GM's brand strategy right on the money

David Kiley, senior Detroit correspondent for Businessweek magazine.

TEXT OF COMMENTARY

Kai Ryssdal: GM's decision to pull Pontiac off the market that was confirmed today still leaves 'em plenty of models to sell. Even if it shuts down or sells off Saturn, Saab and Hummer, GM is going to have four brands and 34 different models. Still, some analysts think GM should streamline even more. Commentator David Kiley gets where they're coming from. But he says dumping Pontiac goes far enough.


DAVID KILEY: In the parlance of corporate restructuring, GM is aiming to get "lean and mean." Assuming it stays in business, these cutbacks would leave the company with Chevrolet, Cadillac, Buick and GMC trucks.

But is four brands still too many? After all, GM's fiercest competitor, Toyota, does better with just three brands now.

So, no surprise some are questioning whether GM has cut enough. Does it really need Buick and GMC? Who's really buying these brands anyway?

Don't ask me why, but Buick is big in China. It's like how Jerry Lewis is huge in France. No one knows why. It just is. And the theory goes that if GM kills Buick in the U.S., the Chinese will want it less. And China figures big in GM's future.

GMC is another story. New ads for GMC are pitching the brand -- and I'm not kidding here -- as "the unofficial truck of America's infrastructure rebuilding." I used to work in the ad business. I never thought I would see the word infrastructure in TV ad copy.

Since GMC trucks and SUVs are really just Chevrolets with different paint colors and the GMC logo, what's the point? But so help me, there are a couple of hundred thousand consumers a year who, if you took GMC away, would not buy the same truck with the Chevy nameplate. They'd go to Ford, Dodge or Toyota.

So, the four-brand strategy at GM seems right to me. The important thing is this: These four parasite brands GM is cutting only hold about 3 percent of the market, but they're finally leaving the host body.

What GM has been trying to do for too long is spread its limited marketing and management attention across too many brands. It's been the equivalent of trying to stretch rations for four people to feed eight in a lifeboat. The result is malnourishment, sickness and eventual death for all. In other words, what you have at GM right now.

Ryssdal: David Kiley is the senior Detroit correspondent for Businessweek magazine.

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