Sign in to follow this  
Followers 0
FUTURE_OF_GM

This is what I've been saying for a LONG time

7 posts in this topic

Well that seems like some bad advice and perhaps explains GM's continued meltdown.

In the end, the "small circle" approach is still going to cost more money than the "big circle" approach. You end up chasing larger market share at the expense of profits per vehicle. Unless you are brilliant, the "small circle" approach leads to complexity and inferior products in an attempt to hit all the small circles. It isn't just a matter of changing the cladding, tail lights, and brand. This is what GM has been doing for years now and it doesn't work.

You have to ask yourself if, for example, selling a similarly-featured Malibu at a higher price than an Accord (or at less of a profit) is worth it to be able to have the potential opportunity to sell another slightly different but also over-priced (or lower profit) model to someone else who might have bought the Malibu anyways. Also consider that the "big circle" alternative was that they both could have bought the Malibu for less money (or GM could have made a bigger profit per sale).

This sounds like an example (both for FOG and GM) of following whoever whispers in your ear what you want to hear.

Edited by GXT
0

Share this post


Link to post
Share on other sites
Well that seems like some bad advice and perhaps explains GM's continued meltdown.

In the end, the "small circle" approach is still going to cost more money than the "big circle" approach. You end up chasing larger market share at the expense of profits per vehicle. Unless you are brilliant, the "small circle" approach leads to complexity and inferior products in an attempt to hit all the small circles. It isn't just a matter of changing the cladding, tail lights, and brand. This is what GM has been doing for years now and it doesn't work.

You have to ask yourself if, for example, selling a similarly-featured Malibu at a higher price than an Accord (or at less of a profit) is worth it to be able to have the potential opportunity to sell another slightly different but also over-priced (or lower profit) model to someone else who might have bought the Malibu anyways. Also consider that the "big circle" alternative was that they both could have bought the Malibu for less money (or GM could have made a bigger profit per sale).

This sounds like an example (both for FOG and GM) of following whoever whispers in your ear what you want to hear.

I agree wholeheartedly.

I also agree with FOG. We don't need less models, but rather, need brands to have their own vehicles. Platform sharing really just means you sell the same car with a different wrapper. It clearly hasn't worked well for the last 30 years. If GM wants to keep Pontiac, then it needs the Pontiac cars to be truly unique. If it wants to keep Buick, then Buick should be unique, not just a gussied up Chevy. Do you have to engineer a brand new platform for different brands? No not really. You can take the same architecture and tailor it for a specific brand. For Buick you stretch it and soften the suspension. Work hard to isolate any vibrations. Make sure it really does drive and handle differently than the chevy. The cars can be cousins, but never brothers.

Edited by network engineer
0

Share this post


Link to post
Share on other sites
We don't need less models, but rather, need brands to have their own vehicles. Platform sharing really just means you sell the same car with a different wrapper. It clearly hasn't worked well for the last 30 years. If GM wants to keep Pontiac, then it needs the Pontiac cars to be truly unique. If it wants to keep Buick, then Buick should be unique, not just a gussied up Chevy. Do you have to engineer a brand new platform for different brands? No not really. You can take the same architecture and tailor it for a specific brand. For Buick you stretch it and soften the suspension. Work hard to isolate any vibrations. Make sure it really does drive and handle differently than the chevy. The cars can be cousins, but never brothers.

But how can you have relevant unique vehicles for that many brands? Why the extra work to make a soft version of the Malibu for Buick? The consumer likely would have bought the Malibu anyways. That's the real secret to GM trying to get the Malibu to compete with the Accord/Camry/Altima: put your resources into making one great car at a better price.

Also, GM needs to stop offering so many configurations for their cars. If I want to configure a cobalt I have this to select from:

LS (Opt ABS): 2 permutations

LT 1LT (Opt: Mylink, ABS, Cruise, Upgraded Audio): 16 permutations

LT 2LT (Opt: USB Stereo, Pioneer Stereo, Steering Wheel With Audio Controls, Sunroof): 16 permutations

SS (Opt: Differential, Sunroof, Performance Display, Upg Stereo): 16 permutations

That is 50 permutations. And that doesn't take into account tranny, coupe vs sedan, dealer installable options (I assume those stereos come installed from the factory), or paint colours.

It also doens't include the G5 probably repeats all the same permutations in one way or another.

The cost of maintaining so many options is wasteful on many levels. GM needs to stop doing that. You want the LT 1LT? That has ABS and Cruise standard. If you don't like it, buy the LS (which has no ABS option).

You can't be everything to everyone. You can try, but only if you continue to let the tax payer pay for it.

0

Share this post


Link to post
Share on other sites

This was such a well researched article, that I actually kept the magazine for my files.

GM should not emulate Toyota; I have been saying that for a long time. This also proves that Wagoner saw the writing on the wall a few years ago and hired outside help for fresh ideas; whether those ideas work or not, we won't know for some time, but it never hurts to have an outsider look at the books and comment.

Every time I read a new take on what happened at the Senate hearings, I can't help but worry about how all of this is playing into Toyota's hands. After all, if you have to go before Washington and spell out EXACTLY what your future plans will be, doesn't that sort of tip off your competitors? I hope Wagoner faxed Toyota a copy to save them the hassle of hearing it 3rd hand.

0

Share this post


Link to post
Share on other sites

i love how everyone always says we need fewer brands to save marketing costs.

how about we become more efficient and productive with our marketing money?

the way GM and promotes and advertises its products is annoying. And seldom works. Perhaps better promotion concepts and ideas would help.

now dealers? yes, there are too many. but those cannot be completely cut efficiently. gradual phase out is needed.

when the market contracts, you need fewer MODELS. when the market was strong 8 years ago and the buff books and critics were saying each carmaker needed to chases each niche, you'd say GM's brand strategy was an advantage.

0

Share this post


Link to post
Share on other sites
i love how everyone always says we need fewer brands to save marketing costs.

how about we become more efficient and productive with our marketing money?

Why not do both?

when the market contracts, you need fewer MODELS. when the market was strong 8 years ago and the buff books and critics were saying each carmaker needed to chases each niche, you'd say GM's brand strategy was an advantage.

It probably was an advantage when they had 50% of the market. But I don't think it makes sense headed to 10-15%.

0

Share this post


Link to post
Share on other sites

Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   You have pasted content with formatting.   Remove formatting

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

Sign in to follow this  
Followers 0