GM to Forge Ahead Without Key Brands
Tuesday, April 28, 2009
For generations of American drivers, a car brand was more than a collection of statistics describing performance, safety and design. It was an affair of the imagination.
Yesterday, General Motors traded imagination for reality, saying it will dump Pontiac along with Hummer, Saturn and Saab -- and placed its future in the hands of Chevrolet, Cadillac, Buick and GMC.
"It's a pretty sad day," said Jack R. Nerad, executive editorial director at Kelley Blue Book, a leading provider of information on new- and used-vehicles. His first Pontiac was a used 1968 Firebird, one of the most beloved compact muscle cars.
"It was visceral," he said. "It was something, it appealed to your emotions. That's what they were selling. At one point the slogan was 'We build excitement.' "
Yet the excitement faded when GM began introducing vehicles like the Trans Sport minivan, effectively killing Pontiac's sex appeal.
In striving to create "a car for every purse and purpose" -- a company strategy -- GM aimed to sell you your first car (a low-end Chevrolet) and your last (a pricey Cadillac). Instead, analysts said it created too many similar vehicles under too many brands.
The Pontiac Sunfire, Sunbird and Phoenix looked a lot like models sold under Oldsmobile and Chevrolet.
GM, which has received $15.4 billion in federal loans, has lost market share to leaner foreign rivals. Now it must make deep cuts to win additional government aid and survive.
Four brands could be the magic number.
Toyota and Honda have carved out a significant chunk of the U.S. market selling three or fewer brands. Recently Chrysler cut its lineup to three, and Ford is also working to reduce its count.
Fewer brands could mean more money for Detroit's automakers to develop and market their vehicles against a growing number of U.S. competitors, analysts said. Before, those funds were spread too thin.
At its peak in 1986, Pontiac sold 841,441 cars -- three times as many as last year. The brand had begun to flounder in a marketplace asking for cleaner, greener vehicles. GM has not announced its plans for Pontiac; dealers will be in talks with the automaker today.