Toyota wouldn't have grabbed the global sales crown if GM hadn't killed Oldsmobile.

[Oracle of Delphi]

Toyota surpassed GM in sales, but what if?

Edward Lapham | Automotive News / May 1, 2007 - 11:51 am /

It's been a week since we learned that Toyota nudged past General Motors to become the world's No. 1 automaker in the first quarter.

Since then, not much has changed. The sun still rises in the east and sets in the west. I know, I've checked.

In autodom, factories are still building cars and trucks, and dealers are still selling them, although not as many as they might like. I know, I've checked.

The price of gasoline has continued to climb and is now more than $3 a gallon in most U.S. markets. I know, I've paid it.

There has been the predictable patter in print, on the Web and in other electronic media.

From Toyota, the new No.1: Aw, shucks, we feel blessed to be so successful in the world's greatest industry, which has so many strong, wonderful competitors.

From GM, the former No. 1: Hey, it's OK because now we're going to concentrate on profitability and increasing shareholder value.

From commentators galore: We saw this coming; it was inevitable; GM is doomed.

What if?

But the most intriguing thought came from one of my colleagues who claims Toyota wouldn't have grabbed the global sales crown if GM hadn't killed Oldsmobile.

His rationale is that even in the yuckiest years, Olds dealers sold enough cars and trucks that, if thrown on top of the sales heap, would have been sufficient for GM to keep the title.

It's a seductive thought. After all, Toyota only nosed out GM by some 90,000 units, 2.35 million to 2.26 million.

Admittedly, the math is a stretch.

In 2000 -- the year GM announced it would whack Oldsmobile -- dealers sold 289,172 Olds cars and trucks. One quarter of that is 72, 293, still not enough to carry the day.

A year earlier, dealers sold 352,197 Oldsmobiles. One-fourth of that is 88,049, which would make the global sales battle a tossup.

Of course, you need to discount that raw total to account for former Olds customers -- especially employee buyers -- who switched to other GM brands. Then you need to add back the number of Olds buyers who switched to Toyota, Lexus or Scion.

(This is getting to be a complicated what-if story problem, isn't it?)

Another number

Let me throw in one more number: The $2 billion that GM is said to have paid dealers and lawyers to make the Oldsmobile franchise go away. If that $2 billion had been used for something else -- like, say, product development -- might it have meant incrementally more sales in North America or elsewhere?

Honestly? Probably not, because GM still has too many brands to feed.

I know, I've checked.

[enzl]

You know, if the Queen had testicles, she'd be King!

[VenSeattle]

You know, if the Queen had testicles, she'd be King!

Actually... a King can be castrated and still be King. It requires another piece of equipment.

[Oracle of Delphi]

Actually... a King can be castrated and still be King. It requires another piece of equipment.

A crown?

[ocnblu]

Water under the bridge. GM needs to keep developing kickass new products for now and the future.

[CARBIZ]

Yeah, we've kicked this can around before. Just lost 2 more Alero customers this week. Leases up, gone elsewhere. Interesting story with this "new Canadian" guy last night: he has always driven Oldsmobiles since he came to Canada 20 or so years ago, liked them and they have brought him good luck. He was able to keep buying domestic, against his spawn's growing complaints, because he had "always" had Oldsmobile. What can he do now? No more arguments, the spawn win and off he goes in a Mazda.

Still, I hope GM can look back in ten years and see that killing Oldsmobile was a good thing. On a personal level, it has hurt me and many Chevrolet stores in Canada because we were always paired with Olds. Now we have nothing to offer our "upscale" clients and we are losing them in droves. I am sure GM hoped they would go to Buick or Saturn, but I doubt that is the case.

[Z-06]

Water under the bridge. GM needs to keep developing kickass new products for now and the future.

Absolutely. A live ass is better than a dead lion. At least we can make the ass work and carry our luggage on its back, rather than pouting on the legacy of the lion which is already in the grave.

[Sixty8panther]

Let Toyota be no.1 and reap all the "benefits".

While Oldsmobie would have postponed the

drop of GM to no.2 that's not the point of

why Olds should have been kept.

[PurdueGuy]

ah, the monthly "if only they hadn't killed olds" thread...

Edited May 2, 2007 by PurdueGuy

[Windy-57]

Yeah, the Olds topic is way overplayed.

And here's another thought; Toyota would have taken the crown from GM a long time ago if they would have used the same level of incentives and fleet sales. But they didn't because it's bad business...which is also why GM is backing off.

[FAPTurbo]

Do Mopar forums have monthly 'If they hadn't killed Desoto' or 'If only they hadn't gotten rid of Imperial' threads?...

[Satty]

Do Mopar forums have monthly 'If they hadn't killed Desoto' or 'If only they hadn't gotten rid of Imperial' threads?...

Only when 68 visits.

[Flybrian]

That was a very vacuous article.

[PrimeGTP]

With all the various "ifs" and "buts" added into the article, the author might as well have said at the end "Yea, this article was completely pointless and I just wasted 5 minutes of your time."

[thegriffon]

If only GM hadn't sold the heavy truck business to Isuzu and Volvo, they'd still be No.1. If only light pickups in most of the world were still sold as GM models instead of Isuzus, GM would still be No.1.

[PrimeGTP]

If only GM offered complimentary nude models in the back seat of every car, they'd still be #1!

[thegriffon]

The question to be asked is, "do we really want to be in these businesses, just to match Toyota?". GM could probably make up the deficit just by selling the Captiva in China.

[AxelTheRed]

Toyota's number one...big deal. Its not a bad thing GM is focusing more on being profitable right now. Give it time, once GM is good and healthy again it won't take much for them to snatch back the #1 spot.

[Sixty8panther]

Do Mopar forums have monthly 'If they hadn't killed Desoto' or 'If only they hadn't gotten rid of Imperial' threads?...

Plymouth is the brand that was killed within a few months of

Oldsmobile... DeSoto barelly outlived Edsel & Imperial has

been dead as long as I've been living in the USA.

Those POS K-car sedans from the early 1990s do NOT count.

[Windy-57]

Toyota's number one...big deal. Its not a bad thing GM is focusing more on being profitable right now. Give it time, once GM is good and healthy again it won't take much for them to snatch back the #1 spot.

Not only is it not a bad thing, it's a good thing.

So looking forward, how can GM use the, "Toyota is #1" to their advantage? I don't really like it when the any of the Big 3 run a "Buy American" campaign (It's usually a fleeting attempt to make some short term sales), but if ever there was time for it...

Think about it, not only can they make some sympathy sales, they have some seriously improved products out right now and might return some of those sympathy buyers to loyal GM buyers on strength of product.

[Flybrian]

Difference between Olds and Plymouth - people miss Olds.

[CARBIZ]

Plymouth was the #3 nameplate for many, many years until horrid badge engineering, starting in the late '60s killed it off. The Aries/Reliant twins were probably the final nail in the coffin. I see a lot of similarities with what GM has been doing to Pontiac/Chevrolet of late. At one time, Plymouth outsold Dodge 2:1 and more. Slowly, Plymouth's badge jobs killed its sales, while Dodge's sales remained the same.

Do we think that is impossible for Chevrolet/Pontiac? It is already happening in Canada.

[A Horse With No Name]

You know, if the Queen had testicles, she'd be King!

Freddy Mercury sang for Queen and had testicles but didn't drive a Mercury.

That being said I am sorry to see Olds gone.

G.M. still needs to cut a lot of duplicate platforms. Don't know how they are going to do this.

Chris

[A Horse With No Name]

Difference between Olds and Plymouth - people miss Olds.

Come to the Mopar nationals here in Columbus, Ohio sometime. People old enough to remember still miss Plymouth. They built some great cars.

Ever see a 64 Sport Fury? Plymouth used to build great cars!

Granted I miss Olds a whole lot more.

Chris

[Camino LS6]

Well, change just one variable in the market and GM is still #1.

For instance, fleet sales are way down at GM but way up at Toyota.

Hollow victory.

Still a horse race.

Likely to be for a long time.

The margin is tiny.

Things change fast.

[gm4life]

I loved Olds products too, like first and second gen Aurora, Intrigue and the many "old" Cutlass models, but seriously Olds was getting to sporty and had to much luxury stepping on Pontiac and Buick's toes. Before the Lucerne and Enclave came out I said Buick should have been killed instead. After seeing the new Park Avenue (that we should get here even if in little numbers) and the Riv concept my mind changed. We can't change what happend in the past and if they kill Pontiac for all you Pontiac haters out there they would loose even more sales too. If BGP is treated as "one" full line like Chevrolet, GMC trucks, Buick luxury and Pontiac, sport there is no reason why that shouldn't work out well.

[CARBIZ]

But in GM corporate-speak, they want dealers to nurture their own customers and keep them in the family. The P-B-GMC side will be able to do that. This has always been the set-up in Canada. Canada used to have Chevrolet-Oldsmobile paired, so you could put someone in a Cavalier, then maybe Malibu and then Intrigue. How are the Chevrolet dealers, whose shoulders the direct relationship falls to, supposed to do this now? Just last night a man walks in with his 5 year old Aurora, looks at the Impala, shrugs and walks away. Sure, I can put on my GM badge and send him over to a Buick store to look at the Lucerne (and, believe me, with 7 passenger customers I have sent a lot of people over to look at the Acadia!), but I am a commissioned salesperson who sells Chevrolet!

In some markets, it may work that a Alero or Aurora customer would consider an Equinox or Tahoe, but as gas prices rise people will seek luxury in smaller packages. Pure snob appeal is keeping some people from buying a Chevrolet, even if they like the vehicle!

Perhaps 35 years ago when GM commanded half the market and customers were fiercely loyal, it did not matter if someone outgrew their Nova and bought a Lesabre - there were plenty of GM loyal customers to go around, and I suppose Canadian dealers were pretty spoiled in the '70s and '80s selling Chevrolet and Oldsmobile under one roof, but those days are gone.

I wonder if they day will come where there will be just one big GM sign and however many brands are left are sold under one roof.

[Windy-57]

But in GM corporate-speak, they want dealers to nurture their own customers and keep them in the family. The P-B-GMC side will be able to do that. This has always been the set-up in Canada. Canada used to have Chevrolet-Oldsmobile paired, so you could put someone in a Cavalier, then maybe Malibu and then Intrigue. How are the Chevrolet dealers, whose shoulders the direct relationship falls to, supposed to do this now? Just last night a man walks in with his 5 year old Aurora, looks at the Impala, shrugs and walks away. Sure, I can put on my GM badge and send him over to a Buick store to look at the Lucerne (and, believe me, with 7 passenger customers I have sent a lot of people over to look at the Acadia!), but I am a commissioned salesperson who sells Chevrolet!

In some markets, it may work that a Alero or Aurora customer would consider an Equinox or Tahoe, but as gas prices rise people will seek luxury in smaller packages. Pure snob appeal is keeping some people from buying a Chevrolet, even if they like the vehicle!

Perhaps 35 years ago when GM commanded half the market and customers were fiercely loyal, it did not matter if someone outgrew their Nova and bought a Lesabre - there were plenty of GM loyal customers to go around, and I suppose Canadian dealers were pretty spoiled in the '70s and '80s selling Chevrolet and Oldsmobile under one roof, but those days are gone.

I wonder if they day will come where there will be just one big GM sign and however many brands are left are sold under one roof.

This is exactly why I've been a big proponent of no more branded GM dealerships, but rather just GM dealerships. (I realize this is a blanket statement and some stores should be branded.) Two main reasons:

1. You'll take the moral dilemma away from a Chevy dealer who knows that the buyer wants a Buick (or something else).

2. You'll attract more buyers. Fact of the matter is, most people don't know what they want. If they knew that they could go to a GM dealer and see 8 different brands of cars, that would be a logical stopping point. Also, you'll increase brand traffic. Example: you'd have a Cadillac buyer who would never set foot in a Saturn dealer see the new Aura. Maybe he's not going to buy it, but he might mention to someone else that he was surprised that Saturn actually had a great looking car.