Fiat Kills Yugo. Dozens Bummed.

Martin Schwoerer
by Martin Schwoerer
fiat kills yugo dozens bummed

Brand management can be so easy. Take car brands. You take a good clear look at your portfolio, you write down in simple language on one piece of paper what positives, negatives, and potential of each brand. Kill the brands that are below par, lack a USP (Unique Selling Point) and/or wouldn’t fetch chump change on the market. At least, that’s what I’d do with Seat, Lancia, Maybach, Daihatsu, Kia (or Hyundai?), Mercury, Dodge, Pontiac, Cadillac, Hummer, Saab, Vauxhall. Did I forget anything? Yugo, girl! Yes: Tony Fixed It Again, this time for good. Fiat, bless their soul, has decided it will close down the Yugo brand. Just-Auto reports that, contrary to previous plans, Fiat will not do a Dacia. The Balkan factories will be used for low-cost manufacturing, and nothing else. Serbia is grieving: apparently, Yugo was one of the (few) things that held Yugoslavia together. Anybody who ever sat in a Yugo or God forgive, ever drove one, rejoices. The Topolino, a two-cylinder urban competitor to the Smart and the iQ, will be built in Yugo’s former Serbian digs from around 2012. Also, Serbia has high hopes to join the EU, sooner or later. Life goes on, often better than before, after you cull a sick brand.

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  • Cammy Corrigan Cammy Corrigan on Nov 21, 2008

    Mr Schwoerer, I recognise that my method of calculation is crude, but it still doesn't detract from 2 salient points: 1. The Vauxhall brand is still too valuable for GM to kill it. GM needs all the (profitable) sales it needs. So, to kill a brand which is bringing in profits doesn't make sense. 2. Even with my crude maths, the point still remains the same. GM's brands DO still have value. If GM went bankrupt, people would still clamour to buy up the brands. Look at it another way. If Ford went under, the "Ford" marque would still be valuable, even though the rest of the company was worthless. This is because "Ford" is still a brand which people recognise, hence, companies would want to get hold of that and stick it on their cars. If you think brand is just a meaningless name, then you couldn't be further from the truth. Here's another example: The Toyota Aygo and the Citroen C1 are re-skinned versions of EXACTLY the same car (bar the diesel engine). Yet, on the used car market, the Citroen C1 will depreciate (far) more than the Toyota Aygo. Why? Because it has a Citroen badge on it and Citroens depreciate fast, whereas the Aygo has a Toyota badge on it and will hold its value better. Even though, they are the same car. For the record, I still believe in Toyota, Honda and Nissan's model of organically growing a brand, rather than having a family of marques (i.e GM). But GM isn't in a position to pare marques down. They're fighting for survival, as it is. So, they'd have to work with what they have and if a brand sells, use it!

  • Menno Menno on Nov 21, 2008

    I have to go with Katie on this one, Martin. Interestingly, Canada also has a similar situation with GM (especially with Pontiac) and specific vehicles for Canada only are manufactured (often in the US after the Auto Pact came into effect in 1965). Also the story about the Toyota Aygo & Citroen C1 are interesting because, in the US, The Pontiac Vibe and Toyota Matrix are essentially the same car (Pontiac version is slightly reskinned but essentially it's 95% Toyota and all of the mechanicals are Toyota). Exact same story - the Pontiac resale value dumps, while the Toyota soars. My wife's best friend needed a reliable used car after a divorce and I helped her locate a used, Toyota built Chevrolet Prizm (i.e. Toyota Corolla) which was about 2/3 the price of the Toyota badged car. My parents bought a Mercury Villager used; it was somewhat cheaper than a used Nissan Quest at the time. Same exact scenario. As for dumping Hyundai?! C'mon, Martin! Hyundai are the 5th largest automobile manufacturer in the world! I could (almost) see rationalizing the cars all as Hyundai, and losing Kia, but then again, Kia is only 50% owned by Hyundai so in order to do that, Hyundai would have to convince the other 50% to sell out; as profitable as Kia are, I don't think so!

  • Martin Schwoerer Martin Schwoerer on Dec 01, 2008

    Here's what Rob Golding of has to say about GM's branding woes, and about Vauxhall: "The whole process of branding in Europe has been strange. GM has for years owned Vauxhall in the UK and Opel in the rest of Europe. The ranges have converged to the point where there is little difference between them other than the badge. GM could so easily have halved the cost of brand development thirty years ago by shelving the Vauxhall name and burnishing Opel. Instead it convinced itself that Vauxhall was too well established to risk change. The simple truth - which could have been confirmed by any random group of UK dealers was that the British market is only too eager to buy cars that are visibly German in origin. Vauxhall cars are good. As Opel cars they would have done better. And GM Europe would have been within a breath of generating an Audi-type success before Audi did it themselves."

  • Cammy Corrigan Cammy Corrigan on Dec 03, 2008

    Mr Schwoerer, What do you mean "As Opel cars they would have done better"? I told you that they tried to push the "Opel" brand during the 80's and it failed. The UK public stuck with Vauxhall. So that statement doesn't make any sense. As for what Rob Golding said, it just mirrors EXACTLY what I have said in my previous posts which was "It's better to organically expand a marque, than growth through multiple brands (i.e growth by acquisition), but GM didn't and now they have to work with the situation they created.". If Europe was a small, fledging market, then GM could afford to mess around with the branding. But the fact is, europe brings in money for GM, especially at a time when GM needs all the profits it can lay its hands on. So, where is the sense in messing around with branding in a market which brings in money (at a time when the parent compay needs money), when the current system is working OK? Maybe, if GM are deep in the black, then maybe they can afford to look at the "Vauxhall" marque. But until then, it makes no sense to kill it.