Brutal Decade Closes for Auto Brands that Took a Beating

January 2, 2010/Steve Tackett

MOTOR MATTERS FREEWHEELING BY BILL VISNIC

The end of 2009 brings to end a tough decade for automotive brands — and ’09 was particularly brutal.
Auto brands are not easy to establish and once the investment is made, they’re even more difficult to kill. Earlier in the decade, it was a big deal when Chrysler dropped the axe on its rather history-rich Plymouth brand (2001). General Motors laid to rest its 107-year-old Oldsmobile division in 2004 after a wrenching and costly four-year process. But as 2009 wound down, the auto industry prepared for an unprecedented number of brand executions, most notably from GM.
No less than four GM brands were slated for sale or outright termination in 2009: Hummer, Pontiac, Saturn and the Saab European-vehicle division. What happened that GM needed to suddenly offload so much baggage? Changing times and faulty management.
— With Detroit’s automakers making criminal profits from Sport Utility Vehicles, Hummer seemed like such a good idea when GM bought the right to market and sell Hummer from military contractor AM General in late 1999.
Television images of Middle East military operations fueled the mystique. Wily accountants soon found a Pentagon-sized tax loophole that had well-heeled clients driving the 10-mpg behemoths all but free. But evolving consumer environmentalism and a couple of summers of high gasoline prices quickly grenaded Hummer’s paramilitary-hip image. GM now is scrambling to salvage something from the investment by offloading Hummer on a Chinese tractor maker.
— Saturn, which GM already has written into the history books, may be the most lamentable casualty of the brand purge of 2009. Started by GM in 1985 as the “anti-GM” division that was going to focus on no-haggle pricing and customer relations, the import-fighting Saturn concept was a good one.
Soon enough, however, GM management found a way to water it all down and Saturn became just another marketing-driven GM division that wasn’t really offering its customers anything different anymore. Despite building a wide base of loyal fans, it really was all over for Saturn by the early part of the decade.
— Pontiac: GM’s celebrated “performance division hasn’t been selling true performance cars for decades.

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It was selling minivans and plastic surgery-enhanced versions of economy cars and family sedans. Pontiac’s NASCAR demographic couldn’t keep the division viable in the face of affordable European and Japanese models that also do the performance thing with a lot more refinement.
— With Saab, GM tried for 10 years to take a company that sold a small number of interesting cars and turn it into a company that sold a big number of not-so interesting cars knocked off of other GM models.
Saab’s cadre of loyal customers knew what was going on and, over the years, more and more walked away as GM mindlessly cast off all the Swedish-design and engineering cache that created Saab’s unique persona. The Saab adventure is another example of GM trying to use marketing rather than genuine engineering to differentiate between its many brands.
Don’t think this brand-cutting business is over, though. In 2010, you may see other nameplates fall or at least change hands.
Ford, for one, which already dumped the Jaguar and Land Rover brands to India’s Tata Motors, was at the end of 2009 prepping its Volvo Cars unit for a sale to a Chinese automaker. And sooner or later, Ford has some hard thinking to do about its fading Mercury division. — Bill Visnic, Motor Matters

Copyright, Motor Matters, 2010

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