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Automobile brands set to disappear forever?

Posted Dec 5th 2008 11:30AM by Brian WhiteBrian White RSS Feed
Filed under: Industry, Ford Motor (F), General Motors (GM)

Now that the big three CEOs are sealing up their second week on Capitol Hill trying to convince U.S. lawmakers that their companies collectively need tens of billions to survive, what do they plan on doing internally? As in, what changes could be made to the product lines of all three automakers to fit a changed marketplace and a consumer and business populace that has hit the reset switch on what they want out of an automobile? How about jettisoning some brands that aren't core assets? That's the ticket -- or at least a big part of it.

Just which brands are at serious risk of going away? Brands from all three domestic automakers have been bandied about this week, and with 112 models offered from 15 brands just from the three domestic automakers, the industry clearly needs some fat trimmed. The three U.S. automakers now have only a 47% market share in the U.S., down from 62% just five years ago. Just imagine the design, engineering and support a complex product portfolio like that requires in terms of investment. Is that sustainable? Apparently not, and the big three are fighting for their lives in part because of it.

Right off the bat is General Motors Corp.'s (NYSE: GM) Hummer brand. The king of masculine brands has shriveled into virtual nothingness over the past year as consumers stayed away due to higher gas prices, which have now fallen heavily back down. Still, the damage to Hummer is most likely irreversible, and it will be one of GM's first brands to go away. Ford Motor Corp.'s (NYSE: F) luxury Volvo brand is also a prime contender. Volvo sales have fallen 28% this year as customers flock to lower-priced vehicles while tightening those wallets and purse strings.

GM may also be taking a hard look at its European Saab brand, as well as its domestic Pontiac and Saturn brands. Saturn was a great idea 15 years ago, but not any longer. It was never marketed as a GM product, something that has come back to hurt it a bit due to its drag on GM's bottom line.


How about Pontiac? The sports-oriented brand in many ways is a clone of Chevy vehicles, but with different skins. Still, the ax could fall on it, just as GM rid itself of the Oldsmobile brand years ago (a brand the world has not missed at all). Both brands ended up being perceived as niche-y, and an automobile "for every purse and purpose" just won't cut it in 2009 going forward. Sorry, Alfred Sloan.

Ford may even consider getting rid of its Mercury brand as well, and would just then have the Ford and Lincoln brands under its domestic belt. Chrysler may even jettison every brand except its own namesake brand and Jeep (would we really miss Dodge?). In these harsh economic times, anything will go -- and you can bet that some brands we've all come to know will be vanishing forever very soon.

Tags: Buikc, Chrysler, Ford Motor, FordMotor, General Motors, GeneralMotors, Hummer, Oldsmobile, Pontiac, Saab

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Last updated: November 25, 2009: 03:13 PM

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