Does GM Need Separate Brands? (luxury, vehicles, sedans, minivans)
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I was glad to see GM do away with Pontiac, and Oldsmobile, though I did think Saturn still had a lot of promise. But in general, their overall lineup was full of too many models that were more or less competing with each other. Now that GM is down to Chevy, Buick, GMC and Cadillac, why not just merge the first three into one brand and simply call it GM? If you look at brands like Honda or Toyota, they basically have one mainstream brand and one luxury brand. Part of why I think GM should merge these three into one brand is to counter some of the bias that's out there against each brand. Take Buick for example. I bet there's someone out there who would be interested in the Lacrosse, but thinks Buick is only meant for old people. But maybe they'd reconsider if it was just the GM Lacrosse and didn't have the "old geezer" stigma attached to it. Likewise, someone might be curious to buy an electric car like the Chevy volt, but then pass on it because it has the Chevy label on it. I realize that merging the three brands would force GM to make more layoffs, close more dealerships, and kill of some more models, something they were either unable (no union bashing please) or unwilling to do. But GM nearly collapsed under the weight of its bloat. I would think they'd learn their lesson and want to be as lean as possible going forward.
Last edited by DennyCrane; 08-10-2010 at 12:27 PM..
I think GM should consolidate it's brands. Few people even know or care about history of the makes and even who David Buick and Louis Chevrolet were! Decades of poorly built cars have sullied their reputations anyway. I think a blanket GM brand would be better. What is REALLY stupid is having Chevy trucks and GMC. If they could lose the UAW, start a quality campaign, and "clean slate" themselves, they possibly could prosper.
This has been an ongoing debate for a long time. Outside of the dealer network issues and other concerns, GM could have existed as just Chevrolet and Cadillac. Similar to how Ford will be Ford and Lincoln, Honda and Acura, Nissan and Infiniti, etc.
Outside of that I can see the justification for keeping Buick and if their current success's (Regal, LaCrosse and Enclave) are an example, the brand can be returned to profitability. Cadillac has it's place as well and is on track to become relevant again.
The only one that leaves me head scratching is GMC. The commerical part of GMC was killed off a couple years ago and the brand is now nothing more than rebadged Chevy trucks, SUV's and crossovers (the retail brand really was never anything more than that). To make it worse, they now sell GMC and Buick at the same dealers where otherwise succesful vehicles like the Enclave and Acadia now compete side-by-side on the lot.
GMC could have been completely killed off without leaving any holes in the product lineup. The argument for keeping it was all about the dealer network. In many cases entire areas are serviced by only a GMC or Chevy dealer. There is some overlap, but not as much as people would think. This was the argument for maintaining it, on top of the fact that GM and their dealers had invested a lot of money combining Buick/Pontiac/GMC into single franchises.
To me the solution would be to create a truck/truck based SUV division within GM, similar to what Chrysler is doing with the Ram brand. I would name it "Chevrolet Truck" or something else that invokes what it is and simply create a dealer within a dealer at Chevrolet and rename the existing GMC dealers and kill the GMC brand. It might make sense on the surface to just make all trucks GMC's but GMC is a much smaller dealer network and IMO Chevy trucks have a much stronger brand identity and loyalty.
They would sell the Silverado line in various trim levels to run the gamut from base Chevy work truck up to what the current Sierra Denali is and they would also sell an Avalanche, Tahoe and Suburban in various trim levels. No crossovers, leave those as part of the car divisions. I guess the one exception would be the Escalade, but that can stand on it's own.
You would still end up with four market brands, but they would be more defined.
Chevy = Mainstream cars and crossover SUV's.
Chevy Truck = All trucks and truck based SUV's.
Buick = Asian luxury competitor.
Cadillac = Euro luxury competitor.
One mainstream and one luxury brand has been a proven success for many years for most companies.
GM needs to stop acting like total morons.
Ford seems to have figured it out. They killed off Mercury and now just have Ford and Lincoln. Granted, few people put Lincoln in same class as Mercedes or Lexus. But the point is that they realized you don't need redundant brands.
Surely this has been discussed before? Anyway, Buick is GM's brightest star in growth markets like China. Whether it can succeed again in the US remains to be seen. GMC should have been nixed, with Chevy and Cadillac carving up its bottom and top ends.
Pontiac had evolved into their high-performance marque, and I don't see anything wrong with carving up the market on a basis like that. A market consists of more than just three income tiers. Oldsmobile offered a different kind of styling than the Buick or the Chev, and there was a market for that.
I think GM really dropped the ball when they gave Olds the same features as their other cars, and tried to sell them by saying "they're not your father's Oldsmobile", which pulled the rug out from under buyers who wanted that particular style, and drove them across the street to somebody who was still making your father's Mercury.
When GM was making five separate marques, it was because there was a market for that many. There still is. But the emphasis has shifted. No longer do they listen to the market and design a car for the buyers. Instead, they make one car and try to convince the market that that's what it wants.
When GM was making five separate marques, it was because there was a market for that many. There still is.
No, there wasn't. At least not in the 1990s and 2000s when GM was seriously thinking about cutting redundant brands. It's immaterial talking about GM's heyday in the '50s and '60s.
And there definitely isn't a market for all these brands now. Just to show how much you're overestimating the # of buyers, even after Mercury got the former Oldsmobile buyers you're talking about, it still wasn't enough to sustain them.
Olds and Mercury are both dead because there weren't enough distinct buyers for them. These people will buy Chevys, Buicks, Fords, Lincolns, etc. instead. The number of net new buyers that would be added by an Olds or Mercury brand are unprofitably low.
When GM was making five separate marques, it was because there was a market for that many. There still is. But the emphasis has shifted. No longer do they listen to the market and design a car for the buyers. Instead, they make one car and try to convince the market that that's what it wants.
There hasn't been a market for that since the 1980's.
Pontiac had evolved into their high-performance marque, and I don't see anything wrong with carving up the market on a basis like that. A market consists of more than just three income tiers. Oldsmobile offered a different kind of styling than the Buick or the Chev, and there was a market for that.
You can achieve this within a brand. Look at Toyota. They produce pickup trucks, SUVs, family sedans, minivans, compacts, and hybrids. So instead of creating a new brand for each niche, they simply offered products for each type of customer. The Avalon appeals to the older buyers who have a good amount of money to spend whereas the fresh grads can get a Corolla. You can even offer different styling within a brand. Whereas the Lexus ES looks like a boring sedan, the IS looks sporty.
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