GM And Why It's Tough To Kill A Brand Name
After blogging yesterday about the latest discussion at General Motors about keeping/selling/killing some of its eight brands, I was inundated with e-mails suggesting what GM should do.
Randy told me: "If I were running GM I would discontinue all lines except Cadillac and possibly Chevrolet (they should sell Saab and Hummer outright). Then, just go to a separate business unit simply called 'GM.'"
William had a similar idea suggesting this line-up:
Chevy – first time buyers/family
Caddy – Luxury
GMC – Commercial grade (even with high prices – there will always be a need for trucks in the commercial market)
Finally, Robert chimed in: " GM with three dealer faces to the public (Chevy, Pontiac/Saturn, and Cadillac) could be a real viable marketing company with clear differentiation between the product offerings to the public."
You get the idea. Less could be more for GM. And the executives there may be coming to that conclusion as well. So why don't they just pull the trigger?
The hard part is the financial cost. Killing a brand means paying many dealers to transition to other GM brands or get out of the car biz all together. In other words, it won't be cheap to drop Buick, if that's what GM decides to do.
The other part is brand equity. How much is name worth? Saab still has value as a name, which is why I expect GM to sell it, not kill it. And which brand has better positioning/customer recognition in the market? Saturn? GMC?
The point is GM has some tough choices to make in a relatively short period of time. Rick Wagoner has consistently believed in all of GM's have value, and shrinking the portfolio is not the right approach. But just as gas prices have changed everyone's view of the auto market, they may also have the CEO considering a new approach.
Questions? Comments? BehindTheWheel@cnbc.com