Wednesday, February 18, 2009

Bailing out GM

One of GM's problems is too damn many lookalike brands. According to Fox, GM currently makes 64 different brands of cars and light trucks. GM plans to cut the brand count down to 36 over the next four years. What GM has been doing is selling the same car under different brand names. This is counter productive. When you sell the same vehicle under the Chevy and under the Caddy name, buyers get the idea that there is no difference between Caddy and Chevy. Bad idea. Pretty soon they demand Caddies at Chevy prices.
Besides, selling the same car under different names runs up the cost (you have to do the documentation over) and dilutes the advertising. Better to run more ads for the same product than advertise the same car under 4 or 5 different names.
Right now the market supports about 12 different car types, sedans, pickup trucks, SUV's/minivans, and sports cars. Offer each of these in small, medium and big, and you have 12 car types. GM ought to drop all the brands that are just duplicates, and then pick the best selling 12 brands and drop all the rest. It would save money and improve sales. And do it now, not over the next four years. Give the 12 survivor cars some of the good old brand names.

No comments: