Business Week: Which Auto Brands Should Go?

[wildcat]

Jim Henry has written an article, "Which Auto Brands Should Go?," for Business Week. He admits that it's hard to choose. To read the piece, click here.

I'm happy that he says, referring to Buick-Pontiac-GMC (B-P-G), that Buick is in the strongest position globally.

[Hudson]

Jim Henry should know better than to write such a myopic article. Volvo's 4%(!!) sales slide in the past half decade IN THE US is worthy of being killed? Mercury has deserved to die for many, many years and could easily be merged into the newly diluted Lincoln without sacrificing many buyers. Maybach, Saab, and Jaguar have always been niche players and could easily remain so if not for the parent companies who demand higher volumes. Even in today's hypercompetitive market, there's still a place for niche players.

Think about it: in a world of $100 million movies, there's still a place for a good indie flick. Same goes for a market flooded with corporate music, there's still room for an excellent underground band or singer. Why should it be different for the automotive world? Why can't niche players like Hummer or Saab or Jaguar or Maybach survive in a world with mass-produced me-too vehicles? There's always going to be someone who wants to something a little different (me included) without having each of his/her neighbors driving the same vehicle with a different exterior color.

[regfootball]

there's really no need to kill any brands. we sell 15-17 mill vehicles a year here. we need to have more variety....pujoe, citroen, alfa.....less asian brands IMHO.

basically if toyota was whacked down to a size it deserves, there would be plenty to go around.

[Lamar]

Think about it: in a world of $100 million movies, there's still a place for a good indie flick. Same goes for a market flooded with corporate music, there's still room for an excellent underground band or singer. Why should it be different for the automotive world? Why can't niche players like Hummer or Saab or Jaguar or Maybach survive in a world with mass-produced me-too vehicles? There's always going to be someone who wants to something a little different (me included) without having each of his/her neighbors driving the same vehicle with a different exterior color.

Very well said. I agree completely.

[2QuickZ's]

Meanwhile, to shore up its weaker brands GM is reshuffling its U.S. brands into four retail channels, combining Buick-Pontiac-GMC and Cadillac-Hummer-Saab, while its strongest brands, Chevrolet and Saturn, stand alone.

I love Saturn and all but if it is really considered one of GM's strongest brands, then GM is in a lot of trouble. Saturn just doesn't have the name recognition to be considered a "strong' brand.

[The O.C.]

I love Saturn and all but if it is really considered one of GM's strongest brands, then GM is in a lot of trouble. Saturn just doesn't have the name recognition to be considered a "strong' brand.

It's funny.....how strong can Saturn be when.....

.....Chevy gets a better-looking Lambda (Traverse).......Malibu upstages the AURA in exterior design and interior style.........and you can get a Chevy Cobalt (Turbo) SS with 260hp for the price of a loaded 138hp Astra.......?

[FUTURE_OF_GM]

Here we f*ckin' go again...

And no surprise that it's Business Week that's starting sh*t again.

[FUTURE_OF_GM]

Should Ford Motor (F) dump Mercury and Volvo? Jerry York, the longtime adviser to billionaire investor Kirk Kerkorian's Tracinda, which recently acquired 5.6% of Ford, seems to think so. According to Automotive News, on May 1 he said out loud what a lot of people have been quietly thinking, namely that Ford should sell its two struggling brands, Mercury and Volvo.

Same story, different day... We heard this same song and dance when Kerkorian tried to downsize and destroy GM.

Mercury and Volvo are so vulnerable because sales for both brands continue to struggle. Over the past five years the two brands have seen sales decline 36% and 4%

We're SERIOUSLY talking about selling a brand over a 4% decline... C'mon guys... You can find better ways than this to put Ford out of business.

"You can look at it and say [Mercury]is not cost-justifiable, but it's an unknown where those Mercury buyers would go. Some of them could go to Lincoln, but there's no guarantee they will stay within the Ford Motor family. You could be kissing goodbye a couple hundred thousand sales, and they just can't afford to do that right now," he says.

I've only been screaming this for 4 years now.

Mercury spokesman Mark Schirmer says research shows some Mercury customers wouldn't consider the Ford brand. He says about 40% of buyers for the Mercury Milan and Mariner models are new to the Ford family, up to around 60% for the Mariner hybrid model.

And therein lies the potential and/or EQUITY that I have been talking about A-L-L A-L-O-N-G!

Meanwhile, to shore up its weaker brands GM is reshuffling its U.S. brands into four retail channels, combining Buick-Pontiac-GMC and Cadillac-Hummer-Saab, while its strongest brands, Chevrolet and Saturn, stand alone.

LOL.... Saturn is FAR and AWAY from one of GM's strongest brands. However, the way Saturn is set up has GM over a barrel and GM knows it. Therefore Saturn is it's own channel.

In short, he said Ford will fix Volvo Cars instead of selling it. Reading between the lines, many analysts mentally added, "…for now."

Yes, exactly... Ford will fix Volvo until they are forced to downsize again (in an attempt to ultimately kill the company) by the street and the media. Ford is becoming really good at being USED for their resources to restore ailing import brands and then sell them. Europe can thank our media for wrapping enough of a stigma around the domestics that our consumers will allow them to drain resources and begin anew, yet will not buy them because they are "owned by [insert rustbelt company here]

Just look at Aston, LR and Jag... They're in better shape now than they've ever been, and now they will prosper under new owners while Ford dies.

In the meantime, the automakers have to accelerate cost-sharing schemes—such as GM's platform-sharing crossovers, the Buick Enclave, GMC Acadia, and Saturn Outlook—without sacrificing brand differentiation. That's an old idea, albeit one with a renewed sense of urgency

One that was shunned until Japan Inc. adopted it. And now, eventhough Japan Inc. does it, apparently the domestics are still "badge engineered" despite sharing any sheet metal.

[Sixty8panther]

Get rid of Saab & Hummer.

Which should STAY: CCBPGOVH... with recent product even Saturn is relevant.

[A Horse With No Name]

I'd second the Saab and Hummer thing, HUmmer will be a drag on cash if oil prices stay high.

Chris

[Oracle of Delphi]

Get rid of Saab & Hummer.

Which should STAY: CCBPGOVH... with recent product even Saturn is relevant.

CPF will never let Saab die.

Also my understanding is Saturn will be/is being moved into BPG, just in case a brand should die. :AH-HA_wink:

The Saturn dealerships will stand alone for now, but internally they will report, for a lack of a better word, to the same brand manager as BPG.

Edited May 6, 2008 by Pontiac Custom-S

[ocnblu]

Saturn is but a single sheet of soiled toilet paper blowing in the wind compared to the history and potential of Pontiac. The Saturn brand has drained billions from GM's coffers with no appreciable results... Saturn is a failure and will remain so.

[Sixty8panther]

Saturn is but a single sheet of soiled toilet paper blowing in the wind compared to the history and potential of Pontiac. The Saturn brand has drained billions from GM's coffers with no appreciable results... Saturn is a failure and will remain so.

I'm 100% with you They hehmorage money with no end in sight,

but I will say for the first time since their lanuch almost two

decades ago their lineup is relevant. Although it could just as

easily be absorbed into BPG & renamed after another GM division

of days past with ties to a rocket.

(supposedly Saturn was named after the Saturn rocket not the planet?...)

[ocnblu]

Saturn is not a pimple to squeeze on the asscheek of Pontiac. What kind of dip$h! move is it to even entertain the notion of getting rid of Pontiac and putting the bland brand with no image and no history and no reason to exist in its place at BPG? This is blatant, bald-faced corporate assassination coming from within GM's halls and needs to be stopped!

[Camino LS6]

Creating Saturn will always remain the biggest blunder ever made at GM.

And it is still costing the company in so many ways.

As for Hummer, a production version of the HX could change the picture there entirely.

Saab has no value in this country that I can see - leave it in Europe.

[Hudson]

.....Chevy gets a better-looking Lambda (Traverse).......Malibu upstages the AURA in exterior design and interior style.........and you can get a Chevy Cobalt (Turbo) SS with 260hp for the price of a loaded 138hp Astra.......?

Yes, it is funny how one person can see things one way and another see things differently. The Chevrolet Traverse was the most basic looking crossover I've ever seen. And the Aura, to me, is far better looking than the Malibu...in side and out. I can't defend a European import's pricing over a basic American-built compact, especially with the value of a dollar today.

[FUTURE_OF_GM]

Phasing out Pontiac in favor of Saturn is probably the dumbest thing I've heard since "Achey Breaky Heart"

I hope GM and GME fail miserably if they are this short sighted.

[Sixty8panther]

It just has to be a joke.

I mean Pontiac is by FAR the coolest of the satellite divisions that still exist.

Plymouth is gone, saddly... Oldsmobile is gone, but not forgoten, Mercury

is so irrelevant at this point I wonder how the hell Ford can even justify

throwing on waterfall grilles & Mercury emblems on what are otherwise 100

percent, blatant, exact clones of Fords/Lincolns.

Sad day for sure this is, but Pontiac is actually on the right path... more so

than Mercury or Buick or even Lincoln they HAVE a niche and are working

to keep it, if they played their cards right a RWD/RB-AWD lineup would

make them more relevant than.... possibly ever.

Let's remember Pontiac was in dire straights in the 1950s and 1960s, the

GTO was born to bring life to a stale lineup.

(if only the 2008 lineup was as cool as the "boring" 1963 MY)

And lets also not forget that Pontiac was at one point the THIRD best selling

car in the USA (and world) behind only Chevy & Ford.

[2QuickZ's]

Creating Saturn will always remain the biggest blunder ever made at GM.

And it is still costing the company in so many ways.

As for Hummer, a production version of the HX could change the picture there entirely.

Saab has no value in this country that I can see - leave it in Europe.

I disagree with a couple of your points.

First of all, I don't think the creation of the Saturn brand is the big blunder. It was that fact that they spent all that money to launch it with one product and then let that product rot on the vine for 10+ years with nothing new added to the fold. Then, when they did finally add other vehicles (see Vue, L series), they made only a half-assed attempt at adding something decent. It should have launched with a compact and a mid-size and both should have had an MCE within 3 years and a full redo within 6 to keep them relevant.

Secondly, I agree Saab doesn't currently have much value in the U.S. but I think it could. One of two things would need to happen. One would be to lower the price of the product to match the quality of the materials. A fully loaded 9-3 is not worth $38k based on the sum of the parts. The same is true of the ridiculously over priced 9-3 convertible. And a 9-5 for $40k? Both are good cars that get very good real world fuel economy but will never sell in any volume at those price points unless they are significantly upgraded. The price range for a 9-3 should start at $25k and end at $32k on the current model. A 9-5 should probably start at $30k and run it to $36k or so loaded. If that plus some increased marketing doesn't help, shut it down in the U.S. and leave it to the Euros.

JMHO

[IfICouldWouldYou?]

In retrospect, GM should have spent the money on Oldsmobile and turned it into the import fighting division in the late '80s. You can only imagine the damage that could have been done if the Intrigue and Alero had come out 2 or 3 years earlier. I guess once the money was committed on Saturn, how could they not follow through?

[mustang84]

I'm 100% with you They hehmorage money with no end in sight,

but I will say for the first time since their lanuch almost two

decades ago their lineup is relevant. Although it could just as

easily be absorbed into BPG & renamed after another GM division

of days past with ties to a rocket.

(supposedly Saturn was named after the Saturn rocket not the planet?...)

GM might as well get rid of the Saturn name and bring back the Oldsmobile name for Saturn vehicles. It makes just about as much sense as killing Pontiac and propping up a brand that has been a sales failure. Saturn has basically become Oldsmobile and Oldsmobile is one of the brand names that studies show people actually miss. I say it makes perfect sense.

[SuperSport623]

i dont understand all this "bring oldsmobile back" stuff... how are you gonna totally resurrect a brand name and just swap it with an existing brand.....

lets bring back plymouth!

and edsel!

hell, there where people who liked oakland, lets bring it back to!

throw in studebaker and we're set!

[Camino LS6]

The insane expenditures on creating Saturn are a huge part of why GM is in such trouble, and why Olds ended up dead.

Saturn was a stupid idea as well as a black hole GM threw money into at the expense of every other brand.

Saturn should never have existed in the first place.

[SuperSport623]

besides the sky, nothing at saturn has really caught my attention, and created an I NEED that car attitude... alot of people look at saturn and think "well its cheap enough..."

[mustang84]

i dont understand all this "bring oldsmobile back" stuff... how are you gonna totally resurrect a brand name and just swap it with an existing brand.....

lets bring back plymouth!

and edsel!

hell, there where people who liked oakland, lets bring it back to!

throw in studebaker and we're set!

I meant it as a tongue-in-cheek comment to compliment the stupidity of killing Pontiac. Throwing money into Saturn has accomplished nothing and not really made any sense, so why not keep th stupidity flowing and resurrect Oldsmobile only 4 years after its demise?

[Robert Hall]

The insane expenditures on creating Saturn are a huge part of why GM is in such trouble, and why Olds ended up dead.

Saturn was a stupid idea as well as a black hole GM threw money into at the expense of every other brand.

Saturn should never have existed in the first place.

One thing Saturn did do, though, at least in the '90s, was attract customers that would never have considered GM in the first place...I've read they did manage to get a fair number of potential Honda or Toyota customers that would never consider Chevy (considering the dreck Chevy had for FWD models back then, that would be understandable).

[MyerShift]

(supposedly Saturn was named after the Saturn rocket not the planet?...)

I read that too! And I have to say, then what the heck is that emblem supposed to be then? A silver X in a red box?

Buick and Pontiac deserve to stay. So did Olds, but that's beating a dead horse.

They should just call Saturn Opel and get it over with.

[CARBIZ]

Does anyone here know the parentage of Saturn? Is it possible that some senior VPs today, in the RenCen, were responsible for bringing Saturn to market in the '80s and they are too proud or too blinded to admit it was a mistake? I have been wondering about that for a while. Oldsmobile had a lot of brand energy in the late '80s (Cutlass anyone?) and at that time it could have been targetted to go after the import market, but instead GM launched Saturn. It is easy now to see that as Saturn 'rose,' Oldsmobile was starved. It would be fun to trace the ancestry of Saturn from its inception until the demise of Oldsmobile to see which executives were shuffled around and whose responsiblity was what.

[Hudson]

And lets also not forget that Pontiac was at one point the THIRD best selling car in the USA (and world) behind only Chevy & Ford.

As was Plymouth.

[The O.C.]

The insane expenditures on creating Saturn are a huge part of why GM is in such trouble, and why Olds ended up dead.

Saturn was a stupid idea as well as a black hole GM threw money into at the expense of every other brand.

Saturn should never have existed in the first place.

It's funny.

The whole reason Saturn was created.....was to attract import consumers back to the GM family.

Therefore, back in the 80's, as Saturn was being created and developed, General Motors OBVIOUSLY KNEW what was happening in the marketplace. That people were gravitating more-and-more toward import-type cars.

So, it's ironic that they spent ALL that money on developing Saturn......and kept pouring money into pickups and the fast-growing SUV side of the business.......instead of saving all that Saturn money and putting it towards making their OWN cars import-competitive.......like.....they are now trying to do!

[The O.C.]

One thing Saturn did do, though, at least in the '90s, was attract customers that would never have considered GM in the first place...I've read they did manage to get a fair number of potential Honda or Toyota customers that would never consider Chevy (considering the dreck Chevy had for FWD models back then, that would be understandable).

See my post above. I'm one of the few, I think, that thought the original SL cars were TERRIFIC. Sure they had a few faults, but overall, they were smart-styled, well-driving (engine noise aside) little cars that had a true import feel to them in the driving and the interior. It was the lack of follow-up that really hurt them.

The original SL cars would have made WONDERFUL little Chevrolets......??????

And ironic that today, the brand that was supposed to appeal to import consumers with such a "different" type of domestic car......has a lineup now shared exclusively with mainstream GM products! (Albeit the best mainstream GM products we've ever seen.)

[The O.C.]

Does anyone here know the parentage of Saturn? Is it possible that some senior VPs today, in the RenCen, were responsible for bringing Saturn to market in the '80s and they are too proud or too blinded to admit it was a mistake? I have been wondering about that for a while. Oldsmobile had a lot of brand energy in the late '80s (Cutlass anyone?) and at that time it could have been targetted to go after the import market, but instead GM launched Saturn. It is easy now to see that as Saturn 'rose,' Oldsmobile was starved. It would be fun to trace the ancestry of Saturn from its inception until the demise of Oldsmobile to see which executives were shuffled around and whose responsiblity was what.

Saturn was the wrong thing.....done for exactly for the right reason.

It truly was a cultural shift from the "same-ole, same-ole" at GM. I knew lots of people that went to Saturn to work when it was formed....the culture was an incredible, and cherished change from what the rest of us dealt with.

It was a different philsophy in assembly plants.....it was a different philosophy on how to sell cars......it was a cult! (Remember the Saturn Reunion that took place in Spring Hill with ALL those owners driving their Saturns to the plant?)

There were two big crimes in this soap opera.

1) The biggest crime was that GM didn't see that all the cultural changes they instilled in the new Saturn Corporation and it's products......were the cultural changes that needed to happen to the entire damn General Motors Corporation!

2) The second biggest crime was.....okay....since they went and invested the money.....and we have Saturn with us today......way back then they needed to keep their focus on the brand and on the product and build upon what they started. But they didn't do that. As we all know, they let it flounder. The day they folded Saturn back into the General Motors portfolio (it was a separate corporation, wholly owned by GM.....very different than the GM "divisions" of that day) is the day the culture-shift named "Saturn", died, effectively.

[ponchoman49]

Which auto brands that should go:

1) Toyota

2) Mistubishi

3) Isuzu passenger vehicles

4) Mercury

5) Hummer

In this exact order

[The O.C.]

Which auto brands that should go:

1) Toyota

2) Mistubishi

3) Isuzu passenger vehicles

4) Mercury

5) Hummer

In this exact order

Mistubishi (maybe)

Isuzu (definitely)

Mercury (unfortunately)

Toyota? Get real.....la-la land with that thought.

Hummer will remain a niche brand.

[ponchoman49]

Mistubishi (maybe)

Isuzu (definitely)

Mercury (unfortunately)

Toyota? Get real.....la-la land with that thought.

Hummer will remain a niche brand.

Can't blame me for dreaming. If only!

[The O.C.]

Can't blame me for dreaming. If only!

[gm4life]

GM could/should nix Saturn and bring back Olds, but could it happen? Nothing would make me happier. Then give Pontiac a new G6 and G5 maybe even an SUV. Give Olds back a Lexus ES fighter, and a sports-coupe, an Alero redo (always a great car) and bring me back an Aurora or 98 for god sakes RWD and all.