GM's Troubles: What Brands Should It Sell To Stay "Alive"?
As GM slogs through a summer of sickening sales, there's growing speculation GM CEO Rick Wagoner will do an about face and finally cut some of the automaker's brands in an effort to stop the bleeding.
While I've never believed a company can cut its way to profitability, I do think there's no time like the present to shed the brands that don't work and re-focus GM. Yes, Jerry York, we know you suggested this a few years back, but that's a discussion for another time.
So what brands do you kill or sell?
Buick: Sales are down more than 21% this year, and it now represents just 4% of GM's total sales. Sorry Enclave fans, but this line-up does very little to bring in buyers. The demographics of Buick buyers is old, the brand is tired, and there is a dwindling and increasingly competitive market for cars and trucks that fall just below the luxury line.
Saab: Sales are down 29% and it represent less than 1% of GM's total sales. With it's cars built in Europe and the price point on the higher end of competitors, It's hard to make money with Saab. Also, like Buick, this brand lacks a position in the market? Entry level luxury? You can get a 1 series or C Class for the same or less.
GMC: With sales down 19%, this brand holds about 12% of GM's sales. The problem for GMC is its truck/SUV/crossover line-up is ill suited for a world moving away from bigger vehicles. What about the GMC Sierra? Won't it always be in demand? I'd argue Sierra fans will transition to the Chevy Silverado.
Yes, I know people will argue Pontiac and Saturn are questionable brands to keep at GM. And there are some compelling arguments for killing/selling them. It depends on how aggressive Wagoner and his lieutenants want to be.
My gut says that if GM thins out the portfolio, it will do so judiciously and with limitations. Either way, the days of GM have a brand for every type of buyer appear to be limited.
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