XtremeGrandAm
05-19-2005, 08:19 AM
Heres the article from detroit news. Seems like GM has finally figured out that you cant just offer every brand a full line of vehicles expecially when they are all basically the same.
Only two of General Motors Corp.'s eight brands -- Chevrolet and Cadillac -- will remain full-line marques while the others will offer more limited product lines under a new strategy aimed at building sales, cutting costs and bolstering brand identity.
The move marks a shift away from GM's long-held philosophy that nearly every brand should offer a full array of cars, trucks and minivans, said Mark LaNeve, GM North America vice president of vehicle sales, service and marketing.
The automaker's goal is to clearly differentiate each of its brands and phase out cars and trucks that don't fit in with a brand or are too similar to other vehicles in GM's lineup.
"People say we have too many brands," LaNeve said in a recent interview. "We have too many brands if we try to do the same things with all the brands."
GM is revamping its sales and marketing strategy in an effort to reverse sliding sales and U.S. market share.
Analyst Jim Sanfilippo of AMCI Inc. in Bloomfield Hills said he believes the changes are necessary and could pay off for GM.
"It's like (GM Chairman and CEO) Rick Wagoner and LaNeve putting bricks and mortar back together while they're under fire," Sanfilippo said.
LaNeve said mass-market Chevrolet and premium Cadillac will be the two bookend brands, with each offering a broad product lineup.
In between, Buick, Pontiac, GMC, Saturn, Hummer and Saab will exist as "focus brands" with more limited portfolios.
That means, for example, GM could eliminate either the Buick Terraza or Pontiac Montana SV6 minivan -- which are similar to other GM minivans -- to concentrate on the brands' bread-and-butter vehicles.
Pontiac, GM's performance division, is dropping the Bonneville full-size car at the end of this model year and may see its product line further truncated.
GM is repositioning Saturn as a more upscale brand below Buick, leaving behind its past as a purveyor of plastic-clad compact cars.
"We've made this clear to the dealers," LaNeve said. "Chevy's got to compete heads-up with Ford and Toyota and all the mainstream parts of the market, and Cadillac needs to have everything it can to compete with BMW, Mercedes and Lexus. The other brands need to be tightly focused."
A key part of the strategy has been the ongoing transformation of Pontiac, Buick and GMC into a single sales channel where all three brands are sold at the same dealership. GM says the three brands complement each other and give customers myriad options.
About half of the GM dealers selling the three brands already have reconfigured their stores to sell all three, LaNeve said.
The effect, said David Cole, chairman of the Center for Automotive Research, is downsizing without eliminating brands as some analysts have predicted.
"What they're really doing is taking their divisions and shrinking their number in a de facto way," Cole said.
LaNeve said GM is also backing off big cash rebates that have helped elevate sales in recent years but undermined long-term brand equity.
The mantra now is "value" or "transaction pricing," where vehicles are priced closer to what consumers actually pay for the vehicle. That doesn't mean GM will abandon promotional deals that allow consumers to terminate leases early if they acquire another new GM model, or its current "Hot Button" contest in which GM is giving away 1,000 vehicles.
"We're going to be trying to hit much more compelling price points," LaNeve said. "We're clearly not going to go to the market as the incentive leader."
That sounds like a smart move to Detroit Cadillac dealer Doug Dalgleish Jr., who says "we need to try value pricing. We'll add more value to the vehicles."
Incentives such as cash rebates will be offered a more brand-by-brand and regional basis rather than sweeping one-size-fits-all programs.
A former collegiate middle linebacker, LaNeve has become a combination cheerleader and coach in urging GM's marketing team to come up with "big plays."
He recently bestowed the first "big play" football on Mark-Hans Richer, the Pontiac marketing director who came up with the idea of landing the Pontiac Solstice as the subject of a task on the reality show "The Apprentice."
"All of GM is being asked to think out of the box," Richer said.
Over the past month, LaNeve and Wagoner have met with about 2,500 dealers to discuss the new strategy.
"LaNeve is giving the dealers a clearer picture, telling them 'we know where we are, we know what we're doing and we know what to do,'" Sanfilippo said.
Dealers are weary and wary of the almost daily headlines detailing GM's financial challenges and speculation the company may be forced to drop an additional brand following the elimination of Oldsmobile.
GM lost $1.1 billion in the first quarter and has withdrawn earnings guidance for the rest of 2005.
Rochester Hills Pontiac-Buick dealer Russ Shelton said the combination of the new strategies and the arrival later this year of such products as the Pontiac Torrent SUV, the two-seat convertible Solstice and the Buick Lucerne signal that GM is in better shape than headlines indicate.
"It tells me I still sell the right franchises and the future is very bright for us," Shelton said.
By combining Pontiac, Buick and GMC into one channel, "we're hoping we'll have you as a customer for life," Shelton said.
The game plan is good news for members of Shelton's sales force who are fatigued with all of the bad news and are anxious to sell the new products.
"GM's made some positive moves," said Sue Farrell of Rochester Hills, who has sold cars at Shelton for eight years. "They're really working to redesign the vehicles and offering fresh products. I'm very optimistic."
Salesman Adam DeJans says some customers are sensing GM is on the ropes, and using that to their advantage.
"They're thinking: If GM wants to stay in business, they better cut me a deal," he said.
Springfield, Mo., dealer Lynn Thompson is being patient with LaNeve and the company. "It's sort of like a giant ship on the Mississippi River," he said. "You just can't turn it around. I know GM has to pull up its bootstraps."
Even as GM's U.S. market share languishes at historic lows, there is hope in the showrooms that upcoming products will pull the automaker out of its swoon.
"They've faced dilemmas like this in the past," said Ed Springs, sales manager at Suburban Cadillac-Buick-Hummer in Troy. "They're strong and they'll find a way."
Only two of General Motors Corp.'s eight brands -- Chevrolet and Cadillac -- will remain full-line marques while the others will offer more limited product lines under a new strategy aimed at building sales, cutting costs and bolstering brand identity.
The move marks a shift away from GM's long-held philosophy that nearly every brand should offer a full array of cars, trucks and minivans, said Mark LaNeve, GM North America vice president of vehicle sales, service and marketing.
The automaker's goal is to clearly differentiate each of its brands and phase out cars and trucks that don't fit in with a brand or are too similar to other vehicles in GM's lineup.
"People say we have too many brands," LaNeve said in a recent interview. "We have too many brands if we try to do the same things with all the brands."
GM is revamping its sales and marketing strategy in an effort to reverse sliding sales and U.S. market share.
Analyst Jim Sanfilippo of AMCI Inc. in Bloomfield Hills said he believes the changes are necessary and could pay off for GM.
"It's like (GM Chairman and CEO) Rick Wagoner and LaNeve putting bricks and mortar back together while they're under fire," Sanfilippo said.
LaNeve said mass-market Chevrolet and premium Cadillac will be the two bookend brands, with each offering a broad product lineup.
In between, Buick, Pontiac, GMC, Saturn, Hummer and Saab will exist as "focus brands" with more limited portfolios.
That means, for example, GM could eliminate either the Buick Terraza or Pontiac Montana SV6 minivan -- which are similar to other GM minivans -- to concentrate on the brands' bread-and-butter vehicles.
Pontiac, GM's performance division, is dropping the Bonneville full-size car at the end of this model year and may see its product line further truncated.
GM is repositioning Saturn as a more upscale brand below Buick, leaving behind its past as a purveyor of plastic-clad compact cars.
"We've made this clear to the dealers," LaNeve said. "Chevy's got to compete heads-up with Ford and Toyota and all the mainstream parts of the market, and Cadillac needs to have everything it can to compete with BMW, Mercedes and Lexus. The other brands need to be tightly focused."
A key part of the strategy has been the ongoing transformation of Pontiac, Buick and GMC into a single sales channel where all three brands are sold at the same dealership. GM says the three brands complement each other and give customers myriad options.
About half of the GM dealers selling the three brands already have reconfigured their stores to sell all three, LaNeve said.
The effect, said David Cole, chairman of the Center for Automotive Research, is downsizing without eliminating brands as some analysts have predicted.
"What they're really doing is taking their divisions and shrinking their number in a de facto way," Cole said.
LaNeve said GM is also backing off big cash rebates that have helped elevate sales in recent years but undermined long-term brand equity.
The mantra now is "value" or "transaction pricing," where vehicles are priced closer to what consumers actually pay for the vehicle. That doesn't mean GM will abandon promotional deals that allow consumers to terminate leases early if they acquire another new GM model, or its current "Hot Button" contest in which GM is giving away 1,000 vehicles.
"We're going to be trying to hit much more compelling price points," LaNeve said. "We're clearly not going to go to the market as the incentive leader."
That sounds like a smart move to Detroit Cadillac dealer Doug Dalgleish Jr., who says "we need to try value pricing. We'll add more value to the vehicles."
Incentives such as cash rebates will be offered a more brand-by-brand and regional basis rather than sweeping one-size-fits-all programs.
A former collegiate middle linebacker, LaNeve has become a combination cheerleader and coach in urging GM's marketing team to come up with "big plays."
He recently bestowed the first "big play" football on Mark-Hans Richer, the Pontiac marketing director who came up with the idea of landing the Pontiac Solstice as the subject of a task on the reality show "The Apprentice."
"All of GM is being asked to think out of the box," Richer said.
Over the past month, LaNeve and Wagoner have met with about 2,500 dealers to discuss the new strategy.
"LaNeve is giving the dealers a clearer picture, telling them 'we know where we are, we know what we're doing and we know what to do,'" Sanfilippo said.
Dealers are weary and wary of the almost daily headlines detailing GM's financial challenges and speculation the company may be forced to drop an additional brand following the elimination of Oldsmobile.
GM lost $1.1 billion in the first quarter and has withdrawn earnings guidance for the rest of 2005.
Rochester Hills Pontiac-Buick dealer Russ Shelton said the combination of the new strategies and the arrival later this year of such products as the Pontiac Torrent SUV, the two-seat convertible Solstice and the Buick Lucerne signal that GM is in better shape than headlines indicate.
"It tells me I still sell the right franchises and the future is very bright for us," Shelton said.
By combining Pontiac, Buick and GMC into one channel, "we're hoping we'll have you as a customer for life," Shelton said.
The game plan is good news for members of Shelton's sales force who are fatigued with all of the bad news and are anxious to sell the new products.
"GM's made some positive moves," said Sue Farrell of Rochester Hills, who has sold cars at Shelton for eight years. "They're really working to redesign the vehicles and offering fresh products. I'm very optimistic."
Salesman Adam DeJans says some customers are sensing GM is on the ropes, and using that to their advantage.
"They're thinking: If GM wants to stay in business, they better cut me a deal," he said.
Springfield, Mo., dealer Lynn Thompson is being patient with LaNeve and the company. "It's sort of like a giant ship on the Mississippi River," he said. "You just can't turn it around. I know GM has to pull up its bootstraps."
Even as GM's U.S. market share languishes at historic lows, there is hope in the showrooms that upcoming products will pull the automaker out of its swoon.
"They've faced dilemmas like this in the past," said Ed Springs, sales manager at Suburban Cadillac-Buick-Hummer in Troy. "They're strong and they'll find a way."