When should a redesigned car get a new name? Whenever the old one wasn’t a success? Or virtually never? Can car companies count on the excellence of a new car to reverse whatever damage was done to the public perception of the model name in the past?
GM, as Paul Niedermeyer noted a few years ago, has a tendency to give a redesigned car a new name when the old one fared poorly in public perception. Which has been every time with its compact cars: Corvair, Vega, Monza, Cavalier, Cobalt, Cruze. Most recently, GM opted to abandon the Aveo name in North America in favor of “Sonic.”
Ford started to replace the names of many of its cars a few years ago. Not because the cars hadn’t sold well, but because someone had the brilliant idea that all Ford car names should start with the letter F. The Windstar became the Freestar, partly in an attempt to escape the minivan’s bad reputation. And there was also a Freestyle crossover. My wife wondered if they might replace “Thunderbird” with “Freebird.” After all, there was already a song to serve as the car’s theme. Then new CEO Alan Mulally, an outsider with virtually no knowledge of the auto industry, decreed that the “F” fixation was stupid. (Though for some reason he let the even more confusing MK_ mess continue at Lincoln.) Despite the damage Ford had done to the old names, they retained broad recognition by car buyers and thus equity. The Taurus name, after being reduced to fleet queen status, was returned to Ford’s current large sedan, from which it progressed to the current semi-premium car. And Ford’s redesigned compact remains a Focus despite a huge upgrade in both its specification and price.
I’ve always possessed a visceral dislike for GM’s willingness to flit from nameplate to nameplate. But this is because (apparently unlike GM) I refuse to admit defeat and give up. I also don’t like to throw anything away (luckily I have a wife to counterbalance the latter). But these reasons aren’t rational. Perhaps giving up on a nameplate when a model has failed in public perception and starting over with a new one is the smart thing to do?
Thanks to Ford, we have an answer. Until recently, Dearborn didn’t think it could sell a Euro-spec car at profitable prices in the U.S. So while Europe received better and better C-segment cars, the North American Focus soldiered on with minimal updates, and with even these focused on taking cost out of the car more often than they improved it. Then Mulally decreed that Ford would make and sell the same cars in Europe and North America. So the next Focus (a 2012 model which arrived earlier this year) would have to command much higher prices from American car buyers. A challenge in itself, retaining the Focus name for the new car should have made this even more difficult. Americans had learned to think of the Focus as a cheap car for people who couldn’t afford a better one, right? Would those seeking a premium small car even consider one with this tarnished nameplate attached?
As much as I don’t believe it replacing nameplates, I don’t think I’d have made this bet. But Ford did, and they’ve won. The Focus’s average transaction price year-to-date in 2010 was $15,424. This year, despite a few months with the old model, it’s $20,684. Despite this massive jump in the car’s price, in percentage the largest I’m aware of, the cars have been in short supply. They’ve been attracting an entirely different group of buyers, people who could afford a larger car or any direct competitor, but who are choosing the Focus because they like it the best, not because of “the deal.” Six percent of those sold are even the Titanium trim, which can list for over $27,000.
Conversely, look at GM’s experience. Many of the new cars gifted with new nameplates were mediocre, so it’s not clear how blame for lackluster sales should be apportioned. The Cobalt and G6 were significantly better than the Cavalier and Grand Am, but perhaps not good enough to sell without heavy incentives even if the old names with their broader public awareness had been retained. But what about the G8? Might it have sold better, and perhaps saved Pontiac in the process, if it had been labeled a Bonneville or Grand Prix? One possible exception: the Cadillac CTS, though it likely would have done just as well if the Catera nameplate had been retained. Then there’s the height of stupidity: scrapping a strong nameplate. Acura replaced “Integra” and “Legend” with “RSX” and “RL.” Today the former is gone and the latter might as well be.
Judging from the success of the 2012 Ford Focus, when the car is good people quickly forget any negative associations attached to a nameplate by the previous generation. On the other hand, GM has rarely if ever benefited from scrapping old nameplates in favor of new ones. The upcoming Chevrolet Sonic might well succeed—initial media reports have been positive—but this will be despite rather than because of its new name.