Friday, May 1, 2009

Why abandon the Pontiac brand?

April 27 2009, GM announced that it will phase out the Pontiac brand as part of a restructuring effort to reduce costs. Is this decision wise? Consider this.

Pontiac is a grand and old brand to which millions of people were and are still loyal. Introduced in 1906 by Pontiac Spring & Wagon Works, it derives its name from the famous Native American Chief Pontiac (Obwandiyag, 1712-1769) who led a rebellion against British occupation of the Great Lakes (1763-1766).

Over the years many distinguished cars have appeared. Amongst other the Star Chief with its rounded shapes (1955), the Bonneville with its rear fins (1959), the famous Firebird (1967) introduced to compete with the Ford Mustang, the GTO (1969), the Gran Am (1973), the Trans Am (1985) descendant of the Firebird, and the two-seater Fiero Coupe (1985), to mention but these few.

I understand the necessity for GM to cut its costs; its survival is at stake. However, I believe that the same savings could be achieved while keeping the Pontiac brand whose value is not only sentimental and cultural, but economical; in fact, if GM abandons it, I would not be at all surprised to see investors propose to buy it.

Pontiac’s problem originates from the duplication of several models with the Chevrolet brand; this leads to excess costs as much for manufacturing than for marketing. Those costs could easily be reduced by eliminated Pontiac models for which a corresponding Chevrolet model already exists; doing so would reduce manufacturing costs. In addition, sales of Chevrolet and Pontiac product lines, now complementary, could be grouped under one banner, thus reducing marketing costs.

Obviously, Pontiac and Chevrolet models will need to be adapted to present economic and environmental requirements, and of course to customer expectations.

Are you a Pontiac fan? If so, I would really like to read your comments on the subject.

No comments: