A Follow Up to the 9 Detroit Auto Brands We’d Miss the Least
On December 3rd of 2008, we published an article entitled “9 Detroit Auto Brands We’d Miss the Least” encouraging the Detroit automakers to slim down and get rid of some of their brands. The argument was, that just like Aron Ralston cutting off his own arm to survive, the major US car manufacturers needed to take drastic action and cut off some major portions of their business in order to keep the business alive as a whole.
Almost 7 months later, we’re back with a follow-up to see which of our original 9 brands survived and which ones went the way of Oldsmobile and Geo. Check it:
1. Opel & 2. Vauxhall: SOLD & SOLD
In my original post, I said that Opel is like the Chevy of Europe… huge, with a massive place in the mindshare of the European people. But the big cashmoneys that GM could get from an Opel/Vauxhall sale would be too good to pass up, since it’d give them some much needed breathing room to focus on the more profitable US brands.
A few months after the post, on May 30th, 2009, GM announced it’s deal to sell New GM Europe (Opel and Vauxhall, but not Saab) to a holding company led by the Canadian company Magna International. However, GM has a 35% minority stake in that holding company, so they’re not completely out of the Euromarket.
3. Buick: KEPT
When I wrote the original post, I was focusing on GM’s positions in the United States. That parameter, combined with the fact that Buick is one of the best selling brands in China, led me to conclude that GM would be best served by selling off Buick to a Chinese automaker like Shanghai Automotive Industry Corp, then re-investing that money in profitable brands in the US.
Despite the fact that Buick accounts for less than 5% of all GM’s sales, they’ve decided to hold on to the brand, a decision most likely impacted by the huge interest in China. See how pretty the Riviera looks in Chinatalk…
4. Pontiac: GONE
Pontiac is a painful subject for most auto enthusiasts. I really wanted it to work out, really; but I knew it couldn’t. Like when your really cool girlfriend gets too fat. GM even did some studies and tried to work out a way to keep Pontiac by cutting down the number of models to 4 or so, and then focusing on the youth sector of the market. However, on April 27, 2009, they decided to just scrap the brand as a whole… and presumably bury the body in the NJ pinelands somewhere.
However, in an interesting turn of events, in May of 2009, a Michigan Pontiac dealer named Jim Waldron announced that he was interested in buying up the Pontiac brand, logos, and some of the soon-to-be closed GM plants in order to build cars. Plus he said he found financing via some private investors. Initially, GM said that, unlike Saturn, the brand wasn’t for sale. But that statement was made before the official GM bankruptcy. As of mid June, Waldron indicated that he’s currently in talks with GM about buying the brand. We’ll see what happens.
5. Hummer: GONE/SOLD?
This one was fairly obvious to most of the spectators of the automotive world. It was also one of the first brands GM openly talked about getting rid of. On top of the shitty image that the Hummer brand developed among eco-freaks and tree-sexers, the brand was only responsible for 1.5% of all GM sales. It was sort of a no-brainer to lose this one.
Instead of just discontinuing the brand like they originally planned, GM is apparently trying to sell it off to the Chinese company Sichuan Tengzhong Heavy Industrial Machinery. If the deal goes through, Tengzhong will supposedly keep Hummer based in the US, which is an important thing to remember. Unfortunately for both parties, it looks like the almighty Chinese government is attempting to block the deal under the pretense of an “environmental objection”. The word coming out of China is that the government parasites are blocking the deal because “Hummer is at odds with China’s attempts to decrease pollution” and because “Tengzhong lacks the expertise to produce cars”. Now, why do they care if the company pollutes if it’ll still be based in the US? You can be certain the official reason is not the real reason and that there are some political machinations going on underneath this weirdo business deal.
It’s a scary world we’re living in when politicians dictate financial deals that should be made on the free market, where the people would decide the merits of the business, instead of a few parasitic politicians looking for the most profitable course of action for themselves and their government. Anyway.
6. Saab: SOLD
Another apparent no-brainier and an even more irrelevant brand than Hummer from GM’s point of view. Saab was GM’s single worst selling brand, accounting for less than 1% of all the company’s sales. They were one of the first on GM’s get-gone list. Saab is, however, one of those “big in Europe” brands, and the company has had some of the most intense interest from outside investors.
Twenty-seven different parties were reportedly interested in buying the company, including BMW, Renault, Hyundai, Renco Group, Tata Motors, Koenigsegg, Geely Automotive, Fiat, Merbanco (a group of Wyoming-based private investors), and Magna International (the same company that bought Opel and Vauxhall). It looks like they’re the belle of the ball.
The future of Saab was up in the air for a while, but as of June 16th, 2009, it looks like supercar manufacturer Koenigsegg will be acquiring it, with the help of some Norwegian investors. Interesting, to say the least… I mean, why would a small supercar manufacturer want Saab? (Leave your speculation in the comment section.)
7. GMC: KEPT
Given that GMC is GM’s second best seller, this one may have been a hasty addition to my original list. However, hindsight is always 20/20, and even GM considered getting rid of the GMC brand for while. As of April 16 of this year, there were rumors that GM was going to dump the brand along with Pontiac and even Buick. So far, these have turned out to be nothing but rumors, and GMC still has a place in the GM lineup. It stands to reason that if they were going to drop this brand, they would have gone public with that information by now. So it seems like GMC is in the clear.
8. Mercury: KEPT
Moving on to Ford: This one is a goddamn mind-boggler. Mercury is probably the least valuable, most redundantly pointless brand on this list… and yet they survive. How?
Instead of Mercury just continuing to be a bizzaro version of the Ford lineup, Ford’s new plan is to phase out the larger Mercury models in favor of Lincoln ones. The Milan will supposedly be the largest Mercury in the new scheme. The brand will then focus on being almost like the Lincoln of small cars, offering “upscale” versions of the smaller Ford models that don’t fit into the Lincoln lineup. Sort of like a buffer between Ford and Lincoln, keeping the Lincoln brand from moving downmarket. It actually sounds like a valid business plan and might turn Mercury into a useful marque. Good luck with that, Ford.
9. Volvo: ???
Ford has been toying with the idea of selling Volvo for a long time now. Just recently, a Chinese newspaper reported that China based Geely Automotive has signed a letter of intent to purchase Volvo from Ford. Both Ford and Volvo denied it, and that particular newspaper was the only source, meaning it’s highly unlikely. Still, we know Ford’s been looking, and if anyone has the money, the Chinese automakers do.
So out of our original list of 9 proposed brands, five are gone from Detroit’s grasp, three are saved, and one is a possible either way. Fairly accurate, I’d say. GM also sold Saturn to Penske Automotive Group and decided to focus on just four brands: Chevy, Buick, Cadilliac, and GMC. Ford is still considering it’s options. By the end of 2010, when all these decisions are finalized, we’ll hopefully see a leaner and more productive Detroit.