GM: General Mismanagement

Part of General Motors’ restructuring involved shedding some brands. They got rid of Pontiac, Saab, Saturn and Hummer. They kept Chevy, Buick, GMC, and Cadillac. I think it was a mistake that they kept the Buick brand.

I recently caught an ad for a new Buick.

Note, they compare the car to Lexus, BMW, Audi. If I were to tell you this were a GM ad, you would probably jump to Cadillac once you heard those comparisons. So, it seems they are trying to bring the Buick brand up into the luxury market. Admittedly, this apparently was where Buick was positioned when it first came out. When you made it, you bought a Buick – true excess was left for Cadillac owners.

But that is not the market we live in now. I would suggest even Cadillac has trouble staying in certain consumer’s minds with Lexus Acura and other luxury brands. Certainly Buick won’t fit in there. But GM insists they are both luxury. So, GM will have to price Cadillac in the stratosphere to separate the brands. Which is more than most people would say a Cadillac is worth.

I found this statistic that shows the average age of a Buick buyer is 70. 70! So, what does this tell us? Maybe Buick still is held in high regards with those older generations who remember when it was a luxury brand. However, young people don’t see it anymore. What is going to happen to this brand when the current kids get older? Will they sudden see the light and think to buy a Buick? Frankly, no.

So, basically Buick is doomed. Good move, GM. My solution? GM should have killed off Buick, focused on Cadillac as its sole luxury brand. Then, they should have kept Pontiac, but remade it. GM has trouble with the youth market, as I alluded to above. So make Pontiac the Scion (Toyota’s youth focused brand) of GM. Toyota saw that people were taking its (and competitor’s) cars and then doing a bunch of aftermarket things to them to personalize them. They simply introduced a cheaper brand, and moved the aftermarket to inside the dealer. GM should have made the same move with Pontiac. Make it a youth focused car company, with a lot of options for personalization and a focus on cheap performance. Then, once the kids have been hooked on the GM brand for a few years, they might look to Chevy or Cadillac instead of Honda and BMW.

What I think makes this extra interesting is the collapse of Toyota quality on public display recently. This would be the perfect opportunity for GM to showcase some quality cars. No parent wants to send Tiffany off to college in a corolla with bad brakes. This would be the perfect time for a cool new quality GM. What do you think – will you be buying a Toyota anytime soon? I read that they have been cutting costs to increase profits. I think they are suffering what the American auto makers went through in the 90s, which can be expected when a manufacturer sees extraordinary growth. Now the turnaround happens with an increased focus on quality to bring back the luster to the tarnished brand. I would probably not buy a Toyota today- but in 5 years or so, I can see them being optimal again.