Just how are the Detroit 3 about shrinking their vast lineups of different brands and models to match the current harsh reality of the market? Between them, General Motors, Ford Motor and Chrysler sell 112 different car and truck models through 15 brands in the United States. By contrast, the top three Japanese automakers — Toyota, Honda and Nissan — have roughly half as many choices with 58 models combined sold through seven brands.

Click for ginormous chart

courtesy of the NYT

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Source:
Big Three May Need to Trim Number of Brands
BILL VLASIC
NYT, December 1, 2008

http://www.nytimes.com/2008/12/02/business/02auto.html

Category: Bailouts, Digital Media

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5 Responses to “Too Many Brands?”

  1. Bob A says:

    my vote: kill Hummer first. and maybe slap a big fine on anyone who ever bought one.

    then Buick Pontiac Mercury and pretty much all of Chrysler. Keep Jeep maybe.

  2. Brendan says:

    This really is more of a GM problem than a big 3 problem. Ford has Ford, Lincoln, Mercury and Volvo, and Chrysler has Chrysler, Dodge and Jeep. GM is the one with a million brands, but not much more sales volume than Ford, and is on par (and shrinking) sales versus Toyota. Toyota obviously made a strategic decision when they launched the Scion brand just a few years ago, though this chart curiously doesn’t consider Scion a separate brand, but does GMC. The actual corporate structure doesn’t matter as much as the public perception of it. For companies the size of GM and Ford, three brands probably makes sense; Chrysler could probably get away with two, combining Chrysler and Dodge and keeping Jeep separate or selling it off. Ideally you would have your base brand that makes a majority of the cars for the wide swath of buyers looking for basic transportation and/or utility then add a smaller luxury division and a smaller youth/performance division; pretty much exactly what Toyota has done. Separating the brands helps marketing, but separating them too much, like GM, is just inefficient, and pointless in some cases. If I were in control of GM, I’d sell Saab back to the Europeans (whoever will take it); liquidate Hummer (or try to spin off a Jeep/Hummer brand with Chrysler); move all of the GMC vehicles to Chevy that aren’t already also there; dump the Buick name moving the Lucerne to Cadillac and getting rid of the Enclave (as they already make it in 3 other brands); combine Pontiac and Saturn, purging both of anything that doesn’t fit the performance/youth catagory, move the Corvette to this new brand and make a performance version of the Cobalt for the new brand.

    I don’t think Ford’s attempt to market Mercury to women is a bad idea either, but I don’t know that a separate brand is warranted or desirable. I think a focused model line within the parent company would be a more appropriate approach. Women make a majority of the car buying decisions in the U.S., and all of the auto makers have done a poor job reaching them and producing a well targeted product (see Nintendo, Apple and Bose if you need pointers).

  3. Michael Karesh says:

    Mercury has never been a meaningful brand. About once a decade Ford has made a half-hearted go at it, failed, then gone back to rebadging Fords.

    At least the GM brands used to mean something. I know I’m in the minority, but I firmly believe that if GM’s brands were properly managed they’d be an asset rather than a liability.

    Big IF, of course.

    The real problem: too much centralization at the top. Executive summary of a report I submitted to GM here:

    http://www.truedelta.com/execsum.php

  4. Marktropolis says:

    What about Opel and Daiwoo? Vauxhall? Last I checked, the only divisions of GM that were making any money in the last 10 years were the Euro divisions and Saturn. Hang on to the trucks (there is a market there, it’s just smaller than it used to be, and if Obama does what he says in economic stimulus, there are going to be a lot of construction workers looking for pickups in the coming years); keep Saturn (there are still enough people out there who don’t know Saturn is part of GM); Cadillac; and start making Opels and Vauxhalls here (but give them different labels).

    Oh, and they’re waaaay too heavy at the top. They can bitch and moan about union benefits, but add up all the pay and stock options given at the executive level, you it pretty much becomes an even-sum game. There’s a bunch of folks up there making well over $1M a year (not counting options and benefits), which in my world (yes, the skies are blue here) means you don’t get to complain about what anyone else is making.

  5. bostonwolf says:

    Saturn is profitable? I’d like to see a breakout of that. Part of the reason they were folded back into the corporate heirarchy after originating outside of it was that they weren’t making money.

    If GM is going to keep three brands in order to focus it’s marketing efforts, you can’t abandon Chevrolet. It (or possibly Cadillac) have the best brand recognition for them.

    If Toyota is the model, I’d say Chevy, Cadillac and GMC Trucks (people will always buy trucks and GM makes pretty good ones) are the way to go.