Saturday, February 21, 2009

GM's Restructuring: Why are they Keeping GMC?

General Motors announced some of their restructuring plans this week. Currently, GM has eight separate brands: Chevrolet, Buick, Pontiac, GMC, Saturn, Hummer, Saab, and Cadillac. The plans now are to cut that back to four brands: Chevrolet, Cadillac, GMC, and Buick. Saturn will be gone. Pontiac will still be a brand on some vehicles, but not a separate division, and Hummer and Saab will be sold (if they can find a buyer).

The oddest part of this plan, to me, is that they are keeping GMC. As I mentioned before, GMC makes a bunch of vehicles that are almost identical to Chevy vehicles. Look, for instance, at the Chevy Silverado and GMC Sierra (pictured above). So, why is GMC needed? The only reason to keep a brand, is if it has an image that consumers can easily identify. Hummer definitely has a brand image, for instance. But can any consumer identify what makes a Buick, or a GMC, distinctive? Other car companies have done well with just two brands--a mass brand and a luxury brand. Some examples are Nissan/Infiniti, Toyota/Lexus, and Kia/Hyundai. So why not have just two brands for GM--a mass brand (Chevy), and a luxury brand (Cadillac)?

Before Congress approves any more loans for GM, it should send GM execs back to the drawing board. I don't think they have gone far enough to make the company competitive in the future.

1 comment:

Fr. Peter Doodes said...

Agreed Doc,

In order to stimulate sales of any item the maker needs to produce goods that people actually need but manufacturers seemed to be locked into a prior to peak oil and banking crash mentality.

The world has changed, the car makers need to change with it and realise that short term gain is not preferable to long term pain; it needs to be the other way around.


PS. GM also own Vauxhall in the UK.