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Discussion in 'The OT' started by Steve Mehs, Apr 26, 2009.
One of many steps I suspect we'll be seeing at GM and Chrysler like this.
The days where the different GM brands were actually different products ended in the early 1970s. Every 5th Chevy gets Pontiac trim pieces and is directed to a different retail network. The actual costs at the design level to GM of having a "Pontiac" are tiny.
This is about the dealers. The problem is that most states have complex, and dealer controled, rules about manufacturers' relationships with dealers. GM paid millions in damages over Oldsmobile. A bankruptcy, however, trumps all of these laws and lets GM rationalize it dealer network.
I'm pretty sure all the Pontiac dealers in my region sell at least one other nameplate, and that is almost always GMC. Buick would have to be the runner-up. In some cases, they also sell non-GM vehicles.
So if nearly all these dealers sell other brands, it stands to reason most of them could remain open. So how does this translate into a significant savings?
The theory is that GM is competing with itself by having various dealer networks selling the same products. It wants to eliminate the overlapping brands and also eliminate a lot of dealers, such that you, the customer for a Chevy have petty much one and only one local place to buy a Chevy.
GM's idea of a perfect system (legal and other restrictions will never get it there) is for two sets of dealers:
Chevrolet - With Chevy being ordinary cars and trucks for ordinary people. Some, not all, Chevrolet dealers would have the rights to market the Corvette.
Buick-GMC-Cadillac - With GM trying to expand Buick's current oldster image to being a near luxury car for more market segments; GMC being, as today, simply a rebadged Chevy there to provide a truck brand for those dealers; and Caddy (which would not be present in some smaller town Buick-GMC dealers) being the luxury car.
Ford, of course, want to do what it has already done in Canada, with Mercury being simply a "sub-brand" sold as an upmarket Ford at Ford dealers, and Lincoln being the Caddy competitor, also sold by most Ford dealers; Chrysler envisions all three of its brands together in one network as well.
I cant believe they are saying Pontiac is performing poorly when their yearly sales reports show that Pontiac is out selling Cadillac, Saturn, Hummer, Buick and Saab almost 2:1 in most cases. In fact Buick is one of the worse selling vehicles but they are keeping that brand! Interesting!
GM is looking at worldwide sales -- not just North America sales. I hear that Buick sells very well worldwide.
When GM eliminated the Oldsmobile brand, there were two dealerships in my city, both were standalone facilities that exclusively sold Oldsmobile (although the owners had dealerships elsewere that sold other makes).
One of the former Olds dealers purchased the Audi franchise from one of the local VW dealers for his former Olds location, and the other shut down his Olds facility, excecpt for the body shop. The showroom sat vacant, and was eventually torn down. The lot has been used from time to time to store overflow inventory from his other dealerships.
I can see where GM can eliminate some internal competition by eliminating Pontiac, but with so many of those dealers already selling at least one other nameplate out of those locations, I'm not sure it will eliminate many dealerships, except maybe some of the more marginal ones.
My Junior year in High School... worked all summer for this car.. I have very fond memories... the Pontiac Judge 69-70
What was your summer job? Drug dealer?
Actually, I was a mechanic, but due to the illness of my boss (and owner of the center) I was working 1.5 shift days 5 days a week and a regular shift on the weekend... I was hourly so I was making pretty good money BUT...
I was also doing something slightly illegal:lol:
My boss had the police contract for dealing with wrecks involving tractor trailer rigs. We had this gigantic twin boom wrecker for this purpose. We had a day shift driver, but he didn't want to handle night time calls... the boss usually handled them... so I did the night calls. I got to keep any money from those calls and I averaged about 3 per week and generally made about $250 per call. I had a lot of interrupted nights sleep. It was also technically illegal because I was not 18.
The other thing that made this easy was due to the work schedule I had no life... and spent very little!
Here come da judge!!!
A good friend of mine works for GM. Buick and GMC will be gone before long.
Friday's Bloomberg story disagrees with your friend:
It's a little hard for me to imagine GMC trucks not being profitable in the long run though I suspect that somehow Chevy/GMC light trucks will quit competing with each other.
Buick is a strong Chinese brand with a partner. From Motor Trend:
I can't see me buying one, but the target market lives a ocean away from me.
GM selected Buick as its Chinese brand name because "Buick" phonetically sounds out to something like "happy-good" in Chinese. The cars are made in China and have no real relationship to the US brand at all.
Maybe I'm getting older, but I really like Buick designs these days. I hope it sticks around.
GM could do well with (from entry to upper level...) Chevy, Buick, Cadillac. Perhaps keep Pontiac as a niche badge. Then sell off everything else.
Cadillac should never go away, it's a luxury brand, Hummer has a niche, Saturn will more than likely be gone, Buick is a big seller overseas and I don't know enough about Saab to comment, so it only makes sense for Pontiac to go away. Pontiac offered nothing really unique, just rebranded Chevys with a sportier trim, and some of the most ugliest vehicles on the planet like the Vibe and Aztec. I think Buick should go, but being a brand popular in China and for old foggies in the US, it's here to stay, they're down to three models and the Buick Enclave is a twin cousin to the, GMC Acadia, Chevy Traverse, and Saturn Outlook. I did however like the Rainier better then any of it's twins.
Cadillac may be low volume, but it's high profit. Plus Cadillac's CTS coupe is an amazing vehicle that could run with some of the top cars in the world. I used to think Caddy's were just plain ugly but the new design themes (and their FINALLY modern interiors) are very sharp.
Going back to Buick, I really liked the Invicta concept. (attached...)
Yes, I do agree, but where are the signature Buick portholes?
Will Invicta buyers have to swing by AutoZone to get theirs?
Hummer - a loser in the USA: (as Steve says, a niche vehicle) appealing to off-roaders and people wanting to make a statement, like folks with pickups or SUV's that have been converted with highjackers, as well as the export market.
Saturn - there is a group orf dealers and investors that are talking about buying the brand from GM. Still pretty much in the planning stage.
Saab - You can't help but wonder if the Swedes might try to regain the brand. It's a proud Swedish brand that I'm sure they'd hate to see go away.
Pontiac - the brand has languished in recent years. Lots of fond memories of GTO's and Firebirds, but nothing really exciting today.
Buick - although the Buick Lucerne market is mainly older drivers as an alternative to a Cadillac, the Enclave is popular with soccer moms. The LaCrosse just hasn't established itself, but a redesigned 2010 model may be popular.
Chevy, Cadillac and GMC are the brands that are most likely to survive.