Quote Of The Day: GM Battles The Branding Boogeyman Edition

Edward Niedermeyer
by Edward Niedermeyer
quote of the day gm battles the branding boogeyman edition

In TTAC’s early years, we spilled much digital ink over GM’s bloated brand portfolio, wondering again and again what brands should be cut, which should move upmarket and which should move downmarket. It’s a fun exercise, but one that history has largely passed by. Not only did GM cut Saab, Hummer and Pontiac in its bankruptcy, but Chrysler has more than doubled the potential number of brands to be sold through its distribution channels, shifting the brand-clutter center of gravity towards Auburn Hills. But GM isn’t done struggling with the legacy of the Sloan system, as GM North America boss Mark Reuss tells Automotive News [sub] that GM still has at least one major branding battle on its hands: Chevy versus GMC.

We need to make sure that we drive the differentiation in the product and the price to create that separation that we know we can on GMC and Chevrolet. I don’t think we have the margin opportunity set up quite right with GMC.

Reuss goes on to explain that GM’s two-brand truck strategy is sound, but that if “you don’t do it right, and you’ve got price overlap and identical incentives and go-to-market strategies then you’re going to get dilution.” So, if cutting GMC isn’t on the table, what does Reuss suggest as a way to stop Chevy and GMC trucks from cannibalizing each other?

I think we can do premium Chevrolets, and take GMC and move it even further up

Can they? If so, how? More importantly, with the pickup market at a 30-year-low and likely to decline further even before truck-unfriendly new CAFE laws hit, is it even worth keeping two truck brands? The problem is likely that GM can’t kill GMC without killing Buick as well (as the two brands share a dealer network) or at least radically reshuffling its retail strategy. So GMC will push on upmarket, even as GM eyes short-term production cutbacks and long-term existential threats to its truck business as it knows it. Given that Ford is charging a premium for its (relatievly) economical Ecoboost V6-powered F-150, might GMC’s new ever-more-upmarket mission include fuel economy upgrades over comparable Chevy models? Or is this strictly a more-leather, more electronic gadgets-type move upmarket?

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  • Cole Cole on May 10, 2011

    I think GMC could definitely be further (farther?) upmarket, and Cadillac should just be cars. GM knows higher is where GMC is supposed to be. Perhaps if the yk Denali had the same interior differentiation as the Escalade does now, perhaps maybe an exclusive engine, xenons, maybe, a cool truck. Complete pickup-truck haulin capability, but statusy, and not an ugly Lincoln. I think there's more than a decent demand for nice trucks, and from who better than GM? The King Ranch only goes so far (as do Ford's luxury fingers). But what of the work truck problem? The Silverado can come with Malibu panels OR truck plastics, for the selective buyer. Could the Sierra, post-Denali, put its foot down at the work interior? (I don't think they can be merged)

  • Nrd515 Nrd515 on May 12, 2011

    I don't really understand the problem. The "development costs" for the GMC version the the Silverado is almost nothing, and there is very little difference, except in appearance, so basically every truck they sell is another Chevy anyway. When I was looking for a truck back in 2000, I wanted a Chevy over the GMC because the front end looked better and it had better looking wheels on it. I looked and was unable to find a Chevy, so I went to the close by GMC dealer and they had about a dozen of them equipped just the way I wanted, at least one of every color they made. The deal was made quickly, and the only nonsense was when the salesman says, "Well, A GMC will always cost more than a Chevy!". I just said, "I hope you aren't serious!". The sticker was about $37 higher than a nearly identical Chevy at the other lot, (not including the awful looking running boards, bed rails, and mud flaps the dealer had tacked on). I raised my top offer $50, and told them that was it, final offer. I had to get up to leave twice before they said yes, then they almost killed the deal when they sent us into the F&I office and the moron they put us with pissed us off to the point where we threatened to leave if he didn't go. He was sarcastic, agressive, and just plain obnoxious. They sent him out and put another guy with us instead. I have to say my dealings with Dodge dealers since then have been much more pleasant then the GM dealers have been, ever, even going back over 30 years.

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