Buick & Pontiac & GMC as One **Strategy closer to plan completion (page 1)**
05-12-2004, 04:00 AM
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Buick & Pontiac & GMC as One **Strategy closer to plan completion (page 1)**
GM team delivers pizazz into Buick, Pontiac marketing
Ad stars sharpen image of brands
By Ed Garsten / The Detroit News
DETROIT — Coming to the small screen in June is a big-budget, full-length movie starring Dennis Hopper ... and a passel of Pontiac GTOs.
So much for traditional 30-second or one-minute commercials to sell cars and trucks.
The GTO’s star turn in the film “The Last Ride” is part of a three-month-old effort by General Motors Corp. to rev up marketing at its Pontiac, Buick and GMC brands.
A new team led by advertising wunderkind C.J. Fraleigh is looking to cut through the clutter and highlight vehicle attributes such as power, performance and amenities.
“The marketing will be sharper — some advertising messages will change,” Fraleigh said.
Fraleigh, 40, made his name by helping GM turn around its once-inert Cadillac division. A combination of edgy new products and the use of music by hard rockers Led Zeppelin in commercials has helped convert Cadillac’s image from has-been to hip.
On Feb. 1, Fraleigh moved to Buick and Pontiac-GMC as the division’s general manager. He was joined by Jim Bunnell, 48, a former Pontiac executive who spent the last half decade running GM’s Northeast region.
While GMC’s lineup of pickup trucks and sport utility vehicles is delivering sales and profits, Pontiac remains a work in progress. GM is repositioning the brand to focus on its performance image.
“A couple of times in our history we fell off that path,” Bunnell said. “We’re taking Pontiac back to its roots, its true performance, not only straight line acceleration but great handling and a true driver’s environment.”
Pontiac’s advertising tag line “Fuel for the Soul” will be retained for now, but Fraleigh and Bunnell are looking to bring home the brand’s performance image in a bigger way, hence the made-for-television movie “The Last Ride.”
The movie debuts in June on USA Network and features several generations of the iconic muscle car.
Pontiac vehicles are also getting exposure on several cable television networks through the end of the month on what is essentially a 30-minute long commercial titled “Secrets of the Stuntmen.”
The long-form commercial takes viewers behind the scenes as four Hollywood stuntmen plan and execute a two-minute chase scene featuring the Pontiac Vibe GT, GTO, Grand Prix GTP Comp-G and Bonneville GXP.
“We’re looking for different avenues for showcasing our products other than the 30-second TV spot,” Bunnell said.
Using movies to target a specific type of consumer can actually be more cost-effective than short commercials on network television, said Jim Sanfilippo, an analyst with automotive marketing consultants AMCI Inc. in Warren.
“Network cost increases are allowing marketers to consider other ways to reach their targets,” Sanfilippo said. “Putting GTO in a car chase is a great idea for that car — there’s nobody that’s not going to want to see that car demonstrated.”
Positive buzz over the G6, which replaces the Grand Am this fall, and the 2006 Solstice, a two-seat convertible, has put Pontiac on an upward trajectory.
Sales are up 13.3 percent this year on strong demand for the Grand Am, Grand Prix and Vibe.
Buick is another story. Sales are off 4.8 percent this year. The recasting of the brand as an American luxury marque on a par with Toyota’s Lexus marque begins in earnest with the upcoming LaCrosse, which replaces the Century and Regal.
“(Buick) takes things one step further,” Fraleigh said. “One step further and one step better. How we’re going to bring that to life hasn’t been decided.”
There will not be any direct comparisons with Lexus or any other competitive brands in Buick advertising, Fraleigh said. Instead, ads will focus on “quietness and premium of ride.”
“Buick is trying to get slightly younger but trying to move slightly more upscale,” said Jeff Brodoski, an analyst with J.D. Power and Associates.
“But you have to be very calculated, and Buick has to take time and investment to do it and not just try to throw a brand new Buick at everybody right away.”
Buick is spending $3.2 billion to revamp its product line, which is likely to include some version of the Velite four-seat convertible concept car and its first minivan — the 2005 Buick Terraza.
The one brand under Fraleigh and Bunnell’s umbrella that is relatively trouble-free is GMC.
Five years ago the brand sold less than 400,000 units annually, but Bunnell predicts GMC will sell more than 600,000 pickups and SUVs this year on the strength of the two attributes they hope to attain with Pontiac and Buick: solid product and a clear definition of them in the marketplace.
“We’re there with GMC,” said Fraleigh, “and we’re getting closer with Pontiac and Buick.”
You can reach Ed Garsten at (313) 223-3217 or egarsten@detnews.com
Pics at:
http://www.detnews.com/2004/autosins...c01-150572.htm
Ad stars sharpen image of brands
By Ed Garsten / The Detroit News
DETROIT — Coming to the small screen in June is a big-budget, full-length movie starring Dennis Hopper ... and a passel of Pontiac GTOs.
So much for traditional 30-second or one-minute commercials to sell cars and trucks.
The GTO’s star turn in the film “The Last Ride” is part of a three-month-old effort by General Motors Corp. to rev up marketing at its Pontiac, Buick and GMC brands.
A new team led by advertising wunderkind C.J. Fraleigh is looking to cut through the clutter and highlight vehicle attributes such as power, performance and amenities.
“The marketing will be sharper — some advertising messages will change,” Fraleigh said.
Fraleigh, 40, made his name by helping GM turn around its once-inert Cadillac division. A combination of edgy new products and the use of music by hard rockers Led Zeppelin in commercials has helped convert Cadillac’s image from has-been to hip.
On Feb. 1, Fraleigh moved to Buick and Pontiac-GMC as the division’s general manager. He was joined by Jim Bunnell, 48, a former Pontiac executive who spent the last half decade running GM’s Northeast region.
While GMC’s lineup of pickup trucks and sport utility vehicles is delivering sales and profits, Pontiac remains a work in progress. GM is repositioning the brand to focus on its performance image.
“A couple of times in our history we fell off that path,” Bunnell said. “We’re taking Pontiac back to its roots, its true performance, not only straight line acceleration but great handling and a true driver’s environment.”
Pontiac’s advertising tag line “Fuel for the Soul” will be retained for now, but Fraleigh and Bunnell are looking to bring home the brand’s performance image in a bigger way, hence the made-for-television movie “The Last Ride.”
The movie debuts in June on USA Network and features several generations of the iconic muscle car.
Pontiac vehicles are also getting exposure on several cable television networks through the end of the month on what is essentially a 30-minute long commercial titled “Secrets of the Stuntmen.”
The long-form commercial takes viewers behind the scenes as four Hollywood stuntmen plan and execute a two-minute chase scene featuring the Pontiac Vibe GT, GTO, Grand Prix GTP Comp-G and Bonneville GXP.
“We’re looking for different avenues for showcasing our products other than the 30-second TV spot,” Bunnell said.
Using movies to target a specific type of consumer can actually be more cost-effective than short commercials on network television, said Jim Sanfilippo, an analyst with automotive marketing consultants AMCI Inc. in Warren.
“Network cost increases are allowing marketers to consider other ways to reach their targets,” Sanfilippo said. “Putting GTO in a car chase is a great idea for that car — there’s nobody that’s not going to want to see that car demonstrated.”
Positive buzz over the G6, which replaces the Grand Am this fall, and the 2006 Solstice, a two-seat convertible, has put Pontiac on an upward trajectory.
Sales are up 13.3 percent this year on strong demand for the Grand Am, Grand Prix and Vibe.
Buick is another story. Sales are off 4.8 percent this year. The recasting of the brand as an American luxury marque on a par with Toyota’s Lexus marque begins in earnest with the upcoming LaCrosse, which replaces the Century and Regal.
“(Buick) takes things one step further,” Fraleigh said. “One step further and one step better. How we’re going to bring that to life hasn’t been decided.”
There will not be any direct comparisons with Lexus or any other competitive brands in Buick advertising, Fraleigh said. Instead, ads will focus on “quietness and premium of ride.”
“Buick is trying to get slightly younger but trying to move slightly more upscale,” said Jeff Brodoski, an analyst with J.D. Power and Associates.
“But you have to be very calculated, and Buick has to take time and investment to do it and not just try to throw a brand new Buick at everybody right away.”
Buick is spending $3.2 billion to revamp its product line, which is likely to include some version of the Velite four-seat convertible concept car and its first minivan — the 2005 Buick Terraza.
The one brand under Fraleigh and Bunnell’s umbrella that is relatively trouble-free is GMC.
Five years ago the brand sold less than 400,000 units annually, but Bunnell predicts GMC will sell more than 600,000 pickups and SUVs this year on the strength of the two attributes they hope to attain with Pontiac and Buick: solid product and a clear definition of them in the marketplace.
“We’re there with GMC,” said Fraleigh, “and we’re getting closer with Pontiac and Buick.”
You can reach Ed Garsten at (313) 223-3217 or egarsten@detnews.com
Pics at:
http://www.detnews.com/2004/autosins...c01-150572.htm
05-13-2004, 10:13 AM
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The Lacrosse is ugly. The terracross is a huge mistake; the Rendevous needs revision... the Terracross is a HUGE mistake. The Rainier is just okay. The only REAL car that will cast Buick in a new light is the Velite, and that car is a few years off. I love Buick to death, but if they want to do better, they'd better tighten up.
05-14-2004, 08:19 AM
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If Buick brought back something like the 87 Regal GN that would be a big boost. Maybe Buick can get their own version of the GTO and turn it into a modern Regal GN. But that is probably wishful thinking.....
05-20-2005, 04:42 PM
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GM Shifts Strategy for Brands **LaNeve: "Strong brands win; weak brands lose" (p1)**
GM Shifts Strategy for Brands
The Detroit News
By Ed Garsten
The Detroit News
By Ed Garsten
May 19, 2005
Only two of General Motors Corp.'s eight brands -- Chevrolet and Cadillac -- will remain full-line marques while the others will offer more limited product lines under a new strategy aimed at building sales, cutting costs and bolstering brand identity.
The move marks a shift away from GM's long-held philosophy that nearly every brand should offer a full array of cars, trucks and minivans, said Mark LaNeve, GM North America vice president of vehicle sales, service and marketing.
The automaker's goal is to clearly differentiate each of its brands and phase out cars and trucks that don't fit in with a brand or are too similar to other vehicles in GM's lineup.
"People say we have too many brands," LaNeve said in a recent interview. "We have too many brands if we try to do the same things with all the brands."
GM is revamping its sales and marketing strategy in an effort to reverse sliding sales and U.S. market share.
Analyst Jim Sanfilippo of AMCI Inc. in Bloomfield Hills said he believes the changes are necessary and could pay off for GM.
"It's like (GM Chairman and CEO) Rick Wagoner and LaNeve putting bricks and mortar back together while they're under fire," Sanfilippo said.
LaNeve said mass-market Chevrolet and premium Cadillac will be the two bookend brands, with each offering a broad product lineup.
In between, Buick, Pontiac, GMC, Saturn, Hummer and Saab will exist as "focus brands" with more limited portfolios.
That means, for example, GM could eliminate either the Buick Terraza or Pontiac Montana SV6 minivan -- which are similar to other GM minivans -- to concentrate on the brands' bread-and-butter vehicles.
Pontiac, GM's performance division, is dropping the Bonneville full-size car at the end of this model year and may see its product line further truncated.
GM is repositioning Saturn as a more upscale brand below Buick, leaving behind its past as a purveyor of plastic-clad compact cars.
"We've made this clear to the dealers," LaNeve said. "Chevy's got to compete heads-up with Ford and Toyota and all the mainstream parts of the market, and Cadillac needs to have everything it can to compete with BMW, Mercedes and Lexus. The other brands need to be tightly focused."
A key part of the strategy has been the ongoing transformation of Pontiac, Buick and GMC into a single sales channel where all three brands are sold at the same dealership. GM says the three brands complement each other and give customers myriad options.
About half of the GM dealers selling the three brands already have reconfigured their stores to sell all three, LaNeve said.
The effect, said David Cole, chairman of the Center for Automotive Research, is downsizing without eliminating brands as some analysts have predicted.
"What they're really doing is taking their divisions and shrinking their number in a de facto way," Cole said.
LaNeve said GM is also backing off big cash rebates that have helped elevate sales in recent years but undermined long-term brand equity.
The mantra now is "value" or "transaction pricing," where vehicles are priced closer to what consumers actually pay for the vehicle. That doesn't mean GM will abandon promotional deals that allow consumers to terminate leases early if they acquire another new GM model, or its current "Hot Button" contest in which GM is giving away 1,000 vehicles.
"We're going to be trying to hit much more compelling price points," LaNeve said. "We're clearly not going to go to the market as the incentive leader."
That sounds like a smart move to Detroit Cadillac dealer Doug Dalgleish Jr., who says "we need to try value pricing. We'll add more value to the vehicles."
Incentives such as cash rebates will be offered a more brand-by-brand and regional basis rather than sweeping one-size-fits-all programs.
A former collegiate middle linebacker, LaNeve has become a combination cheerleader and coach in urging GM's marketing team to come up with "big plays."
He recently bestowed the first "big play" football on Mark-Hans Richer, the Pontiac marketing director who came up with the idea of landing the Pontiac Solstice as the subject of a task on the reality show "The Apprentice."
"All of GM is being asked to think out of the box," Richer said.
Over the past month, LaNeve and Wagoner have met with about 2,500 dealers to discuss the new strategy.
"LaNeve is giving the dealers a clearer picture, telling them 'we know where we are, we know what we're doing and we know what to do,'" Sanfilippo said.
Dealers are weary and wary of the almost daily headlines detailing GM's financial challenges and speculation the company may be forced to drop an additional brand following the elimination of Oldsmobile.
GM lost $1.1 billion in the first quarter and has withdrawn earnings guidance for the rest of 2005.
Rochester Hills Pontiac-Buick dealer Russ Shelton said the combination of the new strategies and the arrival later this year of such products as the Pontiac Torrent SUV, the two-seat convertible Solstice and the Buick Lucerne signal that GM is in better shape than headlines indicate.
"It tells me I still sell the right franchises and the future is very bright for us," Shelton said.
By combining Pontiac, Buick and GMC into one channel, "we're hoping we'll have you as a customer for life," Shelton said.
The game plan is good news for members of Shelton's sales force who are fatigued with all of the bad news and are anxious to sell the new products.
"GM's made some positive moves," said Sue Farrell of Rochester Hills, who has sold cars at Shelton for eight years. "They're really working to redesign the vehicles and offering fresh products. I'm very optimistic."
Salesman Adam DeJans says some customers are sensing GM is on the ropes, and using that to their advantage.
"They're thinking: If GM wants to stay in business, they better cut me a deal," he said.
Springfield , Mo. , dealer Lynn Thompson is being patient with LaNeve and the company. "It's sort of like a giant ship on the Mississippi River," he said. "You just can't turn it around. I know GM has to pull up its bootstraps."
Even as GM's U.S. market share languishes at historic lows, there is hope in the showrooms that upcoming products will pull the automaker out of its swoon.
"They've faced dilemmas like this in the past," said Ed Springs, sales manager at Suburban Cadillac-Buick-Hummer in Troy. "They're strong and they'll find a way."
Only two of General Motors Corp.'s eight brands -- Chevrolet and Cadillac -- will remain full-line marques while the others will offer more limited product lines under a new strategy aimed at building sales, cutting costs and bolstering brand identity.
The move marks a shift away from GM's long-held philosophy that nearly every brand should offer a full array of cars, trucks and minivans, said Mark LaNeve, GM North America vice president of vehicle sales, service and marketing.
The automaker's goal is to clearly differentiate each of its brands and phase out cars and trucks that don't fit in with a brand or are too similar to other vehicles in GM's lineup.
"People say we have too many brands," LaNeve said in a recent interview. "We have too many brands if we try to do the same things with all the brands."
GM is revamping its sales and marketing strategy in an effort to reverse sliding sales and U.S. market share.
Analyst Jim Sanfilippo of AMCI Inc. in Bloomfield Hills said he believes the changes are necessary and could pay off for GM.
"It's like (GM Chairman and CEO) Rick Wagoner and LaNeve putting bricks and mortar back together while they're under fire," Sanfilippo said.
LaNeve said mass-market Chevrolet and premium Cadillac will be the two bookend brands, with each offering a broad product lineup.
In between, Buick, Pontiac, GMC, Saturn, Hummer and Saab will exist as "focus brands" with more limited portfolios.
That means, for example, GM could eliminate either the Buick Terraza or Pontiac Montana SV6 minivan -- which are similar to other GM minivans -- to concentrate on the brands' bread-and-butter vehicles.
Pontiac, GM's performance division, is dropping the Bonneville full-size car at the end of this model year and may see its product line further truncated.
GM is repositioning Saturn as a more upscale brand below Buick, leaving behind its past as a purveyor of plastic-clad compact cars.
"We've made this clear to the dealers," LaNeve said. "Chevy's got to compete heads-up with Ford and Toyota and all the mainstream parts of the market, and Cadillac needs to have everything it can to compete with BMW, Mercedes and Lexus. The other brands need to be tightly focused."
A key part of the strategy has been the ongoing transformation of Pontiac, Buick and GMC into a single sales channel where all three brands are sold at the same dealership. GM says the three brands complement each other and give customers myriad options.
About half of the GM dealers selling the three brands already have reconfigured their stores to sell all three, LaNeve said.
The effect, said David Cole, chairman of the Center for Automotive Research, is downsizing without eliminating brands as some analysts have predicted.
"What they're really doing is taking their divisions and shrinking their number in a de facto way," Cole said.
LaNeve said GM is also backing off big cash rebates that have helped elevate sales in recent years but undermined long-term brand equity.
The mantra now is "value" or "transaction pricing," where vehicles are priced closer to what consumers actually pay for the vehicle. That doesn't mean GM will abandon promotional deals that allow consumers to terminate leases early if they acquire another new GM model, or its current "Hot Button" contest in which GM is giving away 1,000 vehicles.
"We're going to be trying to hit much more compelling price points," LaNeve said. "We're clearly not going to go to the market as the incentive leader."
That sounds like a smart move to Detroit Cadillac dealer Doug Dalgleish Jr., who says "we need to try value pricing. We'll add more value to the vehicles."
Incentives such as cash rebates will be offered a more brand-by-brand and regional basis rather than sweeping one-size-fits-all programs.
A former collegiate middle linebacker, LaNeve has become a combination cheerleader and coach in urging GM's marketing team to come up with "big plays."
He recently bestowed the first "big play" football on Mark-Hans Richer, the Pontiac marketing director who came up with the idea of landing the Pontiac Solstice as the subject of a task on the reality show "The Apprentice."
"All of GM is being asked to think out of the box," Richer said.
Over the past month, LaNeve and Wagoner have met with about 2,500 dealers to discuss the new strategy.
"LaNeve is giving the dealers a clearer picture, telling them 'we know where we are, we know what we're doing and we know what to do,'" Sanfilippo said.
Dealers are weary and wary of the almost daily headlines detailing GM's financial challenges and speculation the company may be forced to drop an additional brand following the elimination of Oldsmobile.
GM lost $1.1 billion in the first quarter and has withdrawn earnings guidance for the rest of 2005.
Rochester Hills Pontiac-Buick dealer Russ Shelton said the combination of the new strategies and the arrival later this year of such products as the Pontiac Torrent SUV, the two-seat convertible Solstice and the Buick Lucerne signal that GM is in better shape than headlines indicate.
"It tells me I still sell the right franchises and the future is very bright for us," Shelton said.
By combining Pontiac, Buick and GMC into one channel, "we're hoping we'll have you as a customer for life," Shelton said.
The game plan is good news for members of Shelton's sales force who are fatigued with all of the bad news and are anxious to sell the new products.
"GM's made some positive moves," said Sue Farrell of Rochester Hills, who has sold cars at Shelton for eight years. "They're really working to redesign the vehicles and offering fresh products. I'm very optimistic."
Salesman Adam DeJans says some customers are sensing GM is on the ropes, and using that to their advantage.
"They're thinking: If GM wants to stay in business, they better cut me a deal," he said.
Springfield , Mo. , dealer Lynn Thompson is being patient with LaNeve and the company. "It's sort of like a giant ship on the Mississippi River," he said. "You just can't turn it around. I know GM has to pull up its bootstraps."
Even as GM's U.S. market share languishes at historic lows, there is hope in the showrooms that upcoming products will pull the automaker out of its swoon.
"They've faced dilemmas like this in the past," said Ed Springs, sales manager at Suburban Cadillac-Buick-Hummer in Troy. "They're strong and they'll find a way."
05-20-2005, 09:24 PM
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Instead of thinking "out of the box", can't they just think inside the box and build cars that people like instead of "settle for"?
Like honda's Ridgeline...you could say it's "Out of the box", but it's not...it's a damn truck. It may have "out of the box" design, but it's still a truck and they built it hoping people will like it.
On the contrary, GM builds a POS car and hopes marketing can influence people to "like it" or by playing "brand strategy" games or offering mad incentives.
If I liked a car, damn the incentives, I'm going to buy it. If I don't like the car, you would almost have to give it away for me to buy it.
Like honda's Ridgeline...you could say it's "Out of the box", but it's not...it's a damn truck. It may have "out of the box" design, but it's still a truck and they built it hoping people will like it.
On the contrary, GM builds a POS car and hopes marketing can influence people to "like it" or by playing "brand strategy" games or offering mad incentives.
If I liked a car, damn the incentives, I'm going to buy it. If I don't like the car, you would almost have to give it away for me to buy it.
Last edited by mrdeeno; 05-20-2005 at 09:27 PM.
05-21-2005, 10:21 AM
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"People say we have too many brands," LaNeve said in a recent interview. "We have too many brands if we try to do the same things with all the brands."
This will make a huge difference, starting 5 years from now, in my opinion.
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05-21-2005, 10:33 AM
#9
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Originally Posted by gavriil
Exactly! At last a smart significant strategic move.
This will make a huge difference, starting 5 years from now, in my opinion.
This will make a huge difference, starting 5 years from now, in my opinion.
i agree it is a smart move (about time) but i doubt it will make a huge difference. unless they drastically improve their interior quality. dont tell me they already have because their so-called all new g6 dash is crap.
05-21-2005, 10:35 AM
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Originally Posted by mrdeeno
Instead of thinking "out of the box", can't they just think inside the box and build cars that people like instead of "settle for"?
Like honda's Ridgeline...you could say it's "Out of the box", but it's not...it's a damn truck. It may have "out of the box" design, but it's still a truck and they built it hoping people will like it.
On the contrary, GM builds a POS car and hopes marketing can influence people to "like it" or by playing "brand strategy" games or offering mad incentives.
If I liked a car, damn the incentives, I'm going to buy it. If I don't like the car, you would almost have to give it away for me to buy it.
Like honda's Ridgeline...you could say it's "Out of the box", but it's not...it's a damn truck. It may have "out of the box" design, but it's still a truck and they built it hoping people will like it.
On the contrary, GM builds a POS car and hopes marketing can influence people to "like it" or by playing "brand strategy" games or offering mad incentives.
If I liked a car, damn the incentives, I'm going to buy it. If I don't like the car, you would almost have to give it away for me to buy it.
05-21-2005, 10:47 AM
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Originally Posted by mrdeeno
Instead of thinking "out of the box", can't they just think inside the box and build cars that people like instead of "settle for"?
Like honda's Ridgeline...you could say it's "Out of the box", but it's not...it's a damn truck. It may have "out of the box" design, but it's still a truck and they built it hoping people will like it.
On the contrary, GM builds a POS car and hopes marketing can influence people to "like it" or by playing "brand strategy" games or offering mad incentives.
If I liked a car, damn the incentives, I'm going to buy it. If I don't like the car, you would almost have to give it away for me to buy it.
Like honda's Ridgeline...you could say it's "Out of the box", but it's not...it's a damn truck. It may have "out of the box" design, but it's still a truck and they built it hoping people will like it.
On the contrary, GM builds a POS car and hopes marketing can influence people to "like it" or by playing "brand strategy" games or offering mad incentives.
If I liked a car, damn the incentives, I'm going to buy it. If I don't like the car, you would almost have to give it away for me to buy it.
Right now for example Buick needs to dedicate scarce engineering talent on the...Terraza. That's totally unecessary. Such ill devised tactics take away from the vehicles that Buick should be excelling in. Like the Lucerne or whatever comes next.
The move described in the article will result in a company that's more focused on what each subsidiary should be doing best. And that's one of the major problems within GM currently. Lack of focus on priorities.
05-22-2005, 04:08 PM
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Originally Posted by gavriil
Exactly! At last a smart significant strategic move.
This will make a huge difference, starting 5 years from now, in my opinion.
This will make a huge difference, starting 5 years from now, in my opinion.
05-23-2005, 09:39 AM
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shift away from GM's long-held philosophy
05-23-2005, 10:48 AM
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LaNeve: "Strong brands win; weak brands lose,"
Strong brands win, weak brands to lose product as GM moves to downsize vehicle lineup - - By JASON STEIN | Automotive News - - Source: Autoweek
DETROIT -- Mark LaNeve is offering a wake-up call to General Motors' 300 stand-alone Buick and Pontiac dealerships: GM is downsizing its product lineup.
Buick-Pontiac-GMC dealerships will have a full range of products; stand-alone dealerships will not.
Over the past month, LaNeve, GM North America's vice president of vehicle sales, service and marketing, has explained his plan to nearly 3,000 dealers.
"We're not going to put a bullet to anyone's head saying you have to do this," LaNeve said last week during an interview with Automotive News.
But "we're not designing the portfolio for stand-alone Buick dealers," he said. "You might make it as a stand-alone if you're really good in the right market. But the business opportunity of all three is where you'll really see profits."
As of Jan. 1, Buick had 198 stand-alone dealerships, while Pontiac had 110. There were 168 GMC stand-alone stores. By contrast, there were 784 Buick-Pontiac-GMC stores and 245 Pontiac-GMC stores.
In an interview with Automotive News on March 23, LaNeve enunciated his plan to eliminate product clones. At the time, GM had just issued a downbeat earnings forecast. And during a question-and-answer session at the New York auto show, GM Vice Chairman Robert Lutz had called Pontiac and Buick "damaged brands."
LaNeve subsequently assured dealers that those brands would survive. But GM concluded that it had to accelerate its plans to eliminate product clones.
That plan has been "turbocharged in the last six months -- especially in the last 60 days," LaNeve said.
No clones
In the past, GM gave brands their own versions of the same vehicle -- creating an overlapping product lineup and confusion in the marketplace.
For instance, Buick offers the Terraza minivan, and Pontiac sells the Montana SV6 minivan. Meanwhile, Chevrolet markets the Uplander minivan, and Saturn sells the Relay. Those minivans are built on the same underpinnings.
In the future, LaNeve said, GM might not have minivans for Pontiac and Buick.
Chevrolet and Cadillac dealers expect to benefit from the Darwinian product strategy that is taking shape. Last week in New York, LaNeve outlined GM's plans for Chevrolet and Cadillac.
"Strong brands win; weak brands lose," he said during a speech to the International Motor Press Association. "End of story."
Successful automakers "are anchored by a great volume brand at one end and a great premium brand at the other," LaNeve said. "In our case, (that's) Chevrolet and Cadillac."
LaNeve's comments are borne out by GM's U.S. sales figures for the year to date. Despite GM's 4.9 percent sales decline through April, Cadillac is up 4.0 percent and Chevrolet is up 1.1 percent.
But not everyone agrees with La-Neve's approach. Conrad Darby, owner of Darby Buick in Sarasota, Fla., says, "If GM is adapting a strategy of survival of the fittest, I don't know if that helps dealer morale."
GM's product strategy makes sense to megadealer Jack Fitzgerald, who sells all GM brands except Saturn and Hummer at three of his 12 dealerships in suburban Washington.
"Chevy is doing OK, and Cadillac is doing better," says Fitzgerald, who has sold cars for 50 years.
Chevy, Cadillac prosper
The elimination of GM's product clones is "probably a good strategy," Fitzgerald says. "GM makes too many different cars. You can't stock all of them or focus on all of them. Reducing models will save money."
GM's old strategy of me-too products isn't working anymore for Buick, Pontiac and Saturn. Each reports declining U.S. sales.
Lynn Thompson, co-owner of Thompson Pontiac-GMC-Cadillac-Saab in Springfield, Mo., says his Cadillac and Saab sales are up substantially over last year.
But his Pontiac and Buick franchises are suffering, and his store's overall sales are down 20.0 percent from his original forecast. At a meeting last week of 20 Pontiac dealers from around the country, Thompson learned that other Pontiac dealers are struggling, too.
"Not everyone is making more," says Thompson, who is the former co-chairman of GM's national dealer council. "We get fat and sassy when things get real good. Only when things slow down do we start to pay attention."
Peter Brown, Gail Kachadourian, David Kushma and Jamie LaReau contributed to this report
Buick-Pontiac-GMC dealerships will have a full range of products; stand-alone dealerships will not.
Over the past month, LaNeve, GM North America's vice president of vehicle sales, service and marketing, has explained his plan to nearly 3,000 dealers.
"We're not going to put a bullet to anyone's head saying you have to do this," LaNeve said last week during an interview with Automotive News.
But "we're not designing the portfolio for stand-alone Buick dealers," he said. "You might make it as a stand-alone if you're really good in the right market. But the business opportunity of all three is where you'll really see profits."
As of Jan. 1, Buick had 198 stand-alone dealerships, while Pontiac had 110. There were 168 GMC stand-alone stores. By contrast, there were 784 Buick-Pontiac-GMC stores and 245 Pontiac-GMC stores.
In an interview with Automotive News on March 23, LaNeve enunciated his plan to eliminate product clones. At the time, GM had just issued a downbeat earnings forecast. And during a question-and-answer session at the New York auto show, GM Vice Chairman Robert Lutz had called Pontiac and Buick "damaged brands."
LaNeve subsequently assured dealers that those brands would survive. But GM concluded that it had to accelerate its plans to eliminate product clones.
That plan has been "turbocharged in the last six months -- especially in the last 60 days," LaNeve said.
No clones
In the past, GM gave brands their own versions of the same vehicle -- creating an overlapping product lineup and confusion in the marketplace.
For instance, Buick offers the Terraza minivan, and Pontiac sells the Montana SV6 minivan. Meanwhile, Chevrolet markets the Uplander minivan, and Saturn sells the Relay. Those minivans are built on the same underpinnings.
In the future, LaNeve said, GM might not have minivans for Pontiac and Buick.
Chevrolet and Cadillac dealers expect to benefit from the Darwinian product strategy that is taking shape. Last week in New York, LaNeve outlined GM's plans for Chevrolet and Cadillac.
"Strong brands win; weak brands lose," he said during a speech to the International Motor Press Association. "End of story."
Successful automakers "are anchored by a great volume brand at one end and a great premium brand at the other," LaNeve said. "In our case, (that's) Chevrolet and Cadillac."
LaNeve's comments are borne out by GM's U.S. sales figures for the year to date. Despite GM's 4.9 percent sales decline through April, Cadillac is up 4.0 percent and Chevrolet is up 1.1 percent.
But not everyone agrees with La-Neve's approach. Conrad Darby, owner of Darby Buick in Sarasota, Fla., says, "If GM is adapting a strategy of survival of the fittest, I don't know if that helps dealer morale."
GM's product strategy makes sense to megadealer Jack Fitzgerald, who sells all GM brands except Saturn and Hummer at three of his 12 dealerships in suburban Washington.
"Chevy is doing OK, and Cadillac is doing better," says Fitzgerald, who has sold cars for 50 years.
Chevy, Cadillac prosper
The elimination of GM's product clones is "probably a good strategy," Fitzgerald says. "GM makes too many different cars. You can't stock all of them or focus on all of them. Reducing models will save money."
GM's old strategy of me-too products isn't working anymore for Buick, Pontiac and Saturn. Each reports declining U.S. sales.
Lynn Thompson, co-owner of Thompson Pontiac-GMC-Cadillac-Saab in Springfield, Mo., says his Cadillac and Saab sales are up substantially over last year.
But his Pontiac and Buick franchises are suffering, and his store's overall sales are down 20.0 percent from his original forecast. At a meeting last week of 20 Pontiac dealers from around the country, Thompson learned that other Pontiac dealers are struggling, too.
"Not everyone is making more," says Thompson, who is the former co-chairman of GM's national dealer council. "We get fat and sassy when things get real good. Only when things slow down do we start to pay attention."
Peter Brown, Gail Kachadourian, David Kushma and Jamie LaReau contributed to this report
05-23-2005, 10:53 AM
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But not everyone agrees with La-Neve's approach. Conrad Darby, owner of Darby Buick in Sarasota, Fla., says, "If GM is adapting a strategy of survival of the fittest, I don't know if that helps dealer morale."
That's an example of the backwards ass thinking that's brought GM to its knees.
CUSTOMER MORALE IS WHAT MATTERS! The dealers are not the ones that buy your products.
05-23-2005, 11:41 AM
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^^ Amen. Stetching a brands product line with clones just to have a fuller product line (even if they don't fit the brand's identity) to apease the dealers is crazy. GM needs to do what's best for the brands. That'll eliminate confusion with the consumer and they'll know what they're buying. The right product mix with the right brand will get the comsumers buying agian (hopefully).
05-23-2005, 11:56 AM
#17
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Originally Posted by gavriil
Who gives a rat's ass about dealer morale?
That's an example of the backwards ass thinking that's brought GM to its knees.
CUSTOMER MORALE IS WHAT MATTERS! The dealers are not the ones that buy your products.
That's an example of the backwards ass thinking that's brought GM to its knees.
CUSTOMER MORALE IS WHAT MATTERS! The dealers are not the ones that buy your products.
I've never seen a corporation run by a management so intent on not seeing the big picture. 
Last edited by F23A4; 05-23-2005 at 11:59 AM.
05-23-2005, 04:50 PM
#18
05-23-2005, 06:50 PM
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Struggling GM Rolls Out A New Marketing Strategy
By LEE HAWKINS JR.
Staff Reporter of THE WALL STREET JOURNAL
May 23, 2005; Page B1
VACAVILLE, Calif. -- Tom Shellworth has been selling Chevrolets and other General Motors Corp. vehicles in this San Francisco suburb for 30 years. In that time, he's watched as Asian and European auto makers have taken more than half of the California market from Detroit, and driven GM's market share in the state to just 17%.
Now, as part of a substantial course correction to its U.S. marketing strategy, GM is planning to cut prices, pare down overlapping models and mount a fresh counterattack against foreign brands in rich, populous West and East Coast markets and in fast-growing areas like South Florida.
"They're critical, image-shaping markets," says Mark LaNeve, GM's new head of North American sales, service and marketing. Mr. LaNeve is the point man in GM Chairman and Chief Executive Officer Rick Wagoner's effort to fix GM's money-losing North American auto business.
Among the cars Mr. Wagoner and Mr. LaNeve are counting on to rebuild GM's image is the new Chevy Cobalt compact car, designed to compete against California small-car favorites, Honda Motor Co.'s Civic and Toyota Motor Corp.'s Corolla.
Mr. Shellworth says the Cobalt "is a very nice car." But he's cautious about its prospects. "There are a lot of layers of competition to get through to get to the Cobalt," he says. "And that's the challenge that Chevrolet has in marketing out here. How do you get them into the seat to even drive the car?"
Answering that question will be vital for Mr. Wagoner. Slumping sales of GM's highly profitable large sport-utility vehicles have put GM's North American operations on track for a substantial loss this year. GM this year suspended its earnings guidance. GM's debt was downgraded this month to junk status by Standard & Poor's. That means the 0% financing deals and huge rebates the company relied on to sustain sales following the Sept. 11, 2001, terrorist attacks are increasingly costly.
...
A clear sign of GM's distress is that the company's average revenue per vehicle in the first quarter plunged $688 a vehicle, or nearly 4% compared with the year-earlier quarter. GM's revenue per vehicle in the first quarter was the lowest for the January-March period since 2000. The revenue collapse reflects the slump in sales of high profit SUVs such as the Cadillac Escalade and the Chevrolet Suburban. GM's weak presence in the regions of the country where the economy is robust exacerbates the problem.
To change that, Mr. Wagoner said GM plans to accelerate its plans through increasing "marketing money, diversity messages, integration with the dealer network, you name it," he says. "The answer to fix the problem is not the same in each market."
As part of its new approach, GM will move away from one-size fits all deals like 0% financing, toward what Mr. LaNeve calls the "Total Value Proposition." That means many GM vehicles will have lower base prices than cars they replace, and GM will try to sell them with smaller rebates, he says. In addition, Mr. LaNeve says GM will revamp a complex system for pricing optional features that encouraged dealers to stock high-price, feature-loaded vehicles that tended to sit unsold for months.
"If the sweet spot for a TrailBlazer [SUV] is $31,000, we forced dealers to stock $37,000" vehicles, he says. Earlier this spring, GM dropped the base prices of TrailBlazers and other midsize SUV models to align them more closely with competitors. Mr. LaNeve says GM's midsize utility sales are up 30% in March and April compared with February, before the price cut.
In a second, longer-term move, GM will consolidate the struggling Buick and Pontiac brands, cutting the number of models offered in both. GM also plans to push Pontiac and Buick dealers to consolidate, creating one sales channel where two exist now. In this way, GM could realize many of the savings of closing a brand, without incurring the substantial costs of a full shutdown, including buying out dealers.
Pontiac, Mr. LaNeve says, will focus on vehicles that are sporty and athletic. Buick would offer cars tuned for quiet and quality. GMC would sell trucks as it does now. Meanwhile, GM's Saturn brand will transform from a cuddly marketer of utilitarian vehicles to a much sportier brand selling mainly vehicles designed by GM's European Opel division.
"We can't afford to put 10 products into Buick," Mr. LaNeve said during a meeting with reporters Friday. "We can do three or four really good ones." He won't say what models will go, but he suggests that Buick doesn't need two SUVs, as it has now.
GM has vowed to slash overlapping models before, only to slide back into tactics such as offering four nearly identical minivans in the Chevrolet, Buick, Pontiac and Saturn divisions. "I'm not so sure that was a great decision," Mr. LaNeve says. But he insists GM will execute its new strategy.
Realigning products and divisions could take years. That's why GM is pouring money into efforts to rekindle interest in GM's products now in places like San Francisco, New York and Miami.
Mr. LaNeve says GM plans to increase advertising spending in the coastal, metro markets. He has assigned a member of his staff to live full time in South Florida to drive new initiatives there, aiming at the large Hispanic community. GM is tailoring models and offers to specific markets, offering a Cadillac CTS with special wheels and a sunroof on a $399 a month lease in California. Mr. LaNeve has been flying around the country meeting with dealers and selected news media to talk up GM's prospects.
GM also is betting that large SUV sales will rebound next year when it launches redesigned large SUVs. GM's SUVs are the mainstay of its sales in California.
Mr. Shellworth says the 2000 Tahoe "was a runaway hit." But customers who bought the 2000 models "were ready for another car a year or two ago." A lot of those former Tahoe owners wound up buying upscale import midsize and full-size sport utilities, "because they were newer and fresh."
Another problem for GM in California is that it doesn't have gas-electric hybrid vehicles to compete with the Toyota Prius, Ford Motor Co.'s Escape hybrid SUV or Honda's hybrid Accord sedan. Hybrids have been hot sellers in California where gas prices are high, commutes are long and many consumers are environmentally conscious.
"We're not selling the full hybrids in today's market, and that's just reality," Mr. LaNeve says. "I think we can be successful. Do I wish I had something to sell like that? Sure."
By LEE HAWKINS JR.
Staff Reporter of THE WALL STREET JOURNAL
May 23, 2005; Page B1
VACAVILLE, Calif. -- Tom Shellworth has been selling Chevrolets and other General Motors Corp. vehicles in this San Francisco suburb for 30 years. In that time, he's watched as Asian and European auto makers have taken more than half of the California market from Detroit, and driven GM's market share in the state to just 17%.
Now, as part of a substantial course correction to its U.S. marketing strategy, GM is planning to cut prices, pare down overlapping models and mount a fresh counterattack against foreign brands in rich, populous West and East Coast markets and in fast-growing areas like South Florida.
"They're critical, image-shaping markets," says Mark LaNeve, GM's new head of North American sales, service and marketing. Mr. LaNeve is the point man in GM Chairman and Chief Executive Officer Rick Wagoner's effort to fix GM's money-losing North American auto business.
Among the cars Mr. Wagoner and Mr. LaNeve are counting on to rebuild GM's image is the new Chevy Cobalt compact car, designed to compete against California small-car favorites, Honda Motor Co.'s Civic and Toyota Motor Corp.'s Corolla.
Mr. Shellworth says the Cobalt "is a very nice car." But he's cautious about its prospects. "There are a lot of layers of competition to get through to get to the Cobalt," he says. "And that's the challenge that Chevrolet has in marketing out here. How do you get them into the seat to even drive the car?"
Answering that question will be vital for Mr. Wagoner. Slumping sales of GM's highly profitable large sport-utility vehicles have put GM's North American operations on track for a substantial loss this year. GM this year suspended its earnings guidance. GM's debt was downgraded this month to junk status by Standard & Poor's. That means the 0% financing deals and huge rebates the company relied on to sustain sales following the Sept. 11, 2001, terrorist attacks are increasingly costly.
...
A clear sign of GM's distress is that the company's average revenue per vehicle in the first quarter plunged $688 a vehicle, or nearly 4% compared with the year-earlier quarter. GM's revenue per vehicle in the first quarter was the lowest for the January-March period since 2000. The revenue collapse reflects the slump in sales of high profit SUVs such as the Cadillac Escalade and the Chevrolet Suburban. GM's weak presence in the regions of the country where the economy is robust exacerbates the problem.
To change that, Mr. Wagoner said GM plans to accelerate its plans through increasing "marketing money, diversity messages, integration with the dealer network, you name it," he says. "The answer to fix the problem is not the same in each market."
As part of its new approach, GM will move away from one-size fits all deals like 0% financing, toward what Mr. LaNeve calls the "Total Value Proposition." That means many GM vehicles will have lower base prices than cars they replace, and GM will try to sell them with smaller rebates, he says. In addition, Mr. LaNeve says GM will revamp a complex system for pricing optional features that encouraged dealers to stock high-price, feature-loaded vehicles that tended to sit unsold for months.
"If the sweet spot for a TrailBlazer [SUV] is $31,000, we forced dealers to stock $37,000" vehicles, he says. Earlier this spring, GM dropped the base prices of TrailBlazers and other midsize SUV models to align them more closely with competitors. Mr. LaNeve says GM's midsize utility sales are up 30% in March and April compared with February, before the price cut.
In a second, longer-term move, GM will consolidate the struggling Buick and Pontiac brands, cutting the number of models offered in both. GM also plans to push Pontiac and Buick dealers to consolidate, creating one sales channel where two exist now. In this way, GM could realize many of the savings of closing a brand, without incurring the substantial costs of a full shutdown, including buying out dealers.
Pontiac, Mr. LaNeve says, will focus on vehicles that are sporty and athletic. Buick would offer cars tuned for quiet and quality. GMC would sell trucks as it does now. Meanwhile, GM's Saturn brand will transform from a cuddly marketer of utilitarian vehicles to a much sportier brand selling mainly vehicles designed by GM's European Opel division.
"We can't afford to put 10 products into Buick," Mr. LaNeve said during a meeting with reporters Friday. "We can do three or four really good ones." He won't say what models will go, but he suggests that Buick doesn't need two SUVs, as it has now.
GM has vowed to slash overlapping models before, only to slide back into tactics such as offering four nearly identical minivans in the Chevrolet, Buick, Pontiac and Saturn divisions. "I'm not so sure that was a great decision," Mr. LaNeve says. But he insists GM will execute its new strategy.
Realigning products and divisions could take years. That's why GM is pouring money into efforts to rekindle interest in GM's products now in places like San Francisco, New York and Miami.
Mr. LaNeve says GM plans to increase advertising spending in the coastal, metro markets. He has assigned a member of his staff to live full time in South Florida to drive new initiatives there, aiming at the large Hispanic community. GM is tailoring models and offers to specific markets, offering a Cadillac CTS with special wheels and a sunroof on a $399 a month lease in California. Mr. LaNeve has been flying around the country meeting with dealers and selected news media to talk up GM's prospects.
GM also is betting that large SUV sales will rebound next year when it launches redesigned large SUVs. GM's SUVs are the mainstay of its sales in California.
Mr. Shellworth says the 2000 Tahoe "was a runaway hit." But customers who bought the 2000 models "were ready for another car a year or two ago." A lot of those former Tahoe owners wound up buying upscale import midsize and full-size sport utilities, "because they were newer and fresh."
Another problem for GM in California is that it doesn't have gas-electric hybrid vehicles to compete with the Toyota Prius, Ford Motor Co.'s Escape hybrid SUV or Honda's hybrid Accord sedan. Hybrids have been hot sellers in California where gas prices are high, commutes are long and many consumers are environmentally conscious.
"We're not selling the full hybrids in today's market, and that's just reality," Mr. LaNeve says. "I think we can be successful. Do I wish I had something to sell like that? Sure."
05-25-2005, 10:31 AM
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why doesn't GM just cut Saturn completely?that's what I would have done. that and Hummer since gas prices are crazy and no signs of it going down. plus people won't buy a truck that gets like 12 mpg if gas prices are 2-3 bucks a gallon. 
05-25-2005, 10:44 AM
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Originally Posted by Water-S
why doesn't GM just cut Saturn completely?that's what I would have done. that and Hummer since gas prices are crazy and no signs of it going down. plus people won't buy a truck that gets like 12 mpg if gas prices are 2-3 bucks a gallon.
Cuttin Saturn would be a mistake. The trend now is an increase in the smaller cars, like hatchbacks and small SUVs like the Vue. What you need is to bring Saturn to a more premium position.
04-25-2006, 12:52 PM
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GM says it's making progress in drive to create combined Buick-Pontiac-GMC sales channel - - By RICK KRANZ | AUTOMOTIVE NEWS - - Source: Autoweek
NEW YORK - General Motors is making progress in its effort to eliminate exclusive Buick dealerships and build up a combined Buick-Pontiac-GMC sales channel.
At the end of 2005, 60 percent of Buick's sales were "on channel," said Mark LaNeve, GM's vice president for sales, service and marketing. By that he meant Buick sales at stores that had consolidated Pontiac, Buick and GMC franchises under one roof.
"We think it will be 70 percent by the end of this year and 80 percent at the end of '07," LaNeve said at the New York auto show earlier this month.
He added: "The dealers understand this, and we have been making great progress. Last year we did about 125 consolidation deals."
When needed, GM will continue to stimulate deals with financial help, LaNeve said.
"We get involved in helping facilitate the deals," he said. "We may participate on the margins on them, but the vast majority of these consolidations have been private capital."
LaNeve said GM's goal is to have all Buick, Pontiac and GMC sales flow through one channel.
"We are pushing real hard right now," he said. "(But) once we get past 80 percent, we will ease off some and kind of do them one at a time, as opportunities (arise)."
As of Jan. 1, 1,676 GM dealerships sold vehicles from all three brands - Buick, Pontiac and GMC - up from 1,409 a year earlier.
GM has been realigning its eight brands within four channels. Chevrolet and Saturn will be exclusive sales channels. Cadillac, Hummer and Saab will be sold by one dealer in each area, rather than through separate stores.
At the end of 2005, 60 percent of Buick's sales were "on channel," said Mark LaNeve, GM's vice president for sales, service and marketing. By that he meant Buick sales at stores that had consolidated Pontiac, Buick and GMC franchises under one roof.
"We think it will be 70 percent by the end of this year and 80 percent at the end of '07," LaNeve said at the New York auto show earlier this month.
He added: "The dealers understand this, and we have been making great progress. Last year we did about 125 consolidation deals."
When needed, GM will continue to stimulate deals with financial help, LaNeve said.
"We get involved in helping facilitate the deals," he said. "We may participate on the margins on them, but the vast majority of these consolidations have been private capital."
LaNeve said GM's goal is to have all Buick, Pontiac and GMC sales flow through one channel.
"We are pushing real hard right now," he said. "(But) once we get past 80 percent, we will ease off some and kind of do them one at a time, as opportunities (arise)."
As of Jan. 1, 1,676 GM dealerships sold vehicles from all three brands - Buick, Pontiac and GMC - up from 1,409 a year earlier.
GM has been realigning its eight brands within four channels. Chevrolet and Saturn will be exclusive sales channels. Cadillac, Hummer and Saab will be sold by one dealer in each area, rather than through separate stores.
04-26-2006, 11:06 PM
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Originally Posted by Minch00
Is it just me, or is there absolutley NO NEED for GMC? What do they offer besides clones of every other vehicle in the GM lineup?
The Buick Lucerne is a cheaper version of the Cadillac DTS, but in some ways, it's special. The Pontiac Grand Prix is more compelling than its cousin, the Buick LaCrosse, but the Impala will always sell more anyway.
I didn't really miss Oldsmobile per se, although the last cars they made were nicer than a lot of other GM cars. Buick and Pontiac do have brand images, but not the product to really match.
It's quite possible that the Buick-Pontiac-GMC channel eventually caves in, because GM might starve it for good product.
04-27-2006, 03:27 PM
#27
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Originally Posted by Minch00
Is it just me, or is there absolutley NO NEED for GMC? What do they offer besides clones of every other vehicle in the GM lineup?
Personally, I see no need for Buick AND Pontiac.
If Caddy can offer a CTS-V then I see no need for an "Excitement" division in GM.
04-27-2006, 04:37 PM
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There is room for every current GM division. What's wrong is the respective division's lack of proper product to bolster their respective brand images.
Last edited by titan; 04-27-2006 at 04:40 PM.
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