Currently reading: Lutz: sub-brands must go
GM vice chairman says streamlining will save car maker

GM vice chairman Bob Lutz has said that selling off sub-brands quickly is the way to push America's biggest car maker back from the brink of bankruptcy.

"Reducing the number of nameplates and putting your marketing money on the product is the way to go," Lutz told Automotive News, in an effort to talk up his floundering firm.

"It's really much better to have fewer brands, do it well and then market the hell out of them."

By streamlining its brands, GM can cut the cost of product development and marketing.

It will also stop sub brands - particularly in the US market - competing with each other and cannibalising sales.

GM has already put Hummer up for sale and the restructuring plan it put to Congress (which was subsequently thrown out) had Saab and Saturn 'under review' too.

"They [Saab and Saturn] are under still strategic review," said Lutz. "We realise they're not working, and something needs to be done."

"Nowadays, there's so much stuff out there and so many brands that nobody can keep track of it anymore," Lutz admitted.

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asciimo 19 December 2008

Re: Lutz: sub-brands must go

I agree with Lutz, but never understood why GM left it so late. Pontiac, Saturn and SAAB could be sold together as entry-level/sporty, upscale/refined and premium/sporty if sold together and it will get rid of the direct overlap of Chevrolet, Buick, and Cadillac respectively in one hit.

The problem with keeping SAAB is that GM has decided that Cadillac should be the brand to compete with BMW. Had GM sold low-volume SAAB off earlier before the financial crisis to say Hyundai, which lacks a premium brand for its flagship products but increasingly has the expertise to build cars at least as sporty as SAAB's unfulfilled promise, then the 3 parties would have a win-win-win situation.

I doubt that they could be sold together now (unless some state-backed company from China decides they need credible brands for later foreign expansion). Should GM return to good health, I hope there's the possibility of Opel being reintroduced to fit in where Saturn (why did GM they bother trying to sell good European products with a cheap tarnished brand) left off and perhaps marketing could use any awards given to Opel to the US market's advantage.

ruggerbugger 18 December 2008

Re: Lutz: sub-brands must go

I think that's the issue- if they had have made a concerted effort rather than "sporadically importing them" then perhaps they could have become a sales success. With proper marketing and continued representation of the brand then it's less likely that they'll be forgotten about.

BigThreeForever 17 December 2008

Re: Lutz: sub-brands must go

The Saturn Astra has flopped totally.

Historically, the European models of Ford and GM have failed when offered in the US market. It's not a new idea, they have been sporadically importing them since the 1970s.