Business Magazine Suggests GM Should Close 5 Of Its 8 U.S. Brands

[Bigbee60]

It's easy to bash GM as it's been a big target for a long time. It's royally messed up in recent times too.

However, if 8 brands (4 major ones at most as Saab, GMC, Hummer, and Buick are less than full line) are so bad, why are GM's non-US competitors falling over themselves in the last 25 years to add brands and build new channels for sales? Scion has been a huge failure for Toyota on an investment to sales ratio. It was much more than just some re-badged models and new signs - ask the 200 or so US dealers that didn't buy-in to Scion and who let on at the NADA meetings in March that not buying in has increased their bottom line compared to fellow dealers who did buy-in by up to 20%.

How about Honda who is just now putting the finishing touches on a third division to market in emerging markets and to market smaller cars in existing markets. What do they see about more being better that this author missed?

And what about Nissan who has not had great success with Infiniti other than the occasional hit like the G series? Is GM the only manufacturer that hasn't quite got the brand messages clearly defined and separated in the market?

Just look at VW with the Phaeton to see what happens when one big brand holds all of your apples. Too much brand spread is even worse than too many brands.

[vcs2600]

Originally Posted by zete

Pontiacs will be rebadged Holdens, which means Holden has an avenue in North America for their cars. Saturn are rebadged Opels, again, Opel gets an avenue in North America. Buick ends up being a total niche luxury player, focusing on comfort and unpretentious luxury and the Chinese market while Cadillac can go after everyone globally along with Chevrolet.

Killing Pontiac will hurt Holden. Killing Saturn hurts Opel. Killing Buick hurts Buick. And Buick is massive in China.

Pontiac/Holden is 1 low-volume car, maybe 2 at most. Which could also easily be sold at Chevrolet. Poor rationale for a brand.

It also hasn't been shown that Americans will buy the same Buicks as China. Quite possibly this strategy will price Buick out of its traditional market.

Saturn = Opel is the only one that makes some sense as a VW-ish brand. But GM-Europe should be responsible for management to prevent unneeded badgejobbers like the Outlook appearing. Oh, VW-North America isn't profitable either.

BGP seems to me that it's ripe for a shut down. Its the marketing overhead for 3 brands even though they barely have the sales volume of one brand (about 1/2 of Chevrolet's sales in total). The three brands have almost zero synergies with each other (unlike Mercury/Lincoln or Scion/Toyota). It looks like a bunch of random cars thrown together on a lot, because that's what it is.

Niche is good, niche is important. But Buick/Pontiac/Saturn are historical volume brands, all with tons of baggage, and there's some serious problems with repositioning them as niche. It might be much cheaper to launch a new brand (eg Hummer) rather than repositioning the old ones.

[Rocket 88]

Originally Posted by zete

The number of brands isn't the issue, instead it's the fact each was a full line brand.

What we're seeing now is a niche strategy for specific brands -- Buick, Pontiac, Saturn -- while Chevrolet becomes the full-line brand.

Pontiacs will be rebadged Holdens, which means Holden has an avenue in North America for their cars.

Saturn are rebadged Opels, again, Opel gets an avenue in North America.

Buick ends up being a total niche luxury player, focusing on comfort and unpretentious luxury and the Chinese market while Cadillac can go after everyone globally along with Chevrolet.

Killing Pontiac will hurt Holden. Killing Saturn hurts Opel. Killing Buick hurts Buick. And Buick is massive in China.

Totally on the money!

The problem isn't the number of brands its what you do with them. Keep the brands and focus the products they are selling.

GM needs to play to their individual strengths of each brand and be loyal to that concept.
For examples - no trucks for Pontiac just sporty vehicles and Opel products and Chevy clones for Saturn.

Having more brands can be just as much an advantage if used properly as it sometimes a disadvantage when they end up competeing against each other.

[espo19047]

Originally Posted by HotCarNut

Honestly (and I realize this is going to piss a lot of people off) the best strategy would be to kill Chevrolet as it has the most independent dealers and nearly every model has a counterpart in another brand. Yes, I realize that it's the historical pillar of GM. Yes, I realize that the brand recognition is the highest. However, it also offers the best opportunity to close a large number of dealerships without having to kill 3 separate brands. Is it easier to kill one vs three? I don't know, .

I believe the last three words of hot car's quote.

[jkennedy293]

Originally Posted by Lunden

How is the Outlook a rebadged Chevy?

The 2009 Traverse

[CadiEldo67]

Firstly, I love how all the Chevy guys jump on the boat to kill Pontiac, rivalry much?

Secondly, if GM does the 4 channels of brands the way it wishes to, it should work out.

• Cadillac-could stand alone
• Saab-if GM can't do it right, they should sell it
• Hummer-probably doesn't have a future

• Saturn-would be perfect if Pontiac had more of a sporty image

• Pontiac-Could be so much more than it is right now, I think that Mazda does the performance image way better, and they sold a pickup and a minivan for sometime, lol
• Buick-Buick is a global brand that does well in China, so there is no point in getting rid of it, they just need to make it work
• GMC-These guys are #2 in the lineup as far as car sales, no point in getting rid of them

• Chevy-stand alone brand, maybe Saturn could merge and could be the hybrid version of Chevy.

[LAMRONH]

Originally Posted by tgagneguam

Oops, the author goofed a bit. I'll fix it for him:

G.M.'s biggest problem, however, is its unwieldy bureaucracy replete with incompetent managers who couldn't manage a brand if their careers depended on it and who have zero accountability for their past failings.

It's funny, GM will be shaving divisions-since the market allegedly cannot support them-yet we will see the market welcome new [read: better managed] foreign nameplates arrive on this shore in the coming years. Many of them will somehow find success despite having lesser budgets and zero brand image in this country. Fancy that!

Yes, yes, but their careers would suffer if we fired them!

I've seen the same goings-on in the military and civilian sectors, where incompetent higher-ups retain incompetent middle managers because holding them accountable for their incompetence might hamper their careers.

Stupid is as stupid does.


Attributing corporate success or failure belongs squarely on the shoulders of management. Not brands, not inanimate objects, but management or lack of same.

[prototype66]

Originally Posted by zete

The number of brands isn't the issue, instead it's the fact each was a full line brand.

What we're seeing now is a niche strategy for specific brands -- Buick, Pontiac, Saturn -- while Chevrolet becomes the full-line brand.

With a niche strategy it will work fine. GM has the reach since they can spread the costs of a specific model around the world. The old GM would have each area have their own cars, but that's slowly disappearing. Pontiacs will be rebadged Holdens, which means Holden has an avenue in North America for their cars. Saturn are rebadged Opels, again, Opel gets an avenue in North America. Buick ends up being a total niche luxury player, focusing on comfort and unpretentious luxury and the Chinese market while Cadillac can go after everyone globally along with Chevrolet.

Killing Pontiac will hurt Holden. Killing Saturn hurts Opel. Killing Buick hurts Buick. And Buick is massive in China.

The article is written by someone who is so fixated on the North American part of GM they don't see the global picture. If the author had dug a bit deeper he'd have realized that what GM has been doing isn't simply consolidating dealerships but consolidating platforms. No longer are we going to see design and manufacturing replicate a small car for every market, instead they're looking at global platforms and global vehicles.

That's what Toyota does. And Toyota has started into niches with Scion.

Niches are the future. They won't sell like the main line, but they will keep people in the family when they no longer want the Chevrolet but want something more exotic. The niche brands will provide that, selling 200,000 - 300,000 vehicles a year tops. And as niche vehicles, GM can keep the supply limited and the profits high while Chevrolet can focus on those looking for a deal. Cadillac, once it regains its old luster, will simply charge a premium for being Cadillac.

And if you want to look at where the niche strategy currently works at GM look no further than Hummer. If that's not a niche vehicle, nothing is.

The most sensible statement made in this thread.

[ghughes]

Never heard of this mag. We know that franchise laws and other buyout costs make it extremely expensive to close a brand- Olds $2 billion, they dont have the cash to do it. Only Saturn, with its few dealers, would be a likely buyout brand. IN theory, the article is correct, fewer models with more ad dollars behind the limited lineup. You have to run ads incessantly, everywhere to boost and reinforce awareness.

[PAULSTS1]

Consolidation of business is the best plan as stated earlier: Pontiac, GMC, Saturn, and a new vehicle Performance Works (aftermarket Turbos, custom accessories) these dealerships should be responsible for Fleet Sales as well. This group would be positioned as the most active consolidation. Then Cadillac, Buick, Hummer, and SAAB, should handle GM’s Premium vehicle Programs. Finally Chevrolet cars and trucks, and some of the more popular GMC units should be under a single dealership.

Chevrolet should receive the maximum support from GM as this brand is absolutely required for corporate success. Over time the Pontiac, Saturn, GMC dealerships will either increase it's market share, or slowly be phased out, with Chevrolet gaining survivorship of the better products. The Premium Group, should have to adhere standards of: Look, Quality, and World Class Customer Service

[mgescuro]

Originally Posted by ronald mcretard

If GM killed Saab I would never forgive them. Besides, why kill it? I'm sure someone would buy it.

YES. Sell it to BMW!!!
It'll fill the gap in between Mini and BMW. Nor would it overlap the BMW lineup.

[jlt0x]

Originally Posted by FStephenMasek

Again - GM needs to advertise all of its brands together, not eliminate brands. The brands are an advantage. Le'ts use the Camry example from that article. Toyota only offers the Camry, Camry convertible, and Lexus ES, but GM offers the Malibu, G6, G6 convertible, Aura, 9-3, and 9-3 convertible, giving buyers a greater choice of interior and exterior styling.

I see what you're saying, but that's the problem. Toyota is selling those "few" models in the same numbers as GM is selling all those cars in the different brands. OK, GM does provide options in styling details, but the Malibu, G6, Aura, 9-3, & BLS are same/similar sizes and pretty much are the same vehicles just wearing different skirts. If GM only had 3 of the 5 models to design sedan, coupe, and convertible models for; they be able to offer better designs, option packages, etc. like Toyota is currently doing. AND it would be easier to market and update just the 3 models too. More funds for less mouths to feed.

[Astra RL]

Killing brands fails. We all saw what happened with Oldsmobile those buyers that were supposed to go to other brands in GM, went elsewhere. So, if GM were to kill Buick, Saturn, GMC, Saab, and Hummer, where would these customers go to. Certainly some would go to chevy/Caddy but very few. Some people will not consider a Chevy, but will gladly purchase a Saturn Aura.

[t-rex]

There's no reason why all of GM's brands, even the now-defunct Oldsmobile, couldn't survive, or even thrive, as full-line brands. GM damaged its brands, not the market.

Buick: soft, refined luxury. Priced between Chevy and Cadillac.
Cadillac: expensive luxury cars
Chevrolet: mainstream family cars and retro-themed models
GMC: upscale SUV's. Remake GMC along the lines of Land Rover/Range Rover.
Hummer: move to mainstream, competing with Jeep. Sell in Chevy showrooms.
Oldsmobile: midsize and up Opels, with new flagship models to be shared with Opel
Pontiac: the smaller Opels, and RWD products shared with Holden
Saab: Highly individualistic, aircraft-inspired cars, with no pretention of being "upscale"
Saturn: Inexpensive Daewoo-sourced subcompacts and compacts plus Opel's MPVs.

It'd take some fanagling to get the dealer channels right...

But if rationalisation is the answer, sell off Hummer and Saab (sadly, I don't think anybody would want either), kill GMC (I refuse to believe the vast majority of GMC buyers wouldn't migrate to Chevy), reshape Buick, and kill either Saturn or Pontiac, with the survivor of the two selling Opels and Holdens (I'm thinking Pontiac could do a better job of doing this).

Have three sales channels: mainstream Chevrolet, upscale/import Buick-Pontiac, and luxury Cadillac.

[neshapop]

Originally Posted by Astra RL

Killing brands fails. We all saw what happened with Oldsmobile those buyers that were supposed to go to other brands in GM, went elsewhere. So, if GM were to kill Buick, Saturn, GMC, Saab, and Hummer, where would these customers go to. Certainly some would go to chevy/Caddy but very few. Some people will not consider a Chevy, but will gladly purchase a Saturn Aura.

Your post is right on the money!

GM would save zillions of $$$ if they manage to get rid off all those marketing divisions and the army of paper pushers. Sometimes hurts to see how marketing guys will blow advertising budgets that may be nice contribution to Engineering or R&D. No money can fix your mess with the "cars" of yesterday. My father-in-law will not cross GM dealership door step even if they give away the cars for free. Baby boomers are lost for Big 3; they also teaching their kids what they have learned from their purchases and bad service experience.

Back on the topic, if GM kills Buick I will not buy Chevy, but I might consider Saturn Aura or Saab.