Can GM Survive on Chevrolet Alone?
A hot topic on the nightly news is GM not filing for bankruptcy, as if it’s a forgone conclusion. Financial analysts hired by the major news outlets love to play Fantasy CEO and tinker with businesses, giving their take on how to turn the automotive giant around. So now it’s my turn as I ask “Can GM Survive on Chevrolet Alone?”
This is, of course, just for fun. Bob Lutz stated on 7/15 that brands (except for HUMMER) were all safe, as were plans for new vehicles for each.
Here’s some not news: June 2008 was a tough month for auto manufacturers. Here’s GM’s figures, compared to their daily sales numbers from June of ‘07 (from Autoblog).
Buick: -34.4%
Cadillac: -3.1%
Chevrolet: -3.5%
GMC: -14.6%
Hummer: -54.2%
Pontiac: -5.1%
Saab: -51.7%
Saturn: -1.9%
That’s a lot of brands for a company, and doesn’t include non-U.S. brands like Opel, Vauxhall, Holden and Daewoo. Toyota has 5 brands (Toyota, Scion, Lexus, Hino, Daihatsu) and Honda a tiny 2 (Honda and Acura). Creating great vehicles is not GM’s problem, they have competitive models in every range. A portion (arguably a large portion) of the company’s struggles are industry-wide, like a changing marketplace due to fuel costs. But could GM just have too many brands? Could a part of the problem be creating vehicles for Chevrolet, Saturn and Pontiac that compete with each other? And trucks and SUVs from Chevrolet, Buick, Hummer and GMC all fighting for the diminishing heavy vehicle market?
We all know trucks took a big hit, and the GMC sales figures reflect that. With the popularity of the Chevrolet Silverado, why not move the more popular GMC vehicles into the Chevy brand (like the Yukon Hybrid and Sierra) and eliminate GMC?
Buick, Cadillac and Saab target many of the same people, with the Cadillac brand being strongest at this point. Saab could be sold for cash, but what about Buick? Could Buick’s offerings become Cadillac’s? The Cadillac Enclave has a nice ring to it.
It’s no secret Hummer’s for sale with GM hiring CitiBank to investigate the possibilities. Let’s assume it’ll sell.
Then there’s Saturn. Saturn seems to be largely providing the U.S. with Opel vehicles. That’s not necessarily a bad thing, but GM admits there’s a problem with the volume of sales with Saturn.
We go to Pontiac for a Chevrolet with extra power and a bit more aggressive styling. It does beg the question why there isn’t just an option to add that power, and little more flair, to your favorite Chevrolet. Does GM need the Pontiac brand? Is the question heresy?
There’s savings in consolidating brands, from advertising to overhead. Not all customers of one brand will be lost, they can be recaptured as Chevrolet or Cadillac buyers (ok, I kept Cadillac, it is GM’s other strong international brand).
What do you think of the thought-experiment? Way off base? Sad but true?
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