GM: Better brand focus

January 17, 2010

GM: Better brand focus


Perhaps no display at the Detroit auto show reveals the big brand shakeup the auto industry has endured this past year as much as General Motors’ does.

Gone are the four brands GM is shedding — Hummer, Pontiac, Saturn and Saab.

Now, you can walk around a roomy Chevy space decorated with sky-blue colors or Cadillac’s luxurious display decorated with purple and faux stone. The Buick space is warm with wood tones, while GMC intones an industrial vibe.

Jeff Schuster, J.D. Power and Associates’ executive director of global forecasting, called the Detroit auto show a coming-out of sorts for the new GM and its brands. "I think a couple of things are clear: They are trying to emphasize the individual brands more," Schuster said. "That’s a good sign from a competitive standpoint."

GM contends focusing on the four brands in the U.S. will allow the company to better focus its money and attention than it could when it had eight brands.

"Of all their brands, I think Chevrolet is the one that is really positioned the best," said Erich Merkle, an analyst with "They don’t have to recast the image of Chevrolet."

Industry analyst Jim Hall of 2953 Analytics called time Chevy’s weakness. "They don’t have the product they need like right now," he said. "But the advantage to not having it is the market is still not in really good shape. … The worst thing … is to launch a really good new car in a bad market because you will have to launch it again."

That said, Hall was optimistic about future launches. The upcoming Cruze and Aveo small cars bode well for Chevy, which faces tough competition, especially from Ford. The Volt’s launch late this year also will generate a lot of attention.

However, industry commentator Peter De Lorenzo wrote on his Web site that GM’s marketing needs improvement. "Unless and until they figure out how to break through this perpetual marketing conundrum, they will continue to spin their wheels in this market," he wrote last week.

In an interview with the Free Press, Chevrolet General Manager Jim Campbell said the brand is focusing on five groups: traditional truck buyers, performance enthusiasts, young people, so-called eco-enthusiasts and modern families.

That’s especially important as Chevy, which had comprised about 60% of GM’s U.S. sales, is expected to go to 70% this year. "Chevrolet has a key foundational role in driving the business," Campbell said.

While the brand is seeing success with the Equinox midsize SUV and Camaro coupe, dealers say GM isn’t building them fast enough, an issue that has arisen before.

Buick, meanwhile, faces the challenge of re-establishing an identity. The recently launched Enclave luxury crossover and LaCrosse midsize sedan, as well as the upcoming Regal midsize sedan put the brand in a better position to compete for younger drivers.

"It’s starting to have a better definition," Schuster said of Buick. " … Everything needs to be urgent but it’s really going to be baby steps that are going to get them there."

GMC, meanwhile, unveiled a small concept in Detroit called the Granite that hints at a possible expansion into smaller vehicles.

Brian Sweeney, general manager of Buick-GMC, told the Free Press that he sees opportunity ahead. "We finished December with some good sales momentum. … We want to continue that," he said.

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