Are more car brands heading for the junkyard?

[Ming]

Are more car brands heading for the junkyard?
Struggling U.S. automakers seen killing off brands to remain competitive
By Roland Jones
Business editor
MSNBC
Jan. 6, 2006

Image is almost everything in the automotive business. If a car has a musty, old-fashioned aura surrounding it, it could turn off a would-be car buyer. As a general rule, the more appealing the car is, the stronger its sales.

That’s why five years ago General Motors announced plans to discontinue its aging Oldsmobile brand, at the time, the oldest surviving make of automobile in U.S. history with 107 years of car production under its hood. Oldsmobile no longer represented the vigorous confidence of America. Names like the Toronado and the Aurora, which in their glory days may have sounded bold and flashy, would fail to get twenty-first century pulses racing.

Now a handful of other well-known American automobile brands could be destined to follow the Olds to the great scrap yard in the sky.

With Detroit facing continued erosion of its U.S. market share by Asian and European automakers, and also a crippling healthcare bill for their U.S. workforce and pension costs for retired workers based on out-of-date agreements they can no longer afford, it’s generally thought amongst industry observers that Ford and GM need to pare down their bloated stable of car brands, many of which overlap, lack identity and fail to grab the attention of younger car consumers.

Last year Bob Lutz, GM's chief of product development, warned that the automotive giant may phase out one of its weaker car brands if sales fail to meet projections. Buick and Pontiac appear to be leading candidates for the chopping block, as Lutz described the two brands as “damaged” due to lack of investment over the years, adding that GM is working to correct that with an array of new vehicles coming to market.

Financial analysts have said for years that U.S. automakers like GM have too many brands to support. Sales for both Pontiac and Buick have lagged in recent years, and with sales also declining for Ford’s Mercury and Lincoln brands, many have questioned whether they can survive in the long term. An elimination of any one of these car brands would likely mean plant closings and significant layoffs.

“Detroit needs to increase its competitiveness by focusing on things it does well, like Ford’s F-Series pickup trucks, and they need to discard brands that have outlived their usefulness, like Buick, Mercury and perhaps Pontiac,” said Daniel Gorrell, an automotive analyst at Strategic Vision, a research and consulting company.

With U.S. car companies like GM, with its eight U.S. car brands, including Chevrolet, Hummer and GMC, Detroit has allowed itself to fall into decline by trying to maintain their size, but not supporting all their product lines Gorrell said.

“They should have realized that they need to get real about their situation and need to focus on one thing and do it well,” said Gorrell. “Toyota can cover the U.S. market adequately with three brands — the Scion, Lexus and Toyota, but GM is struggling to do it with eight,” he added.

It’s not just U.S. car brands that appear to be teetering on the brink.

In Asia, Japan’s Isuzu and Mitsubishi have seen a dramatic decline in their U.S. market share in recent years.

Article Source: http://msnbc.msn.com/id/10617131/

[Buickman]

Simply well placed, strategic hype to support the overall plan to produce offshore and own the distribution. Wagoner intentionally killed Olds and is out for another mark. He wants to consolidate franchises before closing in order to face lessened legal entanglements. To hell with the unions and the dealers, he wants it all even if it means bankruptcy and the decimation of communities and families across the country. No one is so sequentially stupid as to lose a point of share year after year. The last hurrah will be the sale of GMAC. The man knows exactly what he is doing and the Board of Bozos supports him. That's why they don't want Kerkorian on board. With his massive investment, he wouldn't stand for the intentional self-destruction.

Buickman
Founder
www.GeneralWatch.com

[lightbrotha2004]

It was a sad day when I found out Olds was being killed. I'm a younger guy and I loved all that Olds offered i mean i even loved the last Buicks. Someone needs to over throw them and do what needs to be done to keep GM from tanking.

[Buickman]

I'm trying. Went to Wilmington last summer for annual meeting and called for Wagoner's resignation. Have appeared on national TV, radio, and newspaper. Hundreds of subscribers to GeneralWatch. Working with UAW, dealers next Big plans for this year's meeting.

[tripowergto]

FACT: GM sold TWICE as many vehicles in the US in 2005 with it's 8 brands then Toyota did with it's 3. Why do they need to get rid of any brands? The demise of Olds only cost GM market share. These articles are truly getting old!!

[toronado10]

I think Oldsmobile got killed just because Chevrolet grew into its product line. Every other brand still had some special "appeal."
Chevy = Value
Pontiac= Sport
Oldsmobile= Grown up Chevy for the middle class
Buick= Entry-Luxury
Cadillac= Luxury

[atomicshark]

Every time I read stories like this I cringe.

I hope GM learns it's lesson from Oldsmobile.

If GM kept Olds up-to-date they would be selling at least 300,000 units a year.

Instead Olds was killed and GM lost market share.

If GM kills Pontiac or Buick it will lose even more market share. People will not automatically drift to Chevy or Saturn etc.

[Tiger]

GM added Saturn, discontinued Oldsmobile. Isn't that a draw?

Toyota added Lexus to compete with Cadillac/Lincoln/BMW/MB.

Toyota rebadged a killed Echo platform and gets worshipped?

[asim]

I don't think that they are getting rid of a brand anytime soon.

Saab has its loyalists
Saturn has its turn around
Pontiac has the Solstice...and a new GTO
Buick has the good elders that GM would hate to lose
GMC makes too much profit
Hummer has its fans too

[bhoppes]

I realize that GM has said that Oldsmobile will never return, but does anyone think otherwise? GM has proclaimed other promises, that were really never kept. Didn't GM say at one point that Cadillac would never enter the SUV market? I do not recall how many cars Olds sold before their death was announced, but lets say it was 100,000. That was 100,000 more cars GM sold, and that number would have probably went up if GM would have continued building and improving cars such as the Intrigue, Aurora, and Alero. I sincerely believe if GM would bring back Olds, they would not have quite as many problems as they do now. When people who owned Oldsmobiles decided to buy a new Olds and found out they were not being made anymore, where do you think those people went? No offense but, I would have definitely rather saw Buick be cut rather than Olds.

[Strapping.Young.Lad]

Same I like olds better than buick. Olds was really innovative. Buick was just......?

[63GrandSport001]

Killing off Olds was a big mistake by GM and they still havnt recovered from it.

You can sell more cars with 6 brands then you can with 1 brand, for some reason some people want Buick (GMs second highest volume behind Chevy) Killed and Pontiac killed as well. And what reason do people want these two brands killed, the combined killing would cost GM 500,000 sales a year in the US alone.

Buick may have the image of boring old people movers but they do make some great cars. They really need a car to change their image from the boring old people movers and people will pay more attention to the rest of their product line.

Pontiac just needs to continue its current path and continue to get product the differenciate it from Chevy even more. The Pontiac G6 was a good effort and a big step in the right direction for Pontiac. Now people can look at the Pontaic G6 GTP when looking at cars like the Honda Accord V-6 and the likes of others like it. It may not be the best in the class but its much better then the out going model and it does some things really well. A RWD Pontiac G8 will be a really good way to go as well, I see Pontiac having a bright future.

[chadbarb99]

Originally Posted by lightbrotha2004

It was a sad day when I found out Olds was being killed. I'm a younger guy and I loved all that Olds offered i mean i even loved the last Buicks. Someone needs to over throw them and do what needs to be done to keep GM from tanking.

Don't feel bad, Saturn is pretty much the new Oldsmobile.

[kenman923]

Originally Posted by bhoppes

I realize that GM has said that Oldsmobile will never return, but does anyone think otherwise?

My motto is "never say never." GM could bring back the Olds brand by popular demand.

There's also a possibility, but I think it's slim, that DaimlerChrysler could split into two different companies like CBS and Viacom did and the Chrysler company could bring back Plymouth.

[Black04GTO]

Originally Posted by atomicshark

Every time I read stories like this I cringe.

I hope GM learns it's lesson from Oldsmobile.

If GM kept Olds up-to-date they would be selling at least 300,000 units a year.

Instead Olds was killed and GM lost market share.

If GM kills Pontiac or Buick it will lose even more market share. People will not automatically drift to Chevy or Saturn etc.

I agree. In fact, I believe that the future of Pontiac will be known when the 2008 GTO decision is announced...if no 2008 GTO, no Pontiac. Except for the G6 and Solstice, all other Pontiacs are rebadged duplicates...the "Performance Division" needs a RWD Grand Prix and the GTO. With the new Camaro in the Chevy corral, and the Saturn Sky, Pontiac will need a reason to exist...hopefully, GM builds a few reasons for Pontiac.