General Motors Will Have Four Brands and Three Sales Channels

The Pontiac Brand Bites The Dust




Pontiac is out. Hummer will be sold soon and Saturn has one year left. These are the drastic measures GM is willing to take to meet the guidelines for their Federal bailout funds.

In a revised viability plan filed with the government today, General Motors said it will market its four core brands through three channels.

GM also has mapped out which dealers are likely to be eliminated in its 163 major U.S. markets, says Troy Clarke, GM's president of North America.

"We have an understanding of how we want each market to look," said Troy Clarke, GM's president of North America. "We will spend the month of May talking to dealers about how we plan to develop the appropriate (dealer) support for each market."

GM said Chevrolet will have its own channel and be GM's foundation brand. Cadillac will be the luxury channel. Buick-GMC will be the third channel and be considered an "upper-premium" brand.

In major markets, Chevrolet and Cadillac will be stand-alone channels, GM said in its government report. Buick-GMC will stand alone or be aligned with Chevrolet or Cadillac with a "separate sales operation depending on market penetration and real estate costs," GM said.

A GM spokesman said that in big markets there might be some superstores consisting of all four brands and that stores could be realigned to carry three brands.

In mid-sized and small-town markets, GM said, "in many cases Chevrolet and Buick-GMC will be aligned with one dealer operator."

GM will "dramatically lower" the number of Cadillac dealerships it has in small markets.

GM announced it plans to reduce its dealership count to 3,605 by the end of next year. GM ended 2008 with 6,246rooftops.

About half of GM's upcoming cuts will be of dealers who have very small volumesand dealers who have other brands and do not get the bulk of their sales from a GM brand, said Mark LaNeve, GM's vice president of vehicles sales, service and marketing, during a press event here.

"I don't want to cut any dealers," LaNeve said. "It's tough stuff. The key to this plan, though, is to have 3,600 really strong dealers."

Chevrolet dealer Larry Dimmitt is one of the dealers in a major market who thinks he'll be OK given GM's sales channel strategy.

"We're going to come out stronger," said Dimmitt, who owns Dimmitt Chevrolet in Clearwater, Fla. "This should have been done years ago. The pace and urgency just wasn't there."

GM's Clarke said that single-line dealers of the brands that GM plans to discontinue likely won't be given new franchises. GM has 35 stand-alone Pontiac stores. Saturn, which GM is hoping to spin off, has 384 dealerships as of April 6.

GM is close to a deal to sell its Hummer brand, CEO Fritz Henderson said today. It is restructuring Saab in an effort to sell it, too.

Source: Automotive News