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GM likely to drop overlapping models instead of brands

GM likely to drop overlapping models instead of brands

Viknesh Vijayenthiran July 8th, 2008 Viknesh Vijayenthiran By Viknesh Vijayenthiran Author July 8th, 2008
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December 31st, 1969 General Motors has widely been reported to be considering dropping several brands as it struggles in a climate of falling demand, rising fuel prices and material costs and increased competition, but the carmaker insists that the only brand under review is Hummer. Reports emerged earlier this week claiming Pontiac, Saab and Saturn were also possibilities for being axed, however GM sales chief Mark LaNeve has reassured dealers that the carmaker is not conducting a strategic review of any brands other than Hummer. What GM hasn’t ruled out is the possibility that several overlapping models, especially in the SUV and pickup segments, could be dropped. An inside source has revealed to The Detroit News that GM’s operations review will result in the purging of overlapping models and a shift in emphasis to more fuel-efficient cars. GM currently spends money developing and marketing similar vehicles under several different brands but achieves sales comparable to competitors with fewer models in the same segment, and often only a single model. Its current portfolio also includes 12 different SUV models among eight brands, and only four compact or subcompact cars that the market is demanding. To paint a clearer picture of how muddled GM’s portfolio is, the carmaker sells four-different midsize SUVs in the same segment with the Chevrolet Traverse (pictured), Saturn Outlook, GMC Acadia and Buick Enclave line of cars. Chrysler has already revealed its own plans to reduce its ‘twin models.’ Prime examples of the failed twin scheme include the Dodge Avenger/Chrysler Sebring pair, the Jeep Liberty/Dodge Nitro, and the Chrysler Aspen/Dodge Durango. It’s not likely that Chrysler will step into the current product line to make cuts mid-cycle, but will instead change its development plans to eliminate such overlap.
GM likely to drop overlapping models instead of brands

GM likely to drop overlapping models instead of brands

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General Motors has widely been reported to be considering dropping several brands as it struggles in a climate of falling demand, rising fuel prices and material costs and increased competition, but the carmaker insists that the only brand under review is Hummer. Reports emerged earlier this week claiming Pontiac, Saab and Saturn were also possibilities for being axed, however GM sales chief Mark LaNeve has reassured dealers that the carmaker is not conducting a strategic review of any brands other than Hummer.

What GM hasn’t ruled out is the possibility that several overlapping models, especially in the SUV and pickup segments, could be dropped. An inside source has revealed to The Detroit News that GM’s operations review will result in the purging of overlapping models and a shift in emphasis to more fuel-efficient cars.

GM currently spends money developing and marketing similar vehicles under several different brands but achieves sales comparable to competitors with fewer models in the same segment, and often only a single model. Its current portfolio also includes 12 different SUV models among eight brands, and only four compact or subcompact cars that the market is demanding.

To paint a clearer picture of how muddled GM’s portfolio is, the carmaker sells four-different midsize SUVs in the same segment with the Chevrolet Traverse (pictured), Saturn Outlook, GMC Acadia and Buick Enclave line of cars.

Chrysler has already revealed its own plans to reduce its ‘twin models.’ Prime examples of the failed twin scheme include the Dodge Avenger/Chrysler Sebring pair, the Jeep Liberty/Dodge Nitro, and the Chrysler Aspen/Dodge Durango. It’s not likely that Chrysler will step into the current product line to make cuts mid-cycle, but will instead change its development plans to eliminate such overlap.

Tags: General Motors

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Comments (8 total)

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  1. By James #1, Posted: 7/9/2008

    Don't hold your breath. This is the same GM that vowed to end badge engineering... only to continue the practice. Pontiac dealers cried foul and soon a rebadged Chevy Cobalt appeared as the G5 (first ever!). Chevy dealers must have cried as well, so they get the Traverse. Even cars not ostensibly badge-engineered --Aura and Malibu-- are based on the same platform and can only serve to cannibalize each other. So many self-inflicted wounds, no wonder GM is bleeding to death.

  2. By HECTOR #2, Posted: 7/9/2008

    James has it right.

    But more than that. If GM doesn't have the balls to do what's necessary to stop the bleeding, taking instead half ass measures, then it will continue and sooner or later it will be fatal. GM will not die, it's too big for that. But there are brands that have outlived their usefulness and should go. Buick, Saturn, Saab and maybe even Pontiac should go the way of Oldsmobile. And I don't think they will be missed.

    And while we're cleaning house get rid of the entire management team, specially the useless loud mouth Bob Lutz.

  3. By Jim #3, Posted: 7/9/2008

    Cutting brands is expensive, in most states GM would need to buy out the franchisee. But if they keep the brand but only provide the dealers with a few models to sell they may force consolidation and shrinkage while skirting the state franchise laws.

  4. By Sal Collaziano #4, Posted: 7/9/2008

    Buick needs to stick around for a few reasons. First, they're doing great in China. Second, the new vehicles are going to be excellent. The Enclave is an excellent luxury Crossover. From the pictures we're seeing, the new LaCrosse looks VERY promising (finally). Surely the next Lucerne will get this treatment as well. Third, what other pure luxury company exists at GM? Not Cadillac - they make BMW-like luxury "sport" cars now. If Buick goes away, we're just handing all traditional luxury car buyers over to Lexus.

    I agree that the overlap must go. Either cut brands or make each one carry vehicles with specific intentions. Chevy - economical (but not crappy) cars. Pontiac (if it must stay) small sporty cars. Buick - luxury cars. Cadillac - luxury sports cars. GMC? If GMC is going to stick around, than they should be building "professional grade" trucks - not Chevy. Saturn (Opel)? Saab? Not sure what to do with them...

  5. By HECTOR #5, Posted: 7/9/2008

    Come on Sal! In what universe is Buick a *pure luxury* marque?! The word Buick is not even near Toyota, much less Acura or Infiniti. They're not in the same market.

    Buick is doing well in China? OK. Build it and sell it in China only.

  6. By Tom Mills #6, Posted: 7/10/2008

    How about:

    Chevy - mainstream cars, GM's version of Toyota
    Pontiac - bye bye
    Saturn - Upscale mainstream with a Euro twist
    Saab - sell it to the french (Saturn can fill in here with all it's rebadged Opels)
    Buick - Entry-level luxury (target Acura & Infiniti)
    Caddy - High-end luxury
    GMC - commercial trucks only
    Hummer - ??? GM has the opportunity to take over Jeep's market but decided to go too over the top. Now this brand is dead in the water.

  7. By sandra #7, Posted: 7/20/2008

    HECTOR: what universe are you from? The name Toyota sounds as cheap as their labour. In fact now that there is so much controversary regarding GM and toyota, I've really started to take notice and comparing. Actually there is no comparision, GM vehicles are quality built, in fact the Oshawa #2 plant won its gold Plant quality award for the second consecutive year, meaning it produced vehicles with the fewest defects among car and truck plants in North and South America. Has Toyota won anythng lately??? Take a good look around next time your out driving your bike.

  8. By danny #8, Posted: 7/21/2008

    Did you see the new Camaro, now that's class. Toyota and Honda have nothing to compare. Way to go GM!!!!

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