View Full Version : GM Refocusing Its Car Brands

05-20-2005, 07:58 AM
Monumental News from todays Detroit News:<p><TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD><i>Quote &raquo;</i></TD></TR><TR><TD CLASS="quote">GM SHIFTS STRATEGY FOR BRANDS<p>Only two of General Motors Corp.'s eight brands -- Chevrolet and Cadillac -- will remain full-line marques while the others will offer more limited product lines under a new strategy aimed at building sales, cutting costs and bolstering brand identity. <p>The move marks a shift away from GM's long-held philosophy that nearly every brand should offer a full array of cars, trucks and minivans, said Mark LaNeve, GM North America vice president of vehicle sales, service and marketing. <p>The automaker's goal is to clearly differentiate each of its brands and phase out cars and trucks that don't fit in with a brand or are too similar to other vehicles in GM's lineup. <p>"People say we have too many brands," LaNeve said in a recent interview. "We have too many brands if we try to do the same things with all the brands." <p>GM is revamping its sales and marketing strategy in an effort to reverse sliding sales and U.S. market share. <p>Analyst Jim Sanfilippo of AMCI Inc. in Bloomfield Hills said he believes the changes are necessary and could pay off for GM. <p>"It's like (GM Chairman and CEO) Rick Wagoner and LaNeve putting bricks and mortar back together while they're under fire," Sanfilippo said. <p>LaNeve said mass-market Chevrolet and premium Cadillac will be the two bookend brands, with each offering a broad product lineup. <p>In between, Buick, Pontiac, GMC, Saturn, Hummer and Saab will exist as "focus brands" with more limited portfolios. <p>That means, for example, GM could eliminate either the Buick Terraza or Pontiac Montana SV6 minivan -- which are similar to other GM minivans -- to concentrate on the brands' bread-and-butter vehicles. <p>Pontiac, GM's performance division, is dropping the Bonneville full-size car at the end of this model year and may see its product line further truncated. <p>GM is repositioning Saturn as a more upscale brand below Buick, leaving behind its past as a purveyor of plastic-clad compact cars. <p>"We've made this clear to the dealers," LaNeve said. "Chevy's got to compete heads-up with Ford and Toyota and all the mainstream parts of the market, and Cadillac needs to have everything it can to compete with BMW, Mercedes and Lexus. The other brands need to be tightly focused." <p>A key part of the strategy has been the ongoing transformation of Pontiac, Buick and GMC into a single sales channel where all three brands are sold at the same dealership. GM says the three brands complement each other and give customers myriad options. <p>About half of the GM dealers selling the three brands already have reconfigured their stores to sell all three, LaNeve said. <p>The effect, said David Cole, chairman of the Center for Automotive Research, is downsizing without eliminating brands as some analysts have predicted. <p>"What they're really doing is taking their divisions and shrinking their number in a de facto way," Cole said. <p>LaNeve said GM is also backing off big cash rebates that have helped elevate sales in recent years but undermined long-term brand equity. <p>The mantra now is "value" or "transaction pricing," where vehicles are priced closer to what consumers actually pay for the vehicle. That doesn't mean GM will abandon promotional deals that allow consumers to terminate leases early if they acquire another new GM model, or its current "Hot Button" contest in which GM is giving away 1,000 vehicles. <p>"We're going to be trying to hit much more compelling price points," LaNeve said. "We're clearly not going to go to the market as the incentive leader." <p>That sounds like a smart move to Detroit Cadillac dealer Doug Dalgleish Jr., who says "we need to try value pricing. We'll add more value to the vehicles." <p>Incentives such as cash rebates will be offered a more brand-by-brand and regional basis rather than sweeping one-size-fits-all programs. <p>A former collegiate middle linebacker, LaNeve has become a combination cheerleader and coach in urging GM's marketing team to come up with "big plays." <p>He recently bestowed the first "big play" football on Mark-Hans Richer, the Pontiac marketing director who came up with the idea of landing the Pontiac Solstice as the subject of a task on the reality show "The Apprentice." <p>"All of GM is being asked to think out of the box," Richer said. <p>Over the past month, LaNeve and Wagoner have met with about 2,500 dealers to discuss the new strategy. <p>"LaNeve is giving the dealers a clearer picture, telling them 'we know where we are, we know what we're doing and we know what to do,'" Sanfilippo said. <p>Dealers are weary and wary of the almost daily headlines detailing GM's financial challenges and speculation the company may be forced to drop an additional brand following the elimination of Oldsmobile. <p>GM lost $1.1 billion in the first quarter and has withdrawn earnings guidance for the rest of 2005. <p>Rochester Hills Pontiac-Buick dealer Russ Shelton said the combination of the new strategies and the arrival later this year of such products as the Pontiac Torrent SUV, the two-seat convertible Solstice and the Buick Lucerne signal that GM is in better shape than headlines indicate. <p>"It tells me I still sell the right franchises and the future is very bright for us," Shelton said. <p>By combining Pontiac, Buick and GMC into one channel, "we're hoping we'll have you as a customer for life," Shelton said. <p>The game plan is good news for members of Shelton's sales force who are fatigued with all of the bad news and are anxious to sell the new products. <p>"GM's made some positive moves," said Sue Farrell of Rochester Hills, who has sold cars at Shelton for eight years. "They're really working to redesign the vehicles and offering fresh products. I'm very optimistic." <p>Salesman Adam DeJans says some customers are sensing GM is on the ropes, and using that to their advantage. <p>"They're thinking: If GM wants to stay in business, they better cut me a deal," he said. <p>Springfield, Mo., dealer Lynn Thompson is being patient with LaNeve and the company. "It's sort of like a giant ship on the Mississippi River," he said. "You just can't turn it around. I know GM has to pull up its bootstraps." <p>Even as GM's U.S. market share languishes at historic lows, there is hope in the showrooms that upcoming products will pull the automaker out of its swoon. <p>"They've faced dilemmas like this in the past," said Ed Springs, sales manager at Suburban Cadillac-Buick-Hummer in Troy. "They're strong and they'll find a way." </TD></TR></TABLE><p><IMG SRC="http://www.detnews.com/pix/2005/05/19/asec/gm_dealer_clr_051905.jpg" BORDER="0">

05-20-2005, 12:34 PM
AT LAST!! GM ready to quit badge engineering<p><TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD><i>Quote &raquo;</i></TD></TR><TR><TD CLASS="quote"> <B>G.M.'s Brands to Cut Back on Variety</B> <p><I> DETROIT, May 20</I> - Facing its worst financial outlook in more than a decade, General Motors outlined a new product development and sales strategy Thursday, saying that from now on Chevrolet and Cadillac would be the company's only brands to offer a full lineup of vehicles.<p>That means G.M.'s other six brands marketed in the United States will focus on a narrower selection of segments. GMC and Hummer will continue to sell trucks while Pontiac, Saab and Saturn will focus mostly on cars and smaller S.U.V.'s, with Buick offering some of both. <p>The plan indicates that G.M. is trying to wean itself from what has been a highly criticized product development strategy of keeping costs down by developing the same basic vehicle for many of its brands. It will also probably mean consolidation of the company's more than 7,000 dealers.<p>"GMC, Pontiac, Buick, Saturn, Saab and Hummer can offer vehicles that are very specific rather than shipping millions of identical vehicles all over the world," said Mark LaNeve, G.M.'s new marketing chief, according to a transcript of a speech he gave Thursday in New York. "Our complementary brands won't succeed as 'Little Chevrolets' or less-expensive Cadillacs. They have to be distinctive, differentiated products."<p>Mr. LaNeve also said G.M. would push to make more progress in a continuing effort to package Buick, Pontiac and GMC together under the same roof so that the three brands can be positioned to offer vehicles that each individual brand can not.<p>That would prevent G.M. from shutting another brand, as it did with Oldsmobile; there was concern among dealers that Buick or Pontiac was vulnerable after G.M.'s vice chairman, Robert A. Lutz, referred to them as "damaged brands" at a conference in March. Mr. LaNeve quickly played down Mr. Lutz's remarks at the time and reiterated Thursday that all of G.M.'s brands would survive. <p>"I get asked all the time, Don't you really think you have too many brands?" Mr. LaNeve said in an interview Thursday. "We can't afford to have eight brands if we try to do what we did 20 years ago," he said, referring to the company's traditional effort to make every brand expansive in its offerings. <p>"We can have eight, if six of them have very tight portfolios."<p>Taken to its conclusion, the company's plan suggests G.M. might push the United Automobile Workers to agree to close some plants, because the company is already producing significantly more cars and trucks than it can sell; a recent Morgan Stanley report estimated that nearly half of G.M.'s American production capacity either was idled or was used to make cars that were sold to rental companies, government fleets or employees and their friends and families. <p>"Forty-five percent of their capacity goes to low- or no-return segments," said Stephen Girsky, a Morgan Stanley analyst, who called the new strategy a "good idea."<p>"Instead of forcing yourself to provide a full line of product to all these brands, which is expensive and ends up producing mediocre stuff, you don't force each brand to be all things to all people."<p>But Mr. LaNeve said the company saw the strategy as a way to expand its business with the same number of overall models. <p>"We think we'll have roughly the same models, with the alignment of who gets them being different," he said. Mr. LaNeve said G.M. would try to reduce its reliance on rebates and other incentives by pricing its vehicles closer to their transaction price. The company has led Detroit's reliance on such incentives since it started its Keep America Rolling campaign, which included a wave of no-interest financing offers, after the Sept. 11 attacks. <p>He also said G.M. was open to various combinations of Hummer, Cadillac and Saab dealerships on adjoining property, where dealers could share some operations like service centers. He said Saturn, which is in the early stages of a turnaround plan, would remain a stand-alone brand with an idiosyncratic sales approach. <p>Most G.M. brands will consolidate their product lines. For example, GMC and Hummer will sell trucks, while Buick will sell cars and trucks.<p>The new brand strategy was first reported Thursday in The Detroit News. It comes on the heels of two months of bad news for G.M. Last month, the company reported a $1.1 billion first-quarter loss, its largest quarterly loss in more than a decade. Last week, Standard & Poor's cut G.M.'s debt rating below investment grade for the first time, a substantial blow for one of corporate America's largest borrowers.<p>The company has had some good news this week; J. D. Power & Associates reported on Wednesday that the company's cars and trucks had made significant gains in initial quality surveys of its customers, though Toyota still leads the surveys, and Toyota and Nissan have been making rich profits while G.M. has struggled. <p> "Japan Inc. has passed G.M.," Mr. LaNeve said Thursday. "That chapter has been written. We really feel now that G.M. is the underdog. That's the reality, that's our mind-set." <p>G.M.'s financial problems include soaring health care costs. The company is the nation's largest private provider of medical coverage, with 1.1 million American workers, retirees and their families depending on it for health care. But another major problem is its persistent sales slump in the United States, the industry's most lucrative market. Through the first four months of the year, sales were down 5 percent and market share fell to 25.6 percent, from 27.3 percent in 2004, according to the Autodata Corporation, which tracks sales figures. <p>Critics have said that the company's appeal has been hurt by the strategy of making the same essential vehicle for many of its brands. For instance, G.M.'s plant in Moraine, Ohio, currently makes a midsize S.U.V. that is sold in somewhat different versions as a Chevrolet TrailBlazer, GMC Yukon, Buick Rainier and the forthcoming Saab 9-7x, as well as the Ascender from G.M.'s partner Isuzu. Last year, G.M. started selling four very similar minivans from Buick, Pontiac, Chevrolet and Saturn. <p>Mr. LaNeve said, "I'd rather have four great Pontiacs that are really distinct and stand for athletic design and performance, than seven or eight capable but undistinguishable Pontiacs that fail to fully deliver on the brand's promise."<p>Martin NeSmith, who owns three G.M. dealerships in Georgia and sits on G.M.'s dealer council, the company's leading dealer group, called the development "a positive."</TD></TR></TABLE> <p><I>James G. Cobb, in New York, contributed reporting for this article.</I><br>source: <A HREF="http://www.nytimes.com/2005/05/20/automobiles/20auto.html?pagewanted=1" TARGET="_blank">http://www.nytimes.com/2005/05...ted=1</A> <br><BR><BR>
<i>Modified by Santeno at 3:47 PM 5/20/2005</i>

05-20-2005, 03:00 PM
Good, GM is starting to make sense. I just want to see how up market they plan on bringing Saturn and I want see if they will give SAAB what it needs to be successful and original like its known for being.<p>No more rebadges for SAAB please! 9-7X <IMG NAME="icon" SRC="http://images.zeroforum.com/smile/emthdown.gif" BORDER="0"> They need that Subaru based 9-6X to replace this, atleast that is a crossover and is said to be getting further tuned to be less like the Subaru version (that explains the delay)and the rumoured smaller crossover SUV (9-4X would make sense, take notes GM) to be built in Korea can take on the X3, Freelander, etc and SAAB won't need anymore SUVs. 2 is enough for them.

05-21-2005, 12:11 AM
I like this idea. I especially like the Chevy, Cadilac, Saab and Saturn folios. This make so much sence, somthing GM as a whole hasnt made for quite a while...

05-22-2005, 05:20 AM
Trimming Buick down to only selling the LaCrosse and Lucerne. The Terraza, Ranier, and Rendesvouz need to be dumped ASAP. <p>Pontiac needs the Solstice, a new Firebird, a restyled G6 (the G6 is good but bland and they need to have it become more exciting without being garish). The Montana needs to get the heave ho. The Torrent is ok...for now.<p>Some truly new platforms would be nice too. The LaCrosse is "all new" yet it's largely a restyle of the Regal. With GM "all new" means "warmed over outdated" that is their 2nd problem after having too many product overlaps.

05-22-2005, 08:06 AM
Well, it's a start.<p>I think ultimately (and who really knows) that Buick will go away. I could see a Pontiac/GMC brand down the line - like Lincoln Mercury.<p>Hummer? I think it's a fad. It's passing. Eventually, there will be five strong GM brands.

05-22-2005, 12:56 PM
It'd only make sense to do that. But I'd still drop the Buick and GMC brands.

05-22-2005, 05:17 PM
must i scream my sigature one more time?<br>

05-22-2005, 06:21 PM
<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD><i>Quote, originally posted by <b>KebabGud</b> &raquo;</i></TD></TR><TR><TD CLASS="quote">must i scream my sigature one more time?<br></TD></TR></TABLE><p>Who would buy it?<p>VW -- already has too many brands<br>DCX -- has problems and probably doesn't have an appetite for another acquistion<br>BMW -- memories of Rover are still fresh<br>Ford -- no cash, already has Volvo<br>FIAT -- no cash<br>Toyota -- doesn't buy brands<br>Honda -- I can't see Acura and Saab sharing platforms, but could be a possibility<p>which leaves...<p>Renault -- success turning around Nissan, could be a possibility. Saab and Infiniti off the same platforms might make sense. Renault has the $$ to do it.<br>Peugoet/Citroen -- don't know enough about their situation<br>

05-26-2005, 05:16 AM
Saab would probably be better off apart from GM. If they were to be sold, the buyer would be looking at billions to design new vehicles that are not Opel based under the sheet metal. The sad thing is that SAAB is pretty much dead and buried in the USA under GM's direction. It's a shame indeed.

05-26-2005, 11:19 AM
Any word on Holden or is this just GM USA?

05-26-2005, 12:15 PM
GM US only, hence no Opel, Daewoo, or Holden. I think those companies actually are stable now.. <IMG NAME="icon" SRC="http://www.germancarfans.com/images/forums/nixweiss.gif" BORDER="0">

05-26-2005, 12:58 PM
<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD><i>Quote, originally posted by <b>nismo</b> &raquo;</i></TD></TR><TR><TD CLASS="quote">GM US only, hence no Opel, Daewoo, or Holden. I think those companies actually are stable now.. <IMG NAME="icon" SRC="http://www.germancarfans.com/images/forums/nixweiss.gif" BORDER="0"> </TD></TR></TABLE><br>No, Last I heard GM europe is going through it's own re-organization. Cadillac and Chevy are being expanded there and redundancy is being cut out of the Opel/vauxhall relationship. also manufacturing for the different brands is being farmed out to GM facilities accorss europe, as opposed to keeping each brand's models manufactured in their home countries.

Naga Royal Guard
05-26-2005, 01:50 PM
it would be foolish to cut pontiac - saturn must die

05-27-2005, 09:57 AM
<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD><i>Quote, originally posted by <b>Naga Royal Guard</b> &raquo;</i></TD></TR><TR><TD CLASS="quote">it would be foolish to cut pontiac - saturn must die</TD></TR></TABLE><p>I agree. Kill Saturn and sell Saab for some quick cash. Then take a long-term strategy of making Chevy and Opel (Opel would = Pontiac/GMC in US) into two strong, worldwide mass-market brands. Second, and this is more difficult, work for the next decade or decade and a half, on turning Cadillac and Buikc, yes Buick, into credible luxury competitors, like Toyota did with Lexus. <p>But this is already irrelevant as GM has spelled out their strategy. Oh well.

05-27-2005, 11:40 AM
I think they've already started with positioning cadillac as a luxury world player, but they still need to improve in some areas,especially interior quality.

06-03-2005, 10:10 AM
Here is more detailed info from Detroit News, regarding what exactly will be happening at each of the brands:<p><TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD><i>Quote &raquo;</i></TD></TR><TR><TD CLASS="quote"> GM LAYS OUT PLAN TO TRIM MODELS<br><FONT SIZE="1">Automaker tells dealers that Buick line will be cut back to four or five vehicles</FONT><p>Moving to accelerate the consolidation of its Buick, Pontiac and GMC brands into a single sales channel, General Motors Corp. is warning dealers that only sell the Buick line that they'll have fewer and fewer models to sell in coming years. <p>The message was delivered Thursday during a meeting in Troy of more than 1,000 dealers from the automaker's north-central sales region, including Michigan, Ohio and Illinois. <p>Dealers that sell only the Buick line could face financial challenges as GM pares its U.S. model line in response to falling demand. Buick sales are down 17 percent this year and GM told dealers that <U>Buick's product portfolio will be trimmed down</U> to four or five vehicles from eight. The vehicles most likely to be cut are the Rendezvous crossover vehicle and the Rainier, a midsize sport utility vehicle. <p>To reduce product overlap and save marketing costs, GM is realigning its North America brands and model lineup. <U>Chevrolet and Cadillac will become "foundational" brands</U> with the broadest car and truck portfolios. GM's other six brands will see their product lines pared to only models that meet specific, strategic brand images -- such as trucks and SUVs for GMC. <p>A big piece of that plan includes selling Buick, Pontiac and GMC cars and trucks at a single dealership, rather than at stand-alone stores. About 50 percent of Pontiac, GMC and Buick stores have already been consolidated. <p>"It's really getting the role right and the three work together," Mark LaNeve, vice president of sales, service and marketing for GM North America, said during a recent interview. <p>"I told the dealers straight up, I'd rather you've got three or four great Pontiacs that really deliver on that legendary athletic design or performance and three or four great Buicks that are a cut above," LaNeve said. <p>In recent months, GM has reached out to reassure and rally dealers as part of a broad initiative to revive flagging U.S. sales that contributed to a $1.1 billion first-quarter loss. In May, GM reported a 13 percent decline in sales, and its overall sales are down 6.7 percent this year. Its U.S. market share has dipped to 25.4 percent from 27 percent a year ago. <p>Livonia Buick dealer John Rogin said he felt no pressure to buy into the so-called "single channel" concept, but is open to converting at some point. <p>"We've been a single line dealer for 20 years," said Rogin, who also owns a single-line GMC dealership. "Would I and GM ultimately do better if I had all three brands under one roof? Absolutely. If GM has a plan, we'd welcome a discussion." <p>Jim Bunnell, North-Central regional manager, and Pete Gerosa, GM North America Vice President field sales, service and parts, said Chevrolet will likely market 23 to 26 models, while Cadillac's portfolio will consist of nine to 11 models. Chevrolet now offers 20 models, not counting medium duty trucks and certain derivative model such as Cobolt SS. Cadillac sells nine models, not including high-performance versions. <p><U>Hummer will market four to five different models</U>, up from three choices. <U>Saab's product line will have five to seven models</U>, up from its current four, according to dealers attending the meeting. <p><U>Collectively, the Pontiac, GMC and Saturn brands will have 22-27 models</U>, GM executives told dealers, without providing details. The three brands sell 18 distinct vehicles and plan to produce at least four additional models. <p>GM also told dealers it will cut production by 33,000 units in the last three months of the year. Hurt by lower sales and a stockpile of unsold cars and trucks, GM is reducing North American production by about 110,000 vehicles, or 9 percent, in the third quarter. For the year, GM plans to cut output by about 465,000 vehicles, officials told dealers. <p>GM spokesman Stefan Weinmann declined to comment on GM's future production plans, citing changing market conditions, which may alter production plans. <p>Dealers are concerned that the production cutbacks, together with a new promotion that offers employee-style discounts to all consumers through July 5, could leave them short of inventory, Rogin said. Dealershave largely dealt with bloated inventories in recent years. <p>While some dealers may not agree with GM's new strategies, Rogin said he felt optimistic after the meeting, calling it "the most direct, most truthful, most positive meeting anyone could remember."</TD></TR></TABLE><br>