GM now offers the OnStar service free for the first year on all Cadillac, Saturn and Buick models, as well as several Chevrolet models, LaNeve added. Consumers have the right to sign up for the service at $16.95 per month or $199 per year. Among those who have had a major event involving OnStar, such as a car crash, the renewal rate is close to 99.9 percent, LaNeve said.
Huber added GM doesn’t break out OnStar’s profits and losses, but it has more than 4 million current subscribers, and the renewal rate for the service hovers around 60 percent. In addition, John Devine, GM’s chief financial officer, has said OnStar is profitable.
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