Euclid
05-09-2005, 04:26 PM
Buick or Pontiac?
The death watch has officially begun for GM's Pontiac and Buick lines with GM management openly hinting that the feeding tube might be removed sometime very soon.
Both brands are in deep trouble. Pontiac has been in an ugly and very public tailspin since the disastrous launch of the Aztek three years ago, a misbegotten machine that replaced Yugo as the punch line of jokes about bad cars. Then there was the '02 buildup to the launch of the new GTO, a reborn muscle car that was supposed to resuscitate Pontiacs standing as GM's "excitement" division. It belly-flopped, despite more horsepower under the hood than any of the wildly successful GTOs of the 1960s and early 1970s. The rumor mill has it if the GTO doesn't show signs of life soon, '06 may be the final year for the "reborn classic." 2006 may also herald the beginning of the end for Pontiac itself, which GM Vice Chairman Bob Lutz recently described as "damaged" at an analysts conference in March.
Buick is in equally bad shape but for different reasons. Here the problem is not weak sales; in fact, mainstays such as the LeSabre and Century have moved in volumes comparable to the sales figures of best-selling SUVs. The problem is these cars are also mainstays of nursing homes and rental fleets around the country. Despite the efforts of pitchman Tiger Woods, the age of the average Buick buyer is closer to the age of Tiger's grandfather. This is a major problem for Buick, since its core buyers won't be around to buy Buicks in 10 years or so. New models like the LaCrosse sedan have been aggressively targeted at under-AARP prospects but so far without great success. What former GM executive Semon "Bunkie" Knudsen said in the 1960s, "You can sell an old man a young man's car, but you can't sell a young man an old man's car," is just as true today as it was 40 years ago.
Fundamentally, GM's dilemma is that it has six full-line divisions vying for an ever-diminishing share of the market among themselves, before even getting to outside competitors such as Toyota, Honda and the rest. It may have made sense back in the late 1960s when Chevrolet alone had better than 25 percent of the entire North American new car market. But today, when all of GM's lines put together don't control as much of the market as Chevy did by itself circa 1970, the continued existence of all these different brands is harder to make a case for.
GM would be in much better shape today had it reorganized itself in the late 1970s when it "corporatized" its engineering departments. After 1981, for example, Pontiac no longer designed and built its own engines, which were completely different from those used in Chevrolets. Instead, all GM cars began using "corporate" (mostly Chevy-built) engines and transmissions produced by GM Powertrain. Divisions like Pontiac and Buick, which had for decades been allowed to operate as semi-independent automobile companies with their own distinct product lines, became, for all practical purposes, marketing arms for generic "GM" vehicles that were fundamentally identical save for minor trim and cosmetic differences.
Oldsmobile, a venerable nameplate that was once one of the strongest brands on the market, became a shell with no real reason for being. Interest faded, and sales dropped. The same sclerosis is now overtaking Pontiac and Buick, which each have pitiful 1.8 and 2.8 percent shares of the new car market, respectively. GM gave Oldsmobile the needle when sales dipped to a dismal 1.7 percent in 2004.
How far off can the end be?
At this point, barring a very unlikely miracle, the only real question is which of the two nameplates will take the dirt bath first. Industry insiders have their money on Buick, which faces an enormous challenge overcoming the oldster image it's acquired. That and the fact that the marketplace may be just too crowded to keep Buick going as anything other than a charity case seem to make it all a foregone conclusion.
But Pontiac probably won't be far behind.
:cry:
The death watch has officially begun for GM's Pontiac and Buick lines with GM management openly hinting that the feeding tube might be removed sometime very soon.
Both brands are in deep trouble. Pontiac has been in an ugly and very public tailspin since the disastrous launch of the Aztek three years ago, a misbegotten machine that replaced Yugo as the punch line of jokes about bad cars. Then there was the '02 buildup to the launch of the new GTO, a reborn muscle car that was supposed to resuscitate Pontiacs standing as GM's "excitement" division. It belly-flopped, despite more horsepower under the hood than any of the wildly successful GTOs of the 1960s and early 1970s. The rumor mill has it if the GTO doesn't show signs of life soon, '06 may be the final year for the "reborn classic." 2006 may also herald the beginning of the end for Pontiac itself, which GM Vice Chairman Bob Lutz recently described as "damaged" at an analysts conference in March.
Buick is in equally bad shape but for different reasons. Here the problem is not weak sales; in fact, mainstays such as the LeSabre and Century have moved in volumes comparable to the sales figures of best-selling SUVs. The problem is these cars are also mainstays of nursing homes and rental fleets around the country. Despite the efforts of pitchman Tiger Woods, the age of the average Buick buyer is closer to the age of Tiger's grandfather. This is a major problem for Buick, since its core buyers won't be around to buy Buicks in 10 years or so. New models like the LaCrosse sedan have been aggressively targeted at under-AARP prospects but so far without great success. What former GM executive Semon "Bunkie" Knudsen said in the 1960s, "You can sell an old man a young man's car, but you can't sell a young man an old man's car," is just as true today as it was 40 years ago.
Fundamentally, GM's dilemma is that it has six full-line divisions vying for an ever-diminishing share of the market among themselves, before even getting to outside competitors such as Toyota, Honda and the rest. It may have made sense back in the late 1960s when Chevrolet alone had better than 25 percent of the entire North American new car market. But today, when all of GM's lines put together don't control as much of the market as Chevy did by itself circa 1970, the continued existence of all these different brands is harder to make a case for.
GM would be in much better shape today had it reorganized itself in the late 1970s when it "corporatized" its engineering departments. After 1981, for example, Pontiac no longer designed and built its own engines, which were completely different from those used in Chevrolets. Instead, all GM cars began using "corporate" (mostly Chevy-built) engines and transmissions produced by GM Powertrain. Divisions like Pontiac and Buick, which had for decades been allowed to operate as semi-independent automobile companies with their own distinct product lines, became, for all practical purposes, marketing arms for generic "GM" vehicles that were fundamentally identical save for minor trim and cosmetic differences.
Oldsmobile, a venerable nameplate that was once one of the strongest brands on the market, became a shell with no real reason for being. Interest faded, and sales dropped. The same sclerosis is now overtaking Pontiac and Buick, which each have pitiful 1.8 and 2.8 percent shares of the new car market, respectively. GM gave Oldsmobile the needle when sales dipped to a dismal 1.7 percent in 2004.
How far off can the end be?
At this point, barring a very unlikely miracle, the only real question is which of the two nameplates will take the dirt bath first. Industry insiders have their money on Buick, which faces an enormous challenge overcoming the oldster image it's acquired. That and the fact that the marketplace may be just too crowded to keep Buick going as anything other than a charity case seem to make it all a foregone conclusion.
But Pontiac probably won't be far behind.
:cry: