smk4565

Europe differentiates fairly well with small cars. If gas goes to $4-5 per gallon, people will want small cars, but some will want luxury, some will want performance, so they could do a soft riding Buick that is as small as a Cobalt, a Cadillac like the 3-series, etc. They can differentiate and cover various segments with 4-5 brands. Toyota isn't invincible, but they are in a very good position. They do well in China (the top Toyota outsells the Park Ave), Lexus is growing quickly in Europe. They sold 9.3 million cars last year to GM's 9.35 million, and they sell fewer in the US than GM does, so globally Toyota is doing better actually. More importantly, the last few years while GM and Ford have been losing money, Toyota made $13 billion in profit in 2006 and $15 billion last year.

Toyota has less than 5,000 dealerships in the US, vs about 14,600 for GM. GM isn't selling 3 times as many cars, they don't need 3 times as many dealers. If there were 8-10,000 GM dealers that would be plenty. The other issue GM has to face is rising gas prices, and their product portfolio doesn't address that need right now. They need smaller cars for one, and nicer small cars like Europe has. They should have a CTS or Enclave like interior in a car the size of a Cobalt. 1.8 liter DI turbo 4 cylinders and turbo diesels will be needed also. The Mini cooper has a 1.6 turbo and makes 162 hp, an engine like that can replace the 2.2-2.4 liter ecotecs, matching it to a 6-speed and BAS hybrid can really boost mileage.

If they kill Pontiac, then Saturn would get the Alpha car, Jetta like interior and build quality but rear drive would set them apart from the rest. Like a BMW 128i minus some luxury and prestige. If Pontiac goes, you also use the SS Chevrolets to get performance types, and keep Buick for the slushy-floaty $27-37,000 sedans. Basically if GM picked one of the three (Buick, Pontiac or Saturn) and killed it, the remaining 2 and Chevy could fill all the gaps. Toyota has the Corolla which has sold 32 million units since 1966. 32 million sales in 41 years is about 750,000 a year, that isn't a bad legacy. GM can only bring so many products to market every year. 2008 was Enclave, CTS, Malibu, and G8 (I think Astra is a 2009) and all 4 of those vehicles was on a platform used in 2007 with existing engines. If they can only do 5 products per year, every brand can't get a new vehicle, and models will go for 7 years without update (9-5, H2, GMT360s). The Camaro could be on sale now, but they stopped work on Zeta in favor of GMT900s. With 8 brands they will always move slowly, because they have to spread money and resources thin.

Yes, they do have a bad strategy. I've said for years if Pontiac is supposed to be a sporty Chevy, why does it have the same engine and usually cost less? I see Pontiac as fleet sale central, regardless of what their marketing says. The Lexus LS460 is $70-110,000, if GM is going to compete with it, the car should cost $70-110,000. Cadillac doesn't even have a sedan that bases at $45,000 or higher. An Epsilon LaCrosse could work if done well, but Buick's image is badly hurt, and it would be priced right inline with the Genesis. There is a place in the market for soft, luxurious mid-size sedans, but can Buick win buyers from Toyota, Lexus, and Acura? The reason it is hard for GM to do is there is no money to do it. The company doesn't make profit, so it is hard to crank out new products. Also once Brand A gets a new car, Brands, B, C and D start saying me too, me too, or dealers whine, so GM caves and rebages a car for a quick fix.

TheGriffon is 100% correct about GM's brand strategy. Pontiac is really the lowest priced brand, with Saturn close to it. The LaCrosse and Impala are priced about the same. You can spend more on a Malibu than on a Lucerne, all those cars overlap. The 9-3 is actually the most expensive Epsilon, but it is still under $30k, and costs similar to a loaded Malibu or Aura. The Lambdas may in fact be very good (although not as good as the CX-9) but they aren't as spacious or fuel efficient as a minivan (thus won't replace minivans), their main competitor is full size SUVs, which is GM's strong suit. GM created competition for themselves, rather than making a midsize crossover to replace the aging GMT360s. It does seem like there is no clear strategy other than to make large SUVs because they know how to make profit on that. Enzl said "I can't see a scenario where market share rises." I can. Discontinue the G6, Aura and 9-3, and put all the research, development, production capacity and advertising behind the Malibu. They'll have a car better than the Accord and will sell 400,000 a year with ease, if they are smart and make it a global car, they can sell it elsewhere also. Same strategy works for the Cobalt, forget the G5, Astra, 9-5, 9-7, etc. Make a global Cobalt on Delta II with a 6-speed auto standard, panel fits as good as the CTS, BAS hybrid option, and make it get over 40 mpg average, not highway. They could sell it worldwide (it could get a Holden or Opel badge) and move 500,000 or more, maybe even 750,000. If BMW can sell 500,000 3-series, GM should be able to sell 750,000 Cobalts and 600,000 Malibus/Insignias.

I never said overnight, Saab and Hummer would be easy to phase out of 2-3 years, most of their stuff has been on the market a while already, they can finish out life cycles like they did with Olds. Then they could phase out another brand in 2010-2012. In the process of phasing out Buick for example, they could give Chevy a more luxurious full size sedan (Avalon price range) that would replace the Lucerne in the marketplace. Or if Pontiac is the one to go, make the Impala a little more sporting to replace the G8. Over five years or so they could focus products more and have better products that will sell in higher volume without the incentives.

GM also had about 38% market share in 1990. So that is a 15% slide since then, 5% slide over the past 10 years, they could easily be around 18% in 2017, possibly less if the truck market keeps sliding. Then how do they keep 8 brands going at 18% share or less. The 8 brand strategy has failed for the past 18 years, yet they still want to use it. If they try to keep all 8 running, they will always have dated or uncompetitive products in their portfolio, a dealer network that is too large, dealers going out of business or not investing any money into their buildings because they only have 3 models to sell. If GM continues doing business the way they did in the past, sales will continue sliding. The way to grow is to cut the fat and pump money into the core products. Chevy and Cadillac obviously stay, Hummer and Saab go. The decision then is to cut Saturn and have Pontiac sell a couple small cars from Opel and the Solstice and G8, or cut Pontiac and let Saturn be the Mazda-VW-Honda competitor. A zeta Impala would make the G8 irrelevant anyway, although if they make that Impala nice it can replace the Buick sedans. It would be best if Chevy and Cadillac were individual channels, then either Saturn or B-P-G was the 3rd sales channel. Saturn would be easier to close down.

I do use Baierl in Wexford and the dealership is small and needs a facelift. That building isn't nearly as nice as the Rahal Mercedes/BMW/Jaguar/Land Rover dealerships around Pittsburgh. The problem in Wexford is Baierl has Cadillac, Chevy, Buick in 3 separate stores. Wright has Saab sales in one store, Hummer sales in one store, neighboring GMC/Pontiac Sales and the service for all 4 is done at the GMC/Pontiac dealer. Not exactly pushing the upscale image of Saab when your car is fixed at the Pontiac dealer, even though Saab had it's own service adviser. My mom was a Saab customer there, the service was horrid, I've heard others say that Wright is bad as well, so she is no longer a Saab owner. Saturn of Wexford is owned by another group, but Baierl and Wright have GM split, so that B-P-G and Saab-Cadillac sales channel won't happen, instead there are 6 sales channels and 4 service channels, plus Saturn off on it's own.

I get my car serviced at a Cadillac dealership (they used to have Olds and are one of few places with Aurora parts). The dealership is Cadillac only now, and they own a Buick/Subaru lot 1-2 miles down the road. The service manager told me they wanted to do Buick-Cadillac at the same lot, and GM wouldn't allow them because Buick would hurt Cadillac's image. Cadillac has to stand alone and move upscale, otherwise they are Lincoln-Mercury. The local Lexus dealership has a cappauccino bar and gives back and neck messages while your car gets fixed.

I agree with that, GM moves too slowly, and often seems late to the game, such as how Toyota got the jump on hybrids. The zeta cars were put on hold because GM had to divert resources (people and money) to the GMT900s to get them on the market. I too would like to see W-bodies dead, Alpha and Zeta on sale, but where does the money come from? GM has $6.6 billion a year to spread across the 8 domestic brands, Holden, Opel/Vauxhall and Daewoo/Chevy, etc. That money gets spread thin so they have to keep platforms around longer, and keep products on the road longer without an update. GM has to streamline globally and get more global cars to start making profit and get stronger. GM can't do everything like they once did, the money isn't there. I'd trade the Buick brand for a Zeta Impala that is better than the 300C, G8, Avalon, Lucerne, Genesis, etc. I'd give up Hummer and Saab for an alpha Cadillac that is as good as the 3-series. It is better to have a best in class Malibu, Impala, BTS and CTS than to have 2 W-body cars, 2 G-body cars, 3 dated Saab products, a 12 mpg hummer with declining sales that is getting discontinued in 2011 anyway because CAFE rules change.

People don't buy history. Most of the public thinks Buick is a car driven by 70+ year olds. GM can't keep a brand because of historical value, Oldsmobile was the oldest of all the GM brands. If sales and profits aren't there, and if there is no money to make new products, brands die. Buick sales have been down about 20% per month since the Enclave went on sale. The Enclave does define Buick rather well though, rebadge of an existing GM car, 200+ inches long, overweight, 0-60 time on the wrong side of 8 seconds.

Cadillac needs a car smaller than the CTS, but priced the same, the current CTS needs to get better and move up in price. I agree with the problem of losing sales. GM sales are declining with all these brands because Chevy doesn't get the funding they need so that money can be spread to Pontiac, Buick, Saturn, etc. GM has to cut brands so they can fund the others, otherwise all 8 brands will keep losing sales. If Buick continues at the 11.7% average decline, 2011 sales will be 118,149. Is it worth keeping a brand like that. That drop is possible also, Buick sold 230,000 cars in 2005, and just 185,000 in 2007. I suspect Pontiac sales will continue to decline, unless they see a big increase in fleet sales after stopping Malibu fleet sales. It comes down to a money problem, Toyota has more than GM does, and them putting a ton of money behind the Camry is outselling the Malibu, G6, and Aura combined. Toyota spent $7.5 billion on R&D last year, vs GM's $6.6 billion. Toyota has 26 models in the U.S. vs GM's 47 (I counted all 3 Escalades as 1, all Yukons as 1, etc.) I don't know the total number of worldwide models GM and Toyota make, but if you divide total R&D spending by number of US models, Toyota spends $30 million per vehicle, and GM $14 million. So how does Buick make a car better than the Lexus ES on half the budget?

I don't have a failure mentality, I want GM to come back, but they can't do it with underfunded brands and dated products. The average age of a Buick sedan buyer is 67. Average age of a Camry buyer is 54 (it went up 7 years in a row), Camry and Lexus are very popular among the 50-60 year olds who feel like they were cheated or wronged by Detroit in the 70s-80s. To win back people that have bought imports for 20 years, GM can't just build a car that is as good as the imports, they have to build better. I believe GM still has in-fighting and brand politics. When the XLR came out, they didn't use the supercharged engine of the concept car because it would be more powerful than the Corvette, and they had to wait until the more powerful C6 came out to release the XLR-V. Cadillac was forced to hold back so they wouldn't compete with Chevy, and didn't get what they needed to compete with Mercedes. In 2005, Toyota was 4th in the world in R&D spending at $6.83 billion, in 2006, they were #1 at $7.49 billion. I read the other day on autoblog.com that Toyota is now spending $1 million per hour on R&D. GM in 2005 spent $6.7 billion in R&D, followed by $6.6 billion in 2006 a 1.5% drop. Toyota is throwing more money at fewer products and increasing their budget.

How many did they sell last year? And why is the XLR do 0-60 in barely under 6 seconds, it is an $80k sports car. For $80k you should be able to outrun a Mustang GT. $100k for the XLR-V is crazy too, since it is about as fast as a 135i or 335i, and the XLR interior is nothing to write home about. I love the exterior look of the XLR, although the grille is dated looking now, but no one buys it, and the resale value is bad. Car and Driver reported last month that the XLR was dying after the 09 model year. That leaves them with a fancy Tahoe or the entry level CTS as their halo. Mercedes has Maybach, S-class SL-class and the SLR McLaren. Those are halo products.

I agree the ES is very similar to the Camry, aside from all the mechanical sharing, the body and interior parts are similar. I'd never buy an ES because it's a dressed up Camry, but Toyo-Lex is building a better Buick than GM ever could. They have the 50-65 buyers locked up. For Buick to get that back, they need a LaCrosse that is equal to the CTS. But the GM in-fighting and corporate politics wouldn't allow that, and where does the money to do it come from. GM brands fight each other over resources and when they get new product, how can GM compete with Toyota when they are busy competing with themselves? The other reason to kill a few brands is cost. GM has to spend their $10 billion (I think it is closer to 8 billion) per year on R&D and spread it 8 ways. Toyota spreads their $10 billion 3 ways. 3 model brands isn't the answer either because you still have to split advertising 8 ways. GM would be stronger with 5 brands (perhaps even 4).

The 760i is a V12, the 750i is a 4.8 liter V8. But that is also a 6 speed, and the 4.8 I don't think is direct injection, it is just double vanos VVT. The 4.4 is direct injection and more efficient than the 4.8, plus has 8 gears. The BMW 4.4 liter may not improve acceleration or fuel economy in the Escalade, but I think it is worth doing a test mule to find out, I think both would improve. But why should the Escalade be the halo vehicle for Cadillac? If Cadillac is a global brand, the icon shouldn't be a huge SUV, especially with gas prices rising around the world and here. Cadillac needs a car as it's icon.

4.4 liters often burns less gas than 6.2 liters. If GM had a wider array of high end Cadillacs it would be worth it to develop their own V8 and tack on a light hybrid system to keep it getting 20 mpg, but since they don't have a V8, if they can get BMW's why not test it in an Escalade and see what the mileage and acceleration are, both may improve.

I would have rather seen GM make their own engines to rival BMW, giving in and buying theirs is admitting defeat in a way. But since they canceled the Ultra program and the 3.6 V6 isn't as good as BMW's turbo-6, I am fine with them putting BMW engines in a Cadillac. I am for any plan that makes Cadillacs better. I am sure on BMW's end they'll mark the price up for their engines, so I wonder if that will make it more expensive for GM to buy BMW's engine rather than use their own. BMW could end up making $500 worth of profit on every Cadillac sold, which isn't a bad deal for them. The BMW TT V8 makes more hp and torque than the Escalade's 6.2 liter, there could be a fuel efficiency gain there, and set the Escalade apart from the Yukon Denali more. CTS would really benefit, from the V8. They say the new 550i with that engine (and 8-speed transmission) will be nearly as fast as the current M5. There are a lot of interesting applications, including BMW's diesel engines. The engine I'd love to see come here is the 4.4 liter diesel from the 745d, it makes around 330 hp, and over 550 lb-ft and gets 26 mpg, that's probably a highway rating though, but still good for that much power.

I agree that the Park Ave would be better than a front drive Lucerne but I wouldn't buy either. The Chinese STS has a better interior than ours as well. Perhaps labor costs are so low there, that they can spend more on interior materials and other aspects of the car. Even if GM had all megastores that offered all 8 brands in one place, that doesn't help eliminate dated products or overlapping products. They would still have the Aura-G6-Malibu-LaCrosse-Impala all costing about the same problem. Even if they reduce to 3 models each for Buick, Pontiac, Saab, GMC, etc they still have to spread advertising dollars across all those brands. Suppose that Toyota and GM plan to spend the same amount on advertising in a given year. Toyota and Chevy wold probably get 66%, leaving 34% for the other brands. Scion could get 14% while GMC (#2 volume GM brand) gets 14%. That leaves 20% for Lexus, and 20% for Buick, Pontiac, Cadillac, Hummer and Saab combined. GM has to do something, the solution is not outspend Toyota, because Toyota has more money than them.

I don't want GM to close, I want them to be around for more than 20 years. Over the last 20 years with the rebadge strategy they lost 15% market share. Another 20 years of the same strategy will lead to declining sales and profits. I agree the brands lack focus, but there isn't enough money to make unique products for them all, so we get similar cars like the Malibu and Aura or 4 Lambdas. Most of the brands have a star product, but they have a greater number of dated or non-focused ones. Pontiac for example has the Solstice and G8, 2 good cars. But countered by the G5, G6, Torrent which are rebages, sold to fleets, dated, etc. And it was even worse when they had the Montana and Grand Prix. Using Cadillac as an Example, CTS and Escalade are winners, STS and XLR are dated, DTS doesn't match there luxury-performance alternative to the Germans theme. To fix every brand will take money they don't have. I'd rather see them make 4-5 great brands, well focused with every car being like the Malibu or CTS, none like the old Grand Prix or Ion, than to have 8 brands with half their product being mediocre at best.

I was aware of the G500 at the time I made that post, but it isn't something that commonly sits on M-B lots because of it's $89,000 base price. It's more of an old school Range Rover style vehicle than a military Hummer. The point is, putting an H3 or really dated Saab in the Cadillac showroom doesn't help Cadillac. Lexus and BMW often have stand alone dealerships and portray the upscale image.

The Lucerne is not a good product. It has a chassis and transmission from a 1995 Aurora (and it's 2008) and the 95 Aurora had a DOHC V8 vs a pushrod V6. I have a 2001 Aurora 4.0 (all options), when I sat in the Lucerne CXS at the auto show I couldn't help but to laugh how bad it is, poorly laid out interior, dash from an Impala, fake wood, cheap plastic on the doors, yuck. Which brings me to my "why Oldsmobile buyers left GM" theory. An Olds in 2001 was better than the crap Buick and Pontiac made in 2004-2006. I would be downgrading if I bought anything with a Pontiac or Buick badge on it. Olds owners looking for an upgrade went to Acura, Volvo, Lexus, etc. The H2's gas mileage isn't listed by the EPA due to GVWR, the H3 gets 15 mpg with the 5 cylinder (14 with the V8). The 382 hp Toyota Sequoia also gets 15 mpg but it does 0-60 in 6.2 seconds. A better comparison is the FJ Cruiser, that's a V6 similar size to an H3 and gets 17 mpg. I in my life will never buy a Toyota truck, but they don't suck more gas than a Hummer. It isn't even about gas mileage as much as it is about image. Hummer gives GM a bad image. Cadillac sales were down for 2007, and are down so far for 2008. I know it is a bad market, but the CTS alone can't make a brand. BMW and Mercedes each sell over 1 million cars a year, Cadillac less than 250,000. I know it not a totally fair comparison because BMW/Mercs have lower priced cars in Europe and are used as taxis or cop cars in Germany, but Cadillac has limo/hearse fleet sales here too. The Germans have more diverse product offerings and update engines and platforms frequently, if Cadillac is going to compete they have to do the same.

The Asians don't need to reduce divisions because over the past 10 (or 20 or 30) years Toyota, Nissan and Honda have all seen sales growth, and all 3 are currently very profitable. Toyota's 2006 (their fiscal year doesn't match the calendar) profit alone is enough to buy about 90% of GM stock. Ford, GM and Chrysler all lose money, Ford lost billions in 2006, 2007 will in 2008 and hopes to turn profit in 2009. So while they lose $10-15 billion in cash, Toyota will make $50 billion in cash, that is a net difference of $60-65 billion. Imagine the advertising and vehicle development that can happen with $60 billion dollars. I agree Saab is selling 10 year old junk, but why are they? Why isn't every Saab model updated on a new chassis with a new engine every 6 years? Answer is, no money to do it. Too many brands, too many models. GM can't updated every Buick, Pontiac, Chevy, Saab, etc and make each model all new every 6 years like other brands can do.

I tend to think GM can downsize and reorganize on their own terms, and hope for future growth, or they can continue on their current path and let Toyota downsize them. GM had 40% market share in 1990, they added Saab, Saturn and Hummer, killed Olds and now they have 24% market share. Toyota and Honda are just eating away at GM's market share. What's wrong with the 3-series and 5-series, they sell here, and around the world. BMW sold 1.2 million cars last year, and sales increased from prior years, they also turn a profit. The Tacoma is advertised a fair amount, the Loch Ness monster ad, the video game ad, and the giant dinosaur/car earing robot ad. In 2000 when Toyota made the Prius, GM said hybrids are money losers and bad business decision and made the Hummer H2. Toyota's image soared while GM got the image of a company that makes big gas guzzlers that pollute the Earth. Personally I wouldn't buy a Toyota, I don't think they drive well, but their public image is high so people will buy them without thinking about it.

That still leaves them with a lot of dealerships. The 2 Hummer dealerships hear are in steel and glass buildings with a giant H built into the front of the building. How are they going to sell a Cadillac there? How come when you go to a Mercedes or Lexus dealership, there isn't an army looking vehicle with an all plastic interior and Pontiac Aztec vents sitting next to the S-class. I'd rather see Cadillac dealers as stand alone, and offer more prestigious products. Putting Hummer and Saab next to them drags down their image.