GM Ready To Roll In 2007: New "plan" creates 4 Core & 4 Focus Brands

[nadepalma]

Source: http://www.forbes.com/markets/2006/0...markets02.html

GM Ready To Roll In 2007: Report
By R.M. Schneiderman



Ailing auto giant General Motors will begin to see the benefits of its new product line starting in the first quarter of 2007, according to a Thursday report by Credit Suisse.

Rob Hinchliffe, an analyst for the research firm, said negative margin trends should continue throughout the third quarter for the company, before improving slightly in the fourth.

The report was released following GM's analyst day on Wednesday during which the company introduced new products such as T900 pickup and the Lambda crossover SUV.

"GM will launch a rich, crew cab T900 pickup mix in October with two of the five plants up and running this year," said Hinchliffe. "The Lambdas look great, with a risk of cannibalizing existing GM customers."

The Detroit-based company also offered further details on its strategy going forward.

"GM's plan creates four 'core' brands which include Chevy, GMC, Cadillac and Saturn," said Hinchliffe.

"These will be supported by four 'focus' brands which include Buick, Pontiac, Hummer and Saab. This strategy will require GM to scale down Buick and Pontiac in the near-term until these brands have a clear…identity."

On Thursday, GM (nyse: GM - news - people ) Chief Executive Officer Rick Wagoner also announced that his company will bring back its muscle car, the Chevrolet Camaro, beginning in 2008.

Chevy began making the Camaro in 1967, before putting a halt to the speedster in 2002. The new models will begin retailing in the first quarter of 2009.

UBS maintained a "reduce" rating on the company with a target price of $24.

[mbukukanyau]

It always amazes me how focused GM analystsare on North America. To Unlock GM's Value, you have to look at the Global Giant, not its North American product line.
If GM is faltering In China and India, I would be more worried, becouse that is where future growth is going to come from.

[Ultra Magnus]

So does this mean GMC will carry the BPG group/dealerships?

[t-rex]

Originally Posted by Ultra Magnus

So does this mean GMC will carry the BPG group/dealerships?

GMC have been carrying the BPG dealers in this area (South Louisiana) for quite a while now...

[nadepalma]

Originally Posted by Forbes

"GM's plan creates four 'core' brands which include Chevy, GMC, Cadillac and Saturn," said Hinchliffe.

"These will be supported by four 'focus' brands which include Buick, Pontiac, Hummer and Saab. This strategy will require GM to scale down Buick and Pontiac in the near-term until these brands have a clear…identity."

This is obviously where they've been moving for some time -- it really isn't "News" so to speak. But its good to see they're officially mapping it out.

[01cavalier]

Smart way to handle all of the divisions. I'm guessing Buick and Pontiac will make a more complete car lineup. Good thing they will be working on the brand identities and differentiate them better.

[2648562]

I'm sorry but if GM is having trouble figuring out Hummer's identity and their place in the market, then they ARE in need of some serious help. And Scaling down Buick, Pontiac, and Saab is a great way to KILL their identity along with their divisions. I hope this is just a BS article and that the powers that be at GM have a little more foresight and common sense than this.

[New_Mexico_Sunset_on_Rt66]

I think Buick should target Nissan. Because Nissan does seem to have just a higher perception that Toyota. Toyota is kinda like Chevy, the car for "everyman". Where Nissan seems to have a more performance, upscale lineup. At least, thats the perception. Buick needs a mix of performace and luxury. The Velite would have done wonders to turn the perception of Buick on its head. If the LaCrosse had stayed truer to the "concept", that would have helped too. The current LaCrosee looks too much like the large Hyundia from the front.

Pontiac can go more performance. Solstice, GTO, G8. Targeting the Euro-performance cars.

This does sound like bad news for Buick and Pontiac though. Because if this "branding" does not work, then they are gone.

[Lichtronamo]

Why GMC would be a "core" brand is strange. It would seem to be a "focus" brand, which when lumped together with Pontiac and Buick creates a sustainable dealer model.

Also, if the idea is to reduce Pontiac and Buick to gain focus, why then the G5?

And why offer both the Arcadia and Encalve in the same show room? The rumored Chevrolet version of the Lambda crossover further muddles the picture. It would seem the Lambda should be a Chevy, Saturn, Buick product.

Leave GMC with the Yukon/Denali and T900 products, Cadillac with the Sigma based SRX and the Theta II based BRX (with a version for Saab) as well as the Escalade and Escalade ESV (make the EXT a GMC).

[63cat]

Buick consistently finishes as the most dependable GM product. The Lucerne is a hit, and the Enclave is getting rave reviews. Add a halo car and they'll be set. Personally, I think Buick should be getting more product not less, and Saab with poor sales and poor reliabilty should be cut back.

[Ultra Magnus]

Originally Posted by Lichtronamo

Why GMC would be a "core" brand is strange. It would seem to be a "focus" brand, which when lumped together with Pontiac and Buick creates a sustainable dealer model.

Also, if the idea is to reduce Pontiac and Buick to gain focus, why then the G5 and offering both the Arcadia and Encalve in the same show room?

Not to short change one over the other. THe Arcadia is more substance, while the Enclave is style. I dont think you will get a lot of cross shoppers for these two.

[tgagneguam]

Originally Posted by Lichtronamo

Why GMC would be a "core" brand is strange. It would seem to be a "focus" brand, which when lumped together with Pontiac and Buick creates a sustainable dealer model.

Also, if the idea is to reduce Pontiac and Buick to gain focus, why then the G5 and offering both the Arcadia and Encalve in the same show room?

I, too, was a little surprised at the lumping of brands, specifically GMC as a core brand. And your question is spot on, Lichtronamo, though I think that your aforementioned rebadges reflect the fact that GM hasn't quite figured out the details of their plan.

I believe that there was a time when Buick, Pontiac, Oldsmobile, and Chevrolet (of course) simultaneously sold at or north of 1 million units per annum... and to some degree maintained separate identities. Targeted correctly, I do think Buick and Pontiac could be more than focus brands, selling in similar price ranges but appealing to different customers; to say that all persons shopping in the $15,000 - $35,000 price range are clones is a bit naive. I bet a VW customer rarely cross-shops a Honda, and vice versa.

Of course, some may disagree with GM's plan, but it's refreshing that after so many years of aimlessness, GM seems to be trying to solidify each brand's purpose. As long as they stick with it, the above plan doesn't sound bad at all, actually.

[macphisto]

The thing is that GMC is GM's #2 selling brand. Since it's core then there's no need to significantly reduce the cars it's outputting. It certainly will be the bulk seller at the Pontiac/Buick/GMC dealers.

I'd love to see Saab combined with Saturn and sold at Saturn dealerships.

Saturn definitely has some growth coming its way.

[mikesright]

Wow, these guys figure this out a year after GM announced this and they STILL get it wrong? I guess that's why they call them anal-ysts.

Here's the deal. Chevy and Cadillac will be the anchors with full lines. The rest don't have a full line, and are focused in different areas. Saturn will be the euro- and japanese-fighter, GMC will be truck and SUV-based, and more premium than Chevy, Pontiac will be performance- and women-oriented, Buick will target entry- and mid-luxury segments (Lexus-fighter), Hummer will be off-road oriented, Saab will be Euro-Luxury.

And this has nothing to do with product strategy here, other than to start to get models previously announced to start appealing to different people, and using the muliple brands GM has as an asset, and not a liability like it was previously. Pontiac will get models like the G5 because they needed entry-level cars. Buick will be pared down to avoid overlap with GMC and Pontiac, and to facilitate the new RX-fighter, the Enclave, and will get a new RWD lux coupe/convertible once Zeta comes on-line.

[Kheiron]

Originally Posted by macphisto

The thing is that GMC is GM's #2 selling brand. Since it's core then there's no need to significantly reduce the cars it's outputting. It certainly will be the bulk seller at the Pontiac/Buick/GMC dealers.

I'd love to see Saab combined with Saturn and sold at Saturn dealerships.

Saturn definitely has some growth coming its way.

that is not a bad idea at all. However, if GM would have done that with Olds it would have made more sense. But now this pairing seems good. The problem is the dealer network, how would you combine them, expand at Saab dealerships or ?