Hindsight is a funny thing. With hindsight we gain a forced perspective of all of our actions through the clearest looking glass of them all: time itself. This becomes especially potent when it comes to business decisions, as profit and loss and all of the other financial indicators will tell you exactly where you messed up. Literally, business schools are churning out thousands of cheap suit wearing peons who will tell you exactly where you messed up. Realistically, the bigger the company, the more eyes are on you, especially in times of upheaval.
10 Years Ago, the Games Began
In 2008, General Motors put all of their American Brands through the business equivalent of the Hunger Games, killing off the likes of Saturns, Hummer, Oldsmobile, Pontiac, and Saab — while maintaining GMC, Chevrolet, Buick and Cadillac. At the time this was seen as necessary cost saving measures and was used to propel the stricken company through the sales doldrums that were the late 00’s. With 10 years of hindsight though we are here to ask, did they kill the right brands? We weren’t sure, so we talked to a whole bunch of GM consumers, employees, mechanics, and dealers — and their answers might surprise you.
First we are going to look at the American brands — specifically based on the year 2000 — and their position within GM itself. How did they overlap with other brands in the company? Which makes had the best brand loyalty, and could that loyalty be turned with another brands nearly identical product? Where should have these companies positioned themselves within the greater marketplace in order to create a more monolithic car company? More importantly, did the short term survival decisions of GM potentially limit their overall reach in the future?
The Survivors
[su_service title=”Chevrolet: ” icon=”icon: car”]
Image Via Wikimedia, By Thorsten Lindner, CC BY-SA 4.0
If Chevrolet seems like the brand catch all for GM, that’s pretty much because it is. There is not a single GM car that you can buy in North America that is not also a Chevrolet. For most consumers, this totally works. Specifically, as you move up the fiscal food chain, the interiors and trim options that you can get on your Chevrolet get nicer and nicer. I have test driven new Chevrolets that are nicer than their Cadillac equivalents.
This brings up a very interesting point of contention. With the expanding of their trim packages you can really get a car that is as basic or as luxurious as you want. For example you can go to a Chevrolet dealer right now and pick up an Equinox for around $24k. In this trim package it will have a 1.5 liter turbocharged engine, 5 seats, front wheel drive, and not a whole lot else. However, if you get this with a 2 liter turbo engine, AWD, and a loaded interior with some upgraded rims — you’ll be dropping over $41k. And the worst part is, it’s still a better value than the Cadillac.
The real simple fact here is that GM wouldn’t exist today without the might of Chevrolet. Love it or hate it, it is the cornerstone of the GM brand. So needless to say, if GM was going to survive the marketplace, they had to keep Chevrolet.
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[su_service title=”GMC:” icon=”icon: car”]
Image via Wikimedia, By Carlos D. Rivera, Public Domain
This is where things get a bit interesting. Chevrolets outsell their GMC Counterparts at a ratio of 2 to 1, however, most GMC owners are opting for the high end Denali Option on their Yukons and Sierra HD’s. For that, you pay a lot extra for a chrome grille and some nicer interior features. However, if they got rid of GMC would people not buy the Chevrolet Equivalent?
If they answer “yes” they are truly uneducated consumers. The fact that someone could look at these two lineups and say that there is really anything different from the two beside some subtle styling cues would be truly flabbergasting. One of the ways to possibly alleviate that is to offer a denali option on the Silverado and Suburban models, because they do represent a significant base of the GMC sales. It is a trusted nameplate that exudes an air of luxury about it, which is really what sets the GMC buyer apart from the Chevrolet buyer. However, as we have seen, Chevrolet trim options are much more expensive than they used to be. GMC existed to provide a sort of Oldsmobile/Buick upscale factor to the Chevrolet Truck brand. However, as we have seen this probably isn’t necessary anymore.
So with that being said, GMC could have gotten the ax, but parts of it that were still valuable could have lived on in the form of the highest dollar trim packages of their Chevrolet counterparts. Admittedly, Suburban Denali makes less sense than Yukon Denali, but the likelihood that they were going to go to Lincoln for their big SUV isn’t very high.
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[su_service title=”Buick:” icon=”icon: car”]
Image via Wikimedia, By Unknown – Des Moines Daily News, Public Domain
(The Buick Logo from 1913, the average year of birth of their buyers)
Ok, Buick is where things get even weirder, but bear with us because this is going to use all of our marketing people at the same time to properly go over. Buick has always been seen as the option of the “blue hair”. The member of the Greatest Generation who smokes it out on her way to church and the casino. They probably shouldn’t be driving it anymore but her family is too non-committal to actively take it away from her. So whatever, they bought another Buick. They’re comfortable and reliable and they have been since LBJ was in charge.
However, as there are less of these “blue hairs” kicking around due to the simple fact of mortality, Buick has had to do some significant rebranding to remain competitive in their American sales. Only Lexus has a similar age bracket of buyers, but they have gone about courting the younger generations in remarkably different ways. Lexus has focused on making more interesting cars, that are faster, stiffer, lighter, and generally more exciting. Buick, however, is still making rebranded Cruzes, Impalas, Trax and Equinox.
They’re not the most interesting cars in the world but instead they have focused on branding them as “not your Grandpa’s Buick” — showing young and hip people using their product. As a result they have both lowered the average age of a buyer, but Lexus’ more systematic way of changing it through changing their product has worked better. They have even gone so far as to feature hipsters with blue hair using their car in some of their ads as a cheeky nod to the consumer base that they used to exclusively cater to. It’s smart, but the real reason why Buick survived the GM Hunger Games has nothing to do with the American market. Despite slow North American sales, Buick is absolutely killing it in one of the hottest car markets of them all: China.
Buicks are some of the most sought-after cars in China. With their focus on passenger comfort, and a host of vehicles that are easily modified to have a long wheelbase, the Chinese market is absolutely gaga over Buicks. In fact, one of the best selling Buicks in China doesn’t even exist over here. Chinese executives love the minivan for its large seating capacity, ease of getting in and out of, and overall comfort and refinement. So Buick made them a premium non-kid hauling minivan for their market, and it sells like mad. We see Buicks as kind of boring, the Chinese market sees them as quite interesting. Im sure there is more to this story that we will have to look at in a separate article, but that is honestly enough to save the Buick brand for America. [/su_service]
[su_service title=”Cadillac:” icon=”icon: car”]
Image via Wikimedia, By Sfoskett, CC BY-SA 3.0
Does anyone want a domestic luxury car anymore? According to total market share numbers, no. They don’t. According to 2016 data, Cadillac ranks 5th in terms of luxury vehicle market share in the United States, behind Mercedes, Lexus, BMW and Audi. Lincoln ranks 8th, behind those five, Acura, and Infiniti.
Moreover, most of those sales come in the form of the Escalade SUV — which is an incredibly profitable vehicle for them, considering it started out its life as a $35,000 Tahoe. However, unlike GMC buyers, I do not think that a Cadillac buyer would buy a premium Chevrolet. I think at these price points that they would rather buy a BMW, Mercedes, or possibly a Range Rover.
So with falling sales, a not very interesting lineup, and plummeting market share. The majority of our sources think that the decision to keep Cadillac was short sighted, and the likelihood that Cadillac survives into the 2020’s is very low.
So with that analysis on the survivors, why they survived, and what might happen to them in the future, it’s time to look at the casualties, and where they could have fit. Specifically, we are going to look at where they could potentially be brought back and slid into a spot in the marketplace successfully.[/su_service]
Cue the Taps & Honor the Fallen
[su_service title=”Saturn:” icon=”icon: car”]
Image via Wikimedia, By IFCAR – Own work, Public Domain
First of all, a big thanks to everyone who we talked to for our last Saturn article. We seriously didn’t expect that level of reaction for a car company that hasn’t made a car in 10 years. We understand why GM killed off Saturn, but we think that it could have been easily avoided.
Everyone we talked to feels that if they kept it to the very simple, very cheap mantra that really drove their sales in the beginning, they would have stayed incredibly profitable. Keep them extremely spartan, keep them extremely cheap, and position them in the marketplace against Hyundais and Kias that they would sell very well.
Additionally, everyone that we talked to thought where Saturn went wrong was when they expanded out the lineup to be more like a Chevrolet. If they had stuck with one small car, one 4 door car, and one small SUv or crossover, they would have been fine. However, they spent a lot of time and money rebadging every Chevrolet short of the Tahoe, and that was a bit of a waste. [/su_service]
that they were going to go to Lincoln for their big SUV isn’t very high. [/su_service]
[su_service title=”Hummer:” icon=”icon: car”]
Image via Wikimedia, By Andrzej Harassek, CC BY-SA 3.0
They say that you shouldn’t speak ill of the dead, but “they” never had to drive a Hummer. Seen as the absolute beacon for early 2000’s American exceptionalism in the face of cheap oil, this not very capable SUV sold the paramilitary feel to millions of suburbanites on the back of a Chevy Tahoe, with 2 less seats. We have test driven numerous Hummer’s and the song remains the same, they are s**t. They look terrible, they perform terribly, and they serve as a potent symbol for everything that is wrong with America.
Needless to say, we are kind glad that GM killed off Hummer. Their sales were absolutely abysmal once gasoline hit $4.00 a gallon, and despite the fact that prices have decreased significantly since their demise, we are pretty glad that they are gone. Nothing quite screamed midlife crisis quite like the Hummer.[/su_service]
[su_service title=”Oldsmobile:” icon=”icon: car”]
Image via Wikimedia, By Alf van Beem – Own work, CC-0
This is a tough one for us because, we really like Oldsmobiles. However, with changing buying patterns, it really has no place in the company anymore. Back in the heyday of GM, the common progression was buying a Chevy, to buying a Pontiac or Oldsmobile, to buying a Buick, to buying a Cadillac. At that point, you were usually dead from consumption or diphtheria or lung cancer or some mid-century disease like that.
However, today there is more brand loyalty, and the brands themselves offer more individual vehicles that fit a lifestyle at a specific point in time. In the olden days, manufacturers really only made one or two models. Since then, brands have expanded to having more substantial lineups, offering various sizes of cars, SUVs, and crossovers – rather than having 1 car with 2 or 4 doors, and an option for a convertible on some of the more posh models. Today, you are more likely to go from a small car, to a midsize car, to a people carrier, to another people carrier, to a full sized car, and now that can be facilitated entirely within the same brand.
Oldsmobile really only made cars, and we are cool with that. Yes, they rebranded a Jimmy as a Bravada, but that was never really a game-changer. Oldsmobile’s real bread and butter was their cars. The Cutlass was a solid nameplate that existed for almost 50 years and spawned cars from the roaring 442, to the boxy-yet-hysterically-reliable Ciera.
Oldsmobile was also the test bed for a lot of GM innovations. From putting the radio antenna in the windshield in the late 70’s, to the compact spare in the 80’s — Oldsmobile was the guinea pig for all the new ideas. Our favorite though was when they put a 455 cubic inch V8 into a full-sized car, and then made it front wheel drive.
While Oldsmobile is a “Zombie Brand” we still have a lot of love for them.They will continue to be fantastic cars as long as they are around. So many people in my generation had them as a first car in the form of a hand-me-down from an older relative. Many believe that one of the best first cars of the 2000’s is the Oldsmobile Alero, because a lot of our grandparents had them and ended up giving them to us when they wanted crossovers that were way better in the snow.
Oldsmobile had one more surprise for GM though in their dying breath. GM learned an interesting lesson about warranties with the Alero, offering 10 year/100,00 mile warranties when they stopped production, and then they couldn’t keep them on the lot. So that’s how a lot of us ended up with them, and no one was complaining. [/su_service]
that they were going to go to Lincoln for their big SUV isn’t very high. [/su_service]
[su_service title=”Pontiac:” icon=”icon: car”]
Image via Wikimedia, By Alf van Beem – Own work, CC-0,
When Pontiac was killed off, its sales were really still pretty good. Also, their lineup was fairly simple and solid. However, it had definitely lost a part of its soul. Gone were the days of the roaring GTO and Trans-Am. It didn’t have a Judge, but it did have an executioner. Our Sources came up with an interesting solution, which could make for an interesting opportunity for GM.
The hot hatchback and cheap and cheerful coupe have come back with a vengeance from their slumber of the SUV dominated 00’s. What better nameplate to make performance minded cheap and cheerfuls of Chevrolets than the GM Pontiac Division?[/su_service]
that they were going to go to Lincoln for their big SUV isn’t very high. [/su_service]
[su_service title=”Saab:” icon=”icon: car”]
Image via Wikimedia, By Ballista, CC BY-SA 3.0
Saab wasn’t a car maker — Saab was a freaking cult. First of all, it wasn’t killed off, it was straight up sold to a Dutch company called Spyker. At that time, it was hemorrhaging cash and couldn’t find its way to finishing a car on time or in the correct numbers. However, it had one of the best buyer bases in the world. However, it was always positioned in the marketplace between GM and higher-end brands like Volvo and BMW.
However, we feel like this would have been a tremendous asset had they kept the Saab brand going. This would have served as the perfect test bed for exotic hybrid and EV technologies. Given their higher than average consumer discretionary spending and education levels, they would have been able to experiment with a lot of things that Chevrolet would have had a harder time selling.
Their conventional cars were always pretty awesome, however they could get away with doing things that the rest of GM couldn’t. This got them into a lot of trouble when it came to things like overall project cost and the amount of time it took for them to make cars, but when you’re talking about EV’s and hybrids, you can kind of get away with it. [/su_service]
End Game: May the Odds Be Ever In Your Favor
We’re not saying that GM did anything wrong when they started jettisoning brands in the late ‘00s. We are applauding their ability to react quickly. It takes a lot of balls to kill off a 100 year old brand that literally millions of people have enjoyed immensely. It’s also important to remember that these decisions were made and GM not only survived, but had one of the most incredible rebounds in the history of the industry.
Because of this though, people have their opinions. Passions run high with brands that are this steeped in history. Moreover, no one is ever going to agree what was the truly best course of action. However, here is one of the interesting and comprehensive analysis of what could have happened, or what could happen if GM decided to reboot brands.
So the panel that we talked to of GM owners, mechanics, sellers, and historians have come up with the following TL;DR for the GM Hunger Games:
- Chevrolet – Gains Denali trim options on Trucks and SUVs
- GMC – Dead.
- Buick – Stays alive, simply because of huge Chinese market share
- Cadillac – Dead (probably will be sooner rather than later because of declining domestic luxury car sales)
- Saturn – Goes back to the entry level with 1 car, 1 crossover and competes with Kia and Hyundai
- Hummer – Stays dead, it was terrible.
- Oldsmobile – Stays dead, unfortunately.
- Pontiac – Becomes performance versions of Chevrolet cars
- Saab – Becomes the GM test bed for EVs, Hybrids, and new automotive technologies, goes up against BMW and Volvo
Sources:
- http://gmauthority.com/blog/gm/gmc/gmc-sales-numbers/
- http://gmauthority.com/blog/gm/Buick/Buick-sales-numbers/
- http://www.chicagotribune.com/classified/automotive/sc-cons-0528-autocover-Buick-lexus-youth-20150522-story.html
- http://gmauthority.com/blog/gm/cadillac/cadillac-sales-numbers/
- http://fordauthority.com/fmc/ford-motor-company-sales-numbers/lincoln-sales-numbers/
- https://www.statista.com/statistics/287620/luxury-vehicles-united-states-premium-vehicle-market-share/