GM to pull the plug on Pontiac

[mjolnir131]

GM to pull the plug on Pontiac

Not only sad but the article reflects just how clueless the execs at GM are.

NEW YORK (CNNMoney.com) -- General Motors is preparing to announce that the Pontiac car brand, once marketed as GM's "Excitement division," will be killed off, according to a source familiar with the decision.

An official announcement is expected Monday. GM spokesman Jim Hopson declined to comment on Pontiac's fate, saying the automaker has no announcements to make at this time.

In its most recent "viability plan" - which will be updated to reflect this new brand cut - Pontiac was not named as one of GM's four "core brands." Those are Chevrolet, Buick, GMC and Cadillac. But Pontiac was also not to be killed or sold off, as were Saturn, Saab and Hummer.

Instead Pontiac was to continue on as a "niche brand" focusing on just a few models.

That was already a step down for Pontiac which in 2008 was the third-best selling brand behind Chevrolet and GMC. That year the brand sold more than Cadillac and twice as many vehicles as Buick. Cadillac is a high-profile - and high profit - luxury brand while Buick is a hugely popular brand in China and is seen as resurgent in the United States.

In 2005, GM (GM, Fortune 500) vice-chairman Bob Lutz referred to Buick and Pontiac as "damaged brands" during a conference at the New York Auto Show. That set off speculation that one or both of these brands was doomed.

With a focus on affordable luxury, Buick's hopes have been revived by models like the popular Enclave crossover SUV. Improvements in Buick Quality, which earned a top ranking in a recent J.D. Power dependability survey and a public acknowledgement by President Obama, have also helped Buick keep its place in the shrinking pantheon of GM names.

Pontiac performance
"There was a time, a long way back now, when you knew exactly what Pontiac stood for," said Kevin Smith, editorial director for the automotive Web site Edmunds.com.

The GM unit's identity as a performance brand dates back to the late 1950s and early 1960s. Pontiac cars were designed with wider bodies for cosmetic reasons and the wheels were pushed out to match. This "wide-track" design became a selling point and was advertised as giving Pontiac cars a distinct cornering advantage over other cars.

But the idea of Pontiac as a performance brand was solidified in 1964 with the creation of the Pontiac Tempest LeMans GTO. That car quickly evolved into, simply, the GTO and is often credited with creating a new class of American car, the muscle car.

Under Lutz, plans were formed to bring back some actual excitement to the Pontiac brand, which hadn't seen much since the Firebird - a flashier Pontiac version of the Chevrolet Camaro - ended production in 2002.

One strategy floated for Pontiac was to sell only, or mostly, rear-wheel-drive cars. That would set it apart from other GM divisions, and most cars sold in America. Rear-wheel-drive is associated with performance brands like BMW.

Unfortunately, the re-introduction of the Pontiac GTO name on a performance coupe imported from Australia didn't result in big sales. So far, the Pontiac G8, a rear-wheel-drive four-door sedan also imported from GM's Australian Holden division, hasn't been a sales success either, despite good reviews.

Pontiac's most popular products remain the G6, a decent but unexciting midsize car available as a sedan, coupe or convertible, and the Vibe, a small wagon shared with Toyota, which sells it as the Matrix.

Any plans to return Pontiac to the heavy-horsepower days of the '70s ended as gas prices rose and Congress prepared stricter fuel economy rules for the industry.

Those pressures resulted in GM quietly introducing the Pontiac G3, which had been sold in Canada only. Once again, Pontiac was selling a rebadged Chevrolet product, this time the Korean-built Aveo subcompact car.

Pontiac's lack of focus as a brand may finally have brought its demise, said Smith. "That's just death in a marketplace where there's so much competition and so much quality," he said.

Pontiac's current role in GM seems mostly to be to support GMC and Buick by providing a brand under which Pontiac-Buick-GMC dealers could sell non-luxury cars, filling out what then becomes a full-line showroom.

The brand-channel strategy now makes it easier for GM to phase out the brand because it would cause less harm to dealers, independent business protected by strong state franchise laws. When GM phased out Oldsmobile in the early 2000's, it cost GM more than $1 billion to buy out the contracts of Oldsmobile dealers who were left with nothing to sell.

This time, most Pontiac dealers will have other products to sell

 

[greg334]

I agree, they are clueless.

Sad, well the company is part to blame, the UAW has had a hand in this too.

But I digress.

They bring out the Camaro when they should be using that money for other things, like adapting more opel products for the US market or trying to get Ford's Diesel over here into their products (hint - VW?)

But alas, as I have said so many times the company needs to rethink its management culture and change at every level. It will die with the Sloan style of managing because it will never change.

 

[Dakota]

I always thought the Pontiac brand sold alot of cars.
Why not get rid of Buick(rebadged Caddy) and GMC(rebadged Chevy truck)

 

[LDB]

Why not get rid of both Pontiac and Buick as well as GMC and have Chevrolet as the pedestrian line and Cadillac as the snooty line?

 

[OntarioVanMan]

Why can't they just put the badges away for now and just make a car and truck with quality and price...they can always run "Special Editions" at a later time.

 

[Dakota]

Having GMC and Chevy trucks is senseless. They use the same frames, same engines, the only difference now is the grill and the badge. Maybe in the past GMC was different but not now.

 

[OntarioVanMan]

Having GMC and Chevy trucks is senseless. They use the same frames, same engines, the only difference now is the grill and the badge. Maybe in the past GMC was different but not now.

why have 2 competing trucks for the same dollars? One well built truck would do in these tough times...

 

[mjolnir131]

That was already a step down for Pontiac which in 2008 was the third-best selling brand behind Chevrolet and GMC. That year the brand sold more than Cadillac and twice as many vehicles as Buick. Cadillac is a high-profile - and high profit - luxury brand while Buick is a hugely popular brand in China and is seen as resurgent in the United States.

See they are keeping the low performers and getting ride of there 3 best,and they are selling Hummer now does the humvee contract go with hummer?

What they need to do is keep Chevy Hummer and Pontiac make Chevy there main badge hummer for all trucks and SUVs and Pontiac there sportier line.

 

[greg334]

Humvee is made by AM General, not GM. The Hummer brand was bought by GM from AM General and it is a stupefied version of the Tahoe. The hummer should go quickly, it was there to fill a market which has long since died.

GMC is the truck designer, not Chevrolet, hence GMC truck division. The Chevrolet for all intent and purpose is a re-badged GMC. (Source GM) Fitting into the Sloan Idea, the GMC is the step up from a Chevrolet so my GMC suburban has better interior and accessory packages compared to the same year and model of Chevy.

The better question is why do they offer Cadillac SUVs and pickups? GM needs to stop competing with its self on these things.

 

[OntarioVanMan]

Thats my idea...why not just produce a regular package and maybe an enhanced version for those who like upgrades....instead of producing 2-3 different models that just scrabble the mix....

 

[greg334]

Thats my idea...why not just produce a regular package and maybe an enhanced version for those who like upgrades....instead of producing 2-3 different models that just scrabble the mix....

Here is one explination - from wiki

"Sloan is credited with establishing annual styling changes, from which came the concept of planned obsolescence. He also established a pricing structure in which (from lowest to highest priced) Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac—referred to as the ladder of success—did not compete with each other, and buyers could be kept in the GM "family" as their buying power and preferences changed as they aged. These concepts, along with Ford's resistance to the change in the 1920s, propelled GM to industry sales leadership by the early 1930s, a position it retained for over 70 years.

And coupled with the management system that he put in place which is still there today, it actually hinders the company from making decisions that may save it.

They never had brand crossovers (they have shared body platforms however) until the hybrid management system came out of the Roger Smith era, which was created to correct the Sloan school for a modern automotive market. The best example of this mess is has been the inability of GM to shed the SUV planning and move to a economy company, they are banking on the Volt which may not make it to market the last I heard a few weeks ago but fail to leverage their cars in Europe, like the Opel models, for the US market. A second example is getting rid of Saturn, it is not because the car is doing poorly, it is because GM people don't like the saturn people - different philosphies and different attitudes.