As GM’s journey to bankruptcy nears its conclusion, the punditocracy is busy contemplating the company’s afterlife. The current line of thinking: the feds will cleave General Motors in two. Bad GM gets Buick, GMC, HUMMER, Pontiac, Saab and Saturn. Good GM “buys” Chevrolet and Cadillac. It emerges from Chapter 11 unencumbered by outdated production facilities, warring management, befuddled marketing, over-priced labor, restrictive union work rules, astronomical pensions and onerous health care obligations. Chevillac rises from the ashes to steal share from both mainstream and luxury brands, repay its debts and thumb its nose at Bailout Nation’s critics. But here’s the thing: good GM is “saving” the wrong brands.
“What’s a Chevrolet?” branding guru Al Reis asks, rhetorically. “It’s a small or large cheap or expensive car, truck, SUV or sports car.” Reis has been sounding the alarm on Chevy’s branding for over twenty years, claiming the company lacks the focus it needs to survive in a market place with over 40 competitors.
So how could the liberated Chevrolet rebrand itself for success? “Get rid of the trucks,” Big Al suggests. “Take Chevy back to its roots. Make it what it was before Saturn arrived: an entry level car brand.”
Yes, well, what would distinguish this new Chevy from its competitors? Toyota owns reliability. Hyundai owns price. Nissan owns value. BMW owns driving pleasure. So. . . what? “It should be an American brand,” Reis says. Even if the cars are made somewhere else like, say, South Korea? “These days consumers don’t care where their products come from. Ralph Lauren’s clothing is made in China.”
When I push Reis for a unique selling point for Chevy, he hesitates. I can almost hear him shaking his head. “It’s too late to narrow its focus,” he says. “Other than appealing to patriotism, there isn’t anything left.”
I suppose Chevy could play the patriotic card, returning to the brand’s former “baseball, hotdogs and Chevrolet” appeal. It could even play off its taxpayer subsidy to assert itself as “America’s car company” (yes way). Chevrolet could offer comfortable, affordable and reliable American-styled sedans. Sort of like the groundbreaking Chrysler 300, only better.
Fine, but I doubt the US market would value four-wheeled flag waving enough to make Chevrolet profitable. Remember: Ralph Lauren’s WASPy brand ID convinces customers to pay a premium for his Chinese made apparel. If Chevy can’t charge a premium for these “all-American” products, it will have to compete on price with some of the world’s most efficient automakers. Why would the end result be any different than it is today?
Cadillac sits on the opposite end of the scale. As Lexus, Mercedes and Audi have proven, you don’t have to restrict yourself to one automotive genre to be a successful luxury automaker. But, like Chevy, like any car company, it’s all about the brand. The CTS may be as good as an equivalent BMW, but in this rarefied air, perception trumps product.
“If someone goes down to their golf club and says ‘I just bought a Cadillac,’” Reis says, “it doesn’t mean anything. It doesn’t mean you’ve made it.”
Restoring the Cadillac brand to the pinnacle of automotive desirability would require a multi-billion dollar investment in new products and an equally expensive marketing effort. At the same time, Cadillac would have to abandon its current willingness to maintain volumes with badge-engineered bling. Does Cadillac have the time/will/money to ditch/evolve their current lineup and make and promote the kind of world class cars that could reinvigorate the brand?
No.
Meanwhile, GM is throwing the baby out with the bath water. Buick, meh. But GMC is a strong brand that would gain strength the moment Chevy transfers all its SUVs and pickup trucks to the professional graders. Assuming the US economy recovers sometime before the next century, the pickup market will return. And after driving the Chevy Tahoe hybrid, I’m convinced there’s more room for the genre’s fuel efficiency, packaging, durability, safety, style, convenience, etc.
HUMMER may be the antithesis of President Obama’s vision of the American automobile’s future, but it’s an instantly recognizable brand. HUMMER’s underlying concept—SUV as survivalist’s enclave—still has resonance. Saturn has the touchy feely thing happening. It could be the home of green vehicles. American sports cars? Give Pontiac the Corvette, Solstice, Camaro and a performance brand is born. Saab could return to its roots an, uh, do whatever it is Saab used to do.
Alternatively, nothing. While resurrecting two or more of GM’s eight brands is doable, so is going to the moon. Judging from recent polls, Americans are more willing to fund lunar colonies than pour endless billions into GM.
That’s because they know that Uncle Sam isn’t “protecting ” or “investing” taxpayer’s money by subsidizing GM. They’re gambling on a loser. “GM has destroyed the equity of eight car brands,” Reis says. “You could almost say that’s what they do best.”
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Correction RF. If you go down to your golf club and announce you’ve just bought a Cadillac, it means either A: You are clueless, or B: You are old enough to have voted for Eisenhower.
I agree that plans to dump GMC would be a mistake. Get the Trucks & Vans (and the truck derived SUVs) all together in GMC as a stand alone “Truck Division”. That leaves Cadillac for luxury and Chevrolet for cars for the masses.
In my opinion, all the brands except Chevy (bargain American style vehicles – not necessarily cars only) and Cadillac (nice American style vehicles) should be killed off for the sole reason that if the other brands exist, badge engineering will continue.
If they were to reorganize and produce 1 or 2 vehicles per brand as you mentioned – THE Hummer, THE Saturn, THE SAAB, so on, even if they were off a limited number of platforms (small car, large car, truck – done) the brands may retain enough identity to be valuable/viable.
As it is with all the brands being full line brands there is no significant differentiation between the Malibu/G6/Aura/Lacrosse.
If all the brands survive I don’t think they’ll have enough reason to change their existing business model, and continue to fail.
If Chevrolet got rid of its trucks, Chevrolet deaelers would have a lot of trimming to do. Trucks are over half of their sales, which are already down by half.
Anyway, getting rid of trucks would not in itself provide enough focus. If you want focused brands, you need more of them. Getting rid of Pontiac means Chevrolet has to carry the performance ball, which means less focus for the brand. Ditto getting rid of Buick, and having Chevrolet cover the near-lux market.
Truly superfluous at this point: Saturn. When a Toyota owner is more willing to buy a Malibu than an AURA, Saturn’s done.
If the task force thinks that the way to save GM is to reduce it to Chevrolet and Cadillac, then they’re looking for simple solutions, not correct solutions.
I agree with mach1’s short and sweet synopsis on this one. I think the larger issue of “will good GM survive” is based on the simple idea that you only need to make $1 more than you spend in order to be profitable. Any shot at success for the new GM will be based on the premise that they must have a cost basis that mirrors their much smaller size, revenue stream, footprint, etc.
Perhaps the biggest problem GM faces today is the fact that their cars don’t sell for nearly enough money. They don’t even come close to covering the bills, even if they had no health care and legacy costs. This is a problem that will only grow more once they file for bankruptcy.
For the last few years, at least, GM’s are purchased when they offer huge sales. Remember how successful their original employee pricing offer a few years ago was? While it moved inventory at the time, it cemented the feeling in most Americans minds that you only buy GM, and by default Chrysler and Ford, when they have a huge sale. GM has only been so eager to oblige by having one every few months.
They will need stop this thinking if they are ever to make enough money from each sale to make a profit. While in bankruptcy, GM is going to want to sell cars, no matter what they get so they can move inventory because they need some sort of revenue to survive. This would only continue the thinking in Americans’ minds that GM is purchased only during sales. And the cycle goes on and on and the problem gets worse and worse …
It will take several years, if at all, for GM to change the minds of American consumers mind regarding the value of their products. It’s time that GM doesn’t have and will cost them money they need in the present.
Chevrolet is a full line brand and covers more of a full line than Toyota. What is Toyota’s sports car again, the “nothing”? Sweet ride. Chevrolet needs to get the rest of line up to the standards set by Malibu, Corvette,Silverado, Tahoe, Suburban, and now Camaro. Fix Aveo, Cobalt, and Impala and you are in business.
The most GM needs is Chevy and Caddy. That’s it. You can have brands within those two brands a la Scion. Those might be Saturn (green) and Pontiac (performance) inside Chevy, but why bother??? The basic problem with GM is that they don’t have enough competitive cars to fill Chevy and Caddy. Why keep Pontiac as a sub brand when it only has one car, the G8, that is worth keeping? What does Saturn have beyond something like the Soltice??? And GMC, why keep it? Other brands just offer trucks as part of their main lines, not as a separate brand. What makes GMC so special that it should stand on its own. If you made a list of the competitive cars that GM has, you would readily see that even two brands, Chevy and Caddy, could arguably be seen as too many. The only real reason to keep Pontiac, et al, as sub-brands is to try to migrate those customers to your main brands.
Toyota seems to be able to do pickups and sedans under the same roof just fine. Why can’t Chevy?
Why is Chevrolet too broad for this guy? What about Toyota, where you can buy a “large or small cheap or expensive car, truck, SUV or sports car”? Chevrolet is the American equivalent to Toyota. Sort of.
At the other end, Cadillac is GM’s luxury brand. It’s the only brand they have that has the chance to compete in the upper end of the market. Buick and Saab won’t cut it, at least not in North America, as true luxury brands. Saab would work in some areas, but their (lack of) quality has hurt them, and they’re really kind of niche-y, if you will. So Cadillac it is.
Why GMC? Toyota doesn’t have a seperate truck brand. Hell, the best selling truck in the world, the F-Series, isn’t sold as a different brand, it’s a sold as a Ford. GMC is entirely redundant, with only the Denali line to add any kind of unique touch over Chevy, and the Escalade pretty much overlaps those vehicles.
Saturn would have been a good brand to keep if GM hadn’t killed off what was left of their brand equity, but at this point they’re not looked at as “Different”, they’re looked at as cheap. And a “no dicker sticker” doesn’t really work for most people.
Buick? Ha! Maybe in China. Pontiac? Ruined. Excitement my ass.
Hummer’s done. Their sales are in the toilet, and their brand just seems to stand for the good ol’ American excess and waste that helped drive the economy into the ditch. Nobody needs a huge macho-styled gas guzzler that barely seats five. I think people are starting to be a little more conscious about image, and a Hummer isn’t the image many people want to portray any longer. Shutter the brand.
Good GM “buys” Chevrolet and Cadillac. It emerges from Chapter 11 unencumbered by outdated production facilities, warring management, befuddled marketing, over-priced labor, restrictive union work rules, astronomical pensions and onerous health care obligations. Chevillac rises from the ashes to steal share from both mainstream and luxury brands, repay its debts and thumb its nose at Bailout Nation’s critics.
The problem with this analysis is that the whole purpose of the Bail Out isn’t to get rid over-priced labor, restrictive union work rules, astronomical pensions and onerous health care obligations. It’s purpose is to perpetuate those things on the back of the taxpayer.
If the task force thinks that the way to save GM is to reduce it to Chevrolet and Cadillac, then they’re looking for simple solutions, not correct solutions.
And oversimplifying a REALLY complex problem, I’d add.
Sometimes, going to the moon should be chosen, even if it’s the hardest/longest road.
Edit: I forgot… all that “green-ess” going against what the market really wants and needs, just because is politically correct (essentially bullshit), is not only lame, but will also lead to an EPIC FAIL.
yankinwaoz
Toyota has an overarching brand promise: reliability. Chevy does not.
Chevrolet’s core competency is the ability to sell lots of cars. Chevrolet dealers move lots of metal and always have, even when the cars they were selling were crap. Now most of the Chevrolet line-up is pretty good.
As far as brand identity goes, the message they’ve been trying to convey is honest value and lack of pretense. With a fresh start in bankruptcy they can focus on delivering what they promise.
Ford has made amazing strides in delivering the type of honest value that Chevy trades upon. If Ford can do it, then Chevy can too. General Motors is as good as anyone at direct-injection engines. Their electronics are well-integrated. They’ve improved their interiors. Across the board, their cars are at least as good looking as Toyota’s. Chevy has core value, you just have to get rid of the crap to bring the value out.
RF and I continue to disagree about the brand thing. The Chevrolet brand should mean no more and no less than the Toyota brand – a full range of well built cars and trucks offering value and covering all but the top end of the market. Only difference is that for the last 35 years, Toyota has done it well and GM has been turning out mostly crap.
Chevy has a deep reservoir of loyalty among truck owners. I see Calvin peeing on a lot of Fords. With cars and trucks that are both appealing (style, features, price) and built with genuine quality (both initial and long-term) Chevy can stay with Baseball HotDogs Apple Pie and Chevrolet, because it is an American Institution. Just like Ford. The loyalty of Chevy fans is incredible. Toyota buyers are loyal because of the vehicles. Chevy buyers are loyal in spite of them. This is very valuable and can be built upon.
The problem is, can they build the products? I’m betting no. It’s not the brand, its the cars. Ditto Cadillac. I shake my head at how the 3 then 2 US luxury brands were so busy fighting each other for volume that they completely abandoned the top end of the market. On Cadillac, I completely share RF’s concern.
But I believe that that the damaged brands are a leadership and product problem, not a brand problem.
a message to this line of thinking from the Mid east, that’s of the globe, not the USA.
GMC here has more market value than GM in its entirety. in fact people call GM GMC (gims) because it stands for general motors company. Chevrolet, which is nicknamed SHAFAR or Baldes in a direct translation.
so these two brands are sure to stay, because it’s not just about the US, right? and that has been confirmed in the latest press release from their regional office. Buick sadly for me will also survive with the good GM. and Pontiac will peekaboo with a niche model every now and then…
so Chevy in the end might loose the trucks and the Lumina for GMC and Cadillac respectively and perhaps the SS to Pontiac and perhaps the Corvette will stand alone.. and Buick might still be the marshmallow suspended Chevrolet. Badge engineering will never die. it is instilled in GM’s Psyche.
so what’s left hummer, they are supposed to announce the buyer, or undertaker soon. lets wait and see…
so in fact the new GM is the same’ol GM, without even a twist… just more debt…
I think the awful truth goes further: Not only are there too many brands in the market place (besides GMs); there’s too many car manufacturers period.
I think the GM brands are all ‘damaged goods’. Repeated headlines have pretty much forced american consumers to face reality that GM will have to go chapter 11. Maybe a new reborn GM can survive but without government support I doubt it. While the stated goal is to make the new GM more competitive, I have hard time believing that the Obama admin will force competitive wages/benefits/pensions on the UAW. Politics will keep them from making the really hard decisions. Since when has a democrat administration forced their union supporters to face reality. Yesterday Obama’s boys met with the michigan delegation to assure them that they will get the admin’s support. I hope I am wrong but this sounds like some kind of ‘fix’ to me. Look for the gravy train for the UAW to continue for the foreseeable future.
Mach1: “I agree that plans to dump GMC would be a mistake. Get the Trucks & Vans (and the truck derived SUVs) all together in GMC as a stand alone “Truck Division”.”
The problem has become that all of GM has become the “Truck Division.” Good luck getting the turf-hoarding middle layers of any GM division to surrender “their” trucks. Despite the current economic conditions “trucks” have been the most, if not ONLY profitable products from GM since the 80s.
GM seems to be trapped. They are staring at a full set of gangrenous limbs, paralyzed in fear if the pain involved in lopping them off. Meanwhile the rot is consuming the whole body so fast that it may already be too late to save any of it.
People have been telling GM to mend their ways for 40+ years. Had they taken the advice 40 years ago it would have been clipping a toenail. Had they taken the advice 30 years ago it would have been like losing a foot. 20 years ago, perhaps a leg. Within the past 10 years though the gangrene has spread so fast that you might as well just perform euthanasia because the cure is now far worse than the disease.
–chuck
I’m sorry, what kind of car “guru” would suggest that Chevrolet abandon its top selling product, the Silverado, as the company is going bankrupt, no less?
By the same logic:
*Coca-cola is going broke. Dump Coke!
*McDonald’s is going broke. Dump the Big Mac!
Frankly, that suggestion is suicidal and makes me wonder what kind of guru this guy is.
Next, there’s the usual whine about Chevy trying to be many things to many people…but every one of its competitors has a similar strategy, with the exception of Honda, which doesn’t make heavy duty pickups.
And the inevitable whine about how Cadillac relies too heavily on “badge engineering”…but what about Lexus?
Cadillac badge engineered products
Escalade
XLR (which is going away)
DTS (even though you could argue it’s the original platform that Buick borrowed from for the Lucerne, not the other way around)
Cadillac non-badge engineered products
CTS
STS
SRX
Lexus badge engineered products
ES350 (a reboied Camry)
GX470 (a rebodied 4Runner)
LX570 (a rebodied Land Cruiser)
Lexus non-badge negineered products
IS
GS
LS
RX
So, Lexus has as many badge engineered products, INCLUDING ITS BEST SELLER, which is a restyle of a $20,000 car, and one that’s a rental-fleet queen to boot. Can you imagine the whining if Caddy tried rebadging a Malibu?
Where’s the criticism?
Karesh and RF’s comments point to another reason for keeping some brands at least as sub brands in the near term: sub brands like Pontiac have more identity than GM’s major brand like Chevy. Beyond being a full line American brand, Chevy has no identity. Ditto for Caddy except it is a luxury brand, which does not distinguish it at all.
If I were king for the day (CEO of GM), I would have two brands with separate dealerships: Chevy and Caddy. Trucks would be sold under both brands so GMC is gone. Ditto for Saab, Buick (at least in the US) and Saturn. These brands are damaged beyond repair. Pontiac would become your performance or “M” division where you would organize around the G8, Vette and souped up versions of regular Chevy models. Hummer could be the sub brand of truly off road capable SUVs.
IOW, keep the sub brands that have an identity and trash the rest. Buick does have an identity, old fart car, but that is hardly worth keeping. Does any think either Saab or Saturn have an identity at this point in time??? And now is not the time to rebuild identities, you either have it or you are gone!
This article’s veneration of the ‘brand’ seems to pay no attention to the real world. Chevrolet sells only vanilla cars which means the Aveo, Cobalt, Malibu and Impala. Therefore all the Chevrolet dealers get murdered because they have no trucks to sell. Pontiac and GMC are left selling gas guzzling sportscars and trucks. This would be profitable but, without Chevy’s high-mileage volume cars evening out their Cafe rating, they get hammered too. Saturn sells ‘green’ cars, like, uh, the €40k Volt. Hummer does indeed have a clear and concise brand identity, a “SUV as survivalist’s enclave,” as you put it. Unfortunately, the Hummer brand is the automotive equivalent of the plague. No one will touch a Hummer in these eco-conscious times.
If American’s paid much attention to ‘brand’ they wouldn’t get any of their money back.
I think the best course of action would be to kill everything but Chevy. That’s where most of the volume is and what most of GM’s small town dealers are. Chevy makes good, profitable trucks and, with the Malibu has shown it can make good cars. The trucks already sell. The cars will also sell because Chrysler, Dodge, Pontiac etc will no longer exist. Also because the Asian competitors don’t have a strong presence in smaller markets. If it can provide solid, reliable transportation with distinctive American styling, Chevrolet will be profitable and can pay taxpayers money back in the medium term.
In the long run, as the market adjusts, I suppose Chevy will need that focused brand Al Reis is having trouble defining. Here’s what I think:
Over time, the product will define the exact values of the Chevrolet brand. Brands are formed organically from within by engineers trying to design the best car they can in much the same way as the ‘invisible hand’ creates a market. This is what gave the world the ‘Ultimate Driving Machine,’ Honda’s high revving engines and ‘Built Ford Tough.’ Engineers used their collective expertise to make great handling cars, fizzy, powerful engines and teak tough trucks because that is what the engineers in question were good at doing. Then, 10-20 years later, marketers caught on to what the customers already knew about the product and defined the brand. In the same way, a liberated Chevy will have a chance to carve out its own mark on the automotive landscape.
PS: Retiring Cadillac now will allow Chevy to launch a proper luxury brand in a wave of nostalgia, if Chevy is in the position to do so.
GM should be Chevy, Pontiac, Caddy, and Saturn.
Here’s why:
Chevy is chevy. Only thing to do is make them less expensive, and more attractive. Delete high trim levels with stuff you can get on a caddy. GMC to meld with Chevy dealers and sell only heavy duty trucks and worktruck chassis.
Pontiac: Extremely sporty cars, mostly RWD. Could be outlet for Opels, Holdens. Buick has too much overlap with Caddy, sorry. Sell it to the Chinese.
Caddy : Make 3 sizes of the best sedans you can. One SUV- the Slade. 2 styles, Euro-sport, and American Lux. Should satisfy all potential demoes.
Saturn: Green cars only. Let it be the “shiny happy electric people” brand. People who like Chevy, Pontiac and Caddy’s don’t like shiny happy people anyway.
“Why GMC? Toyota doesn’t have a seperate truck brand.”
Hino
GMC can take the real commercial trucks and leave the personal/consumer lines to Chevy. Without Buick and Pontiac dealers, GMC wont have to be a badge-engineered clone.
The “New GM” needs to focus on four brands: Cadillac, Chevrolet, GMC and Buck. The company should return to its original business model when each division was basically autonomous, with each brand building cars for its core customer base and NO badge engineering. Cadillac gets rid of the Escalade and focuses on the DTS, CTS, STS and SRX.
Chevrolet needs to return to its original purpose building entry level cars: Malibu, Cruz, Impala, Camaro and the Corvette.
GMC gets the trucks, vans and SUVs under the “truck division”. Buick builds vehicles that span the gap between Chevrolet and Cadillac and compete with makes like Lexus, Infiniti and the likes.
“whatever, uhh… saab used to do”
you mean build intelligently designed, efficient and solid cars with turbo power and hatchbacks? You mean like, the brand with the most clearly defined purpose in GM’s portfolio?
Man am i sick of the press trashing Saab every chance they get. It’s not nearly as funny as you think it is, it just looks ignorant.
In the 50’s, GM had the car for every price and purpose thing nailed, but it 1) didn’t keep up with a changing market and 2) badge engineered so much, it made the brands a muddled mess.
GM – Hey, we need a brand to take sales from the imports, let’s launch Saturn.
Chevy – Hey, we need that too, let’s badge up some imports and call them “Geo”’s.
GM – OK, we’ll do that too and have business as usual elsewhere.
GM didn’t understand that consumers don’t segment the market into domestics and imports, that ALL cars must be competitive in ONE car market.
I don’t think a “sports” brand or a “green” brand really works. Look how much mileage Toyota has received from the Prius, despite the fact Toyota makes big trucks and SUV’s too.
I do agree with this point. GM is not at the edge of bankruptcy because of Hummer, Saab, or Saturn. The problem is systemic. Although I suppose lopping off redundant brands simplifies things a bit.
The bottom line is that until GM can build and sell enough cars at a price where they can make money off of them (it’s that simple and that difficult), they will continue to be in trouble.
branding guru Al Reis and other morons like him are the reason GM is ruined. Get rid of Chevy trucks? Are you out of your mind? The Chevy truck brand is one of the strongest brands that exist in the US. Huge Profits, people…Jesus christ. It doesn’t matter if American cars are actually Chinese or Korean? I beg to differ.
As usual, we of the B&B have lots of ideas on what GM should end up as, no two of them quite the same.
I want to say a few words about badge engineering. Although some people spit the words out as a curse, it has basically always held sway in automotive marketing in the United States. Look at the 1ineup of cars for GM in, say, 1935, a year when the old square-box bodies had largely been left behind. There was enough in common not only in looks but in actual shared parts that there was an obvious relationship between Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac. This applied to Chryser as well; Plymouth, Dodge, DeSoto, and Chrysler were obviously related. By 1939, Ford introduced the Mercury, which has always been either a fancy Ford or a slightly de-contented Lincoln.
The fact that Lexus is successful with a very similar strategy of badge engineering would seem to indicate that badge engineering is not a bad thing per se. When badge engineering doesn’t work is when the product being sold under several different names is mediocre to piss-poor.
GM is in the unique position of having two lines of trucks, each of which has considerable brand equity. Ford and Chrysler have done well enough with one truck brand, and afaik there’s no way to know whether GM could have done as well over the years with only one truck brand. Now, I suppose, that’s just another complication for Our Government to deal with.
Incidentally, “It doesn’t matter if American cars are actually Chinese or Korean? I beg to differ.” Oh, I don’t know, we seem perfectly okay with Canadian or Mexican….
fincar1,
There is a large difference between a Chrysler 300 and a Chevy Aveo. Yes, one is made in Canada with a Mexican engine on a German platform; but from conception it is still designed for the American market as a typically American car. That is already what many American cars have become.
As bad as that already may be, that is still much more acceptable than a rebadged Daewoo. And cars that are more American (Corvette, CTS), though rare, can also be some of our best representations of our brands.
On the west coast at least, Chevrolet is a truck brand. Reis is off his rocker arms proposing that Chevrolet drop trucks. Sometimes gurus are just wrong.
I agree that ditching GMC would be stupid.
GM’s stated plan to keep Chevy, Buick, GMC and Cadillac is actually starting to make sense. GMC has room to expand more into the heavy duty truck area it has been abandoning in recent decades.
Buick is going to live on in China, so why not also sell Chinese Buicks as a value priced step-up brand in the US?
Chevrolet needs to offer a one-stop shop for all major categories of cars and personal use trucks at everyday low pricing. The WalMart of personal transport.
GMC focuses on highly optioned personal use trucks and more seriously equipped trucks for tradesman and industry.
Cadillac does American style luxury vehicles.
Pontiac, Saturn, Saab and Hummer go away.
“The company should return to its original business model when each division was basically autonomous, with each brand building cars for its core customer base and NO badge engineering.”
In GM’s heyday there was in fact a great deal of platform sharing going on. The chassis & frame was routine shared between the brands as were many suspension and drive-line parts. General styling themes were also multi-division, and most of the styling was done in corporate studios. Platform sharing done right is brilliant. It only devolves into badge engineering when little or nothing is done to differentiate the brands. Aveo-G3 is a badge engineering hatchet job, Malibu-Aura is appropriate platform sharing, but with insufficient target customer differentiation (same price point). The main problem is when multiple versions of a platform end up priced right on top of one another. A Chevrolet and Cadillac can share the same bones, but they shouldn’t look alike, shouldn’t be trimmed out alike and shouldn’t sell at similar price points. The Camry-ES350 and Accord-TL pairings are examples of platform sharing done right both on the design and target market fronts. Malibu-Aura flunks on target market. G3-Aveo flunks on all counts.
FreedMike :
April 23rd, 2009 at 9:46 am
I’m sorry, what kind of car “guru” would suggest that Chevrolet abandon its top selling product, the Silverado, as the company is going bankrupt, no less?
By the same logic:
*Coca-cola is going broke. Dump Coke!
*McDonald’s is going broke. Dump the Big Mac!
Frankly, that suggestion is suicidal and makes me wonder what kind of guru this guy is.
Jim Cramer?
I like Ike too, but I’m not going to want a Cadillac when you have so many other better choices on the market.
I like the idea of Chevrolet cars – and GMC trucks – being sold in the same dealership. Of course, Ford, Nissan, and Toyota sell trucks under the same brand as cars, so you could not argue market precedent here.
While I’m still losing – I am a HUGE fan of the Toyota Nothing SE! (SE means it’s sporty…)
Will a vastly downsized GM with perhaps a better credit rating but vastly smaller economies of scale be able to maintain some of its strengths listed above, such as DI and pickup architecture?
Mrb00st:
Saab hasn’t had a hatchback since they re-designed the 9-3 in 2003. And “intelligent design”? Give me a break. All of their models have been stale designs based on someone else’s platforms since the GM takeover. Face it, GM ruined your favorite car company.
Maybe Good GM would be better off with today’s competitive GM products, regardless of brand:
Silverado
Suburban
Malibu
Corvette
Camaro
G8
Enclave
CTS
Good GM might need to also keep Cobalt and Equinox for CAFE.
The other 40+ models GM makes are either not up to par with competitors or are just clones of the vehicles on this list.
This list looks like GM could realistically support only one dealer brand.
njoneer :
You hit the nail on the head. Forgot to mention that in my own post above.
PaulieWalnut :
April 23rd, 2009 at 9:55 am
This article’s veneration of the ‘brand’ seems to pay no attention to the real world. Chevrolet sells only vanilla cars which means the Aveo, Cobalt, Malibu and Impala. Therefore all the Chevrolet dealers get murdered because they have no trucks to sell. Pontiac and GMC are left selling gas guzzling sportscars and trucks.
Hole-in-one.
And who complains that Toyota’s line is “vanilla,” despite having some of the most boring-looking Anycars on the face of the earth? Who complains that Toyota makes trucks that guzzle at least as much gas as Chevy’s, plus not one, but two sumo-sized SUVs?
This editorial highlights the folly of trying to swat the proverbial “bad” GM on the nose with a newspaper when it won’t stay down.
Create two new separate companies out of Chevrolet and Cadillac. Lose the GM name entirely. Both names can stand on their own.
Why does the new Chevy have to offer sedans at all?
Why not go with:
GMC: All Trucks, SUV’s and crossovers (world class)
Cadillac: Evolve the existing lineup. ‘Sclade, CTS, new STS (7 series/S class competitor), etc.
Down the road, maybe Cadillac tries to take on the A3 and the 1 series, but you don’t need GMC or Chevy trying to take on the Civic, Corolla, Accord or Camry. That’s financial suicide, and any pathetic attempt will cost the new ‘brand’ credibility.
This discussion illustrates part of the problem that burdens GM.
The brands should be there to serve the company and its profit goals. But instead, they have deteriorated into a huge weight around their necks. They spend more time fixated on trying to save brands from death than they do trying to make money. As a result, they lose money and the brands are still dying.
Someone at GM needs to sit down with a notepad and answer this question — if you were starting from scratch, what would you do? If your goal was to make money and compete with the existing players, would you or wouldn’t you create eight car brands from the get go in order to do that?
If you were starting a new car company from scratch, it is obvious what you would do — you would build a couple of solid bread-and-butter products, and use those to build your rep with your future audience. Think VW Beetle, Datsun 510 and 240Z, Honda Civic and Accord, Toyota Corolla and Celica, Ford Model T or first generation Taurus, Hyundai Sonata, etc.
You’d also want to avoid having conspicuous losers that could drag down your name. Think Hyundai Excel, Chevy Vega, Ford Pinto, etc.
GM circa 2009 has plenty of lessons available from automotive history that make it obvious. The model works: Create two or three winners per brand, and invest heavily in using those winners to reinvent a reputation. Use those winners as a foundation to sell cars today and to build a brand that will sell even more cars tomorrow.
The only reason that GM should have eight brands, or even four or five brands, if it can come up with enough home runs for each of them, and without cannibalizing them.
But guess what? It can’t. Nobody could. There is simply no way that any car company could develop 16 or 24 home runs — there just aren’t that many innings in the game.
This is why the successful companies have rejected the GM brand-for-every-whim-under-the-sun marketing model. If you try to spread automotive goodness over a multitude of brands, you spread it too thin. You end up with 24 strike outs instead of three homers and some solid triples and doubles that can be batted in. Success does not come from flailing away at the ball, but with how well you hit it.
The reason GM cant have more than 2 brands is that they cannot manage them. Two brands leaves a single boundary line between them. GM cannot deal with more, as they have shown for the last 40 years. Add even sub-brands, and the plan gets muddled.
Pch101 has me thinking. This really is a clean sheet of paper moment. One mass market brand, one luxury brand. If GM were known for its cars and was not a big truck company, I would say ditch Chevy and go Saturn. But if you do this, you have to keep GMC for trucks because no red blooded american male will buy a Saturn pickup. And I don’t think GM will be able to manage 3 brands. So it’s gotta be Chevrolet. Pack it with the best of what GM has, set Toyota as the benchmark, and let them go out and compete. This has the added benefit of each brand having an existing independent dealer network.
As for Cadillac, here’s an idea. Cadillac needs to spend 10 years grossly overbuilding its cars. When an engineer specs out a part, increase quality/cost by, say, 50%. No penny pinching. Everything the customer sees and touches, and all mechanical components. When Cadillacs top every quality survey and have the highest resale because they are so reliable and well built, Cadillac will have its reputation back.
This will guarantee losing money for awhile. Next question, will a new GM have the ability to sustain such a venture? Perhaps not. But if not, then Cadillac will have a difficult time making it.
Everyone seems to know how to fix GM. How many of you all use, own, or lease GM vehicles?
I think that GM should abandon everything but Chevy. Get rid of the GM name altogether, it now has too much negative associated with it. Get rid of all the brands, because as many have pointed out Chevy outsells all the others by a wide margin. Concentrate on building high quality, desireable cars for while to establish Chevy as a good brand, with great products. Then perhaps bring back Caddy as a luxory brand added on top, like Lexus is for Toyota. GM right now is a bad word to almost all taxpayers.
GM as we have come to know it is gone forever. There is no brand cachet or vision left in any of the brands that GM currently own. An American auto company may or may not rise from the ashes of the GM funeral pyre but I would argue that if it has any of the trapings of the old GM still attached to it, it will not survive. To those who grew up with the storied nameplates like Chevrolet, Buick, Pontiac etc. it is hard to imagine an American auto industry without them. Their past glory is just that: past glory and it’s gone forever. GM has so badly damaged the brands in it’s care, they are all beyond redemption. As much as I respect Buickman’s love of GM when it was run well I do not believe that ‘ a return to greatness’ is possible with this corporate entity. No, all the brands must go, all of them, and especially the GM brand. They must start with a clean sheet of paper as pch101 alluded to in his post. Resist the temptation to bring anything over from the old GM to it’s replacement that would hobble it in any way. Bring over the best cars but find new names for them. Doing it any other way will spell doom for the new car company. GM is now in the corporate pallative care ward and the letters DNR (do not ressusitate) needs to be in big bold type over it’s death bed.
Good GM has always been Chevrolet and Cadillac. Cadillac for class and luxury. Chevrolet for everything else. 2 Brands will survive better than 10 different brands all claiming for their own support, marketing $s, new and unique designed metal, etc.
The days of 10 brands with overly shared platforms of mildly differentiated product is over.
GM needs to overcome that perception…well b/c they for decades falsely claimed they were even with the competition. It is just too hard to lie for so long and change perception overnight. GM cried wolf too many times.
“PaulieWalnut :
April 23rd, 2009 at 9:55 am
This article’s veneration of the ‘brand’ seems to pay no attention to the real world.”
Amen. Remember, it was the branding guys in the 80’s and 90’s who put the nail in the coffin at GM. “Branding guru Al Reis” sounds like he’s reading out of a textbook.
I still think GM’s best chances lie with Chevy and Cadillac. As for the bow-tie, I don’t know why Reis seems confused: The concept of a mass-market, value-driven American brand that provides cars and trucks of all sizes is clear enough for me. What’s more, I think most Americans understand it was well. The only problem is, the cars weren’t good for quite a while. But they are now. The problem isn’t branding as in determining mission and market position – it’s getting more people to give Chevy a chance again.
As for Caddy… hey, scoff if you will but I think they’re pretty darn good and much more desirable than a Mercedes, BMW, Audi, Lexus, Infinit, et al. Sure, many won’t agree with me but many do. I want Caddy to be different form the other luxury brands and offer a uniquely American interpretation of the high-end auto – which it is and does.
Steve Biro:
Take a look at the list of GM vehicles
njoneer listed. Chevy itself makes about 3 cars that most car people consider competitive: vette, camaro and malibu. Of the 3, one (Vette) is a limited production niche vehicle. And Caddy? Throw out the trucks and you are left with the CTS/CTS-V. I do think this Caddy can compete with its European rivals. The problem is that nothing else in the lineup can. If you want American interpretations of car classes, only two of these vehicles stand out: the Vette as the uniquely American intepretation of the sports car and the CTS/CTS-V as the American interpretation of the sports sedan/uber sports sedan. The camaro is a good representative of the muscle car, but that is a uniquely American car class.
It’s not that GM has caught up with the competition but the public hasn’t realized it. GM has a LONG way to go. These vehicles show that GM can make competitive vehicles, even class leaders. Unfortunately, GM doesn’t make nearly enough competitive vehicles. Personally, I’m willing to look at GM, but it has exactly one car that interests me, the CTS, and only one I truly covet but cannot afford, CTS-V. I doubt that I am alone in being interested in so few GM products. That is the problem and it is FAR from fixed!
He’s right about Cadillac. When my dad bought a new CTS, all the guys at the country club asked him “why?”. He’d been driving BMWs, Audis, and Lexuseseses before that.