June 6 (Bloomberg) -- General Motors Co., aiming to increase customer loyalty, announced it will expand its free scheduled maintenance program to most 2014 Chevrolet, Buick and GMC vehicles in the U.S.
“It makes sense to do this to kick the ownership experience off on the” right foot, Chief Executive Officer Dan Akerson said today in a speech during the company’s annual shareholder’s meeting at its Detroit headquarters. “We know that customers who service their vehicles at our dealerships are much more likely to purchase another GM product.”
Akerson wants to improve consumer satisfaction at GM to increase profit. The company estimates it can generate $700 million in revenue for every additional percentage point of customer retention. It’s part of his strategy to increase GM’s North American operating margins to 10 percent by mid-decade from an average of 7.4 percent during the past three years.
The program for most 2014 model year Chevrolet, Buick and GMC vehicles covers routine oil changes, tire rotation and other basic maintenance, Jim Cain, a GM spokesman, said. GM already offers a four-year or 50,000 mile free maintenance program for Cadillac.
Shares of the Detroit-based company rose 1.2 percent to $34.44 at the close in New York. GM has gained 19 percent this year, compared with a 14 percent advance for the Standard & Poor’s 500 Index.
Akerson, 64, who became CEO in 2010 on the eve of the company’s initial public offering, has also set goals of stemming losses in Europe and increasing China sales to 5 million from 2.84 million last year.
The automaker signaled in April that Akerson may retire within three years by readjusting the mix of his compensation so that he could benefit from long-term compensation before leaving. He has said he doesn’t know when he’ll retire.
S&P Dow Jones Indices LLC said June 3 that GM is replacing H.J. Heinz Co. in the S&P 500. GM, which had been in the S&P 500 since the index was established in 1957 until its 2009 bankruptcy, will be added to the gauge today.
GM’s return to the S&P 500 is a milestone for the company since emerging from a 2009 reorganization and $49.5 billion U.S. government bailout that became a centerpiece of President Barack Obama’s first term. Optimism about GM is growing as the U.S. Treasury sells down its stake and the stock on May 17 topped the $33 a share initial public offering price for the first time in two years.
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