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GM May Kill Off One of Its Brands

Responding to sluggish sales, General Motors is contemplating killing off one of its vehicle lines, likely Pontiac or Buick.

GM Says It May Kill Off One of Its Brands (Reuters)

General Motors Corp., which issued a shock profit warning last week and has been losing market share, may phase out one of its weaker car brands if sales fail to meet projections, company Vice Chairman Bob Lutz said on Wednesday. GM’s Buick and Pontiac are both “damaged brands” due to lack of investment over the years, and GM is working to correct that with an array of new vehicles coming to market, Lutz told a Morgan Stanley automotive conference in New York. But if some of its brands fail to meet sales projections, “then we would have to take a look at a phase-out. I hope we don’t have to do that. What we’ve got to do is keep the brands we’ve got.”

Financial analysts have said for years that the world’s largest automaker has too many brands to support, even with the gradual phase-out of the Oldsmobile brand a few years ago, particularly with its weaker U.S. sales.

Sales for both Pontiac and Buick have lagged in recent years. But GM is in the midst of a $3 billion investment in new vehicles for Buick, and Pontiac showrooms and they will have four new vehicles this year, including the Solstice roadster, Torrent SUV and the G6 mid-size coupe.

GM currently has more brands than I can remember: Chevrolet, Pontiac, Buick, Cadillac, GMC, Oldsmobile, Saturn, Hummer, and Saab for the North American market plus Holden, Opel, and Vauxhall for overseas.

Chevrolet is a classic American middle class vehicle. Cadillac was the classic American luxury car. Buick and Oldsmobile are redundant semi-luxury lines aimed at those who want a Caddy but can’t afford one. Pontiac was traditionally a sporty line aimed at younger customers but is now undifferentiated. Saturn is a nerdmobile aimed at people afraid of car salesmen. GMC is a Chevy truck with a different grille. Hummer is, well, Hummer. Saab really isn’t a “GM” at all, just owned by them.

Among the traditional GM lines, I’d argue that they should keep Chevy, Cadillac, Saturn, Hummer, and Saab as is. Pontiac should be the brand of all GM’s sporty cars–and only its sporty cars–minus the Corvette, which is too identified with Chevy to rebrand. GMC should either be killed off or all GM trucks should carry the GMC label.

Update (1206): Wizbang’s Paul argues GM should take a page from Ikea’s book and make their cars un-boring.

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About James Joyner
James Joyner is the publisher of Outside the Beltway, an associate professor of security studies at the Marine Corps Command and Staff College, and a nonresident senior fellow at the Atlantic Council. He's a former Army officer and Desert Storm vet. He has a PhD in political science from The University of Alabama. Views expressed here are his own. Follow James on Twitter.

Comments

  1. Brian J. says:

    Didn’t they already kill the Oldsmobile line?

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  2. James Joyner says:

    Oddly, they are phasing it out, which strikes me as worse than killing it.

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  3. Scott Dillard says:

    Why not just call everything GMC? There’s no reason anymore for all these “different” brands. Or maybe do like the Japanese lines, and have one for the main fleet, and a high-end brand, such as Lexus, for the top end.

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  4. denise says:

    I’d go with eliminating Pontiac; as you said, it is now undifferentiated.

    There is a key demographic (older white folks) that is really loyal to Buicks. They shouldn’t mess with that.

    Btw, I’ll never understand the point of making Tiger Woods spokesperson for Buick. It instantly aged him about 47 years, and I don’t see that it did anything for the brand.

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  5. GM should do what Dodge did with Chrysler. Not that long ago, Chrysler was just “Dodge cars made to look a bit more luxourous.” You can’t really argue that Town and Country was anything but a repackaged Dodge Caravan with leather seats. They completely retooled the Chrysler line, and it is selling really well now. They seem to have completely ditched the Plymouth line, which had become “Dodge, rebranded and completely unchaged”. GM needs to focus in a similar way – a plan of action similar to the one you describe would be one way to do it.

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  6. The Q Speaks says:

    Whither Buick and Pontiac?
    GM might kill off their Buick and Pontiac brands if they don’t peform soon after some recent investment in new vehicles…

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  7. Begging News says:

    GM says that it has no plans to phase out any of its divisions

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  8. Tyler Watts says:

    A lot of times I think I would never buy a GM vehicle. I have always thought it is rediculous how there is a single truck/car/minivan being sold with a different grill under 4 different names. Doesn’t really make sense to compete for customers within your own company. I would, however, buy a GM for the heritage of certain vehicles. Of course the Corvette comes to mind, but there is a car in the GM lineup that has been around just as long as the corvette, yet it’s head is on the chopping block.

    The Pontiac Bonneville was first introduced in 1954, and has remained in the pontiac lineup ever since. The Bonneville is the only American production car to earn, and not be given, it’s racing name. The car earned the Bonneville name after winning land-speed records there in 1956. If GM considers merging/killing off Pontiac, they should consider the heritage of the Bonneville, re-design it, keep it’s name, and do away with one (or a few) of the other bland sedans GM has come up with.

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