Thursday, February 19, 2009

How many auto brands do you need?

Now, most of us recognise, buy and have affinity with some brands. They are crafted to appeal to specific factors (e.g. demographic, attitudinal, aspirational, etc.). We're probably all aware to some extent that a lot of brands out there are owned by the same parent company. In fact in some markets these brands even compete for your attention and £'s.

Some examples:

  1. Banking: NatWest & RBS:
    Different banks, different branches, one owner (RBS)
  2. Auto insurance: Direct Line, Churchill, Privilege:
    Differently targetted customers, different pricing and one owner (RBS again)
  3. Car manufacturers: Fiat, Alpha Romeo, Ferrari
    Different products, different country prominence and one owner (Fiat)
Note: Apparently you can still buy a new Alpha in the UK!

But what happens when you start cutting back your brands?.... What impact does that have? Well this is now happening in the USA with General Motors, who have announced in their 'viability plans' for long-term success to the US Government, these include:
  • No longer making any new Saturn cars from 2011
  • 'Considering the options' for Pontiac (e.g. cutting models and/or merging with another division of GM)
This is already in addition to its efforts to try and sell SAAB and Hummer (Which incidentally doesn't seem to have done so well recently. Isn't it suprising that in a time when fuel costs have shot up and there is a general acceptance that the 'War On Terror' may have been a bit of a rouse...that nobody wants to buy a huge gas-guzzling military-styles vehicle right now?). Expect GM execs to decide whether to turn of Hummer's life support machine by the end of March 2009.

So... what does it mean when large car companies start killing off their auto brands?

Well.... not a lot perhaps. From what I understand about the Saturn brand, its not the most highly regarded automobile in the USA. It was originally developed in response to the encroaching Japanese offering and seen as a 'new approach'. Now they make also-ran SUV's and Euro-shelled eastern copies, so that obviously worked well . A look at their web presence will tell you how much they like their customers:

In Europe (and especially the UK) we've steadily killed off a lot of auto brands, such as:

  • Ghia - was once an Italian design studio and sports car maker, now its used as a trim specification on the occasional Ford saloon or MPV.
  • Triumph - once split from the motocycle division in the mid-1900's, they made cars of diminishing quality until its demise at the hands of British Leyland, created in 1969 and once the 5th largest car maker in the World.
  • Rover - once the maker of decent and fast saloon cars (especially if you ever got chased by one of these 'jam sandwiches' as a younger driver ), now the company is 'resting' in the drawer of an Indian accountant somewhere.

So what's the moral of this story?

Well, as the British motor industry has proved, you don't need many auto brands. But then, we don't really have a British car industry any more. Could GM be heading in the same direction?

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