GM’s troubled child

Whatever your opinion on the automotive giant that is General Motors, nobody can deny that the standard and range of vehicles that they currently produce is considerably better than how it was back in 2008…in fact GM’s current product portfolio is arguably one of its strongest ever and many of its brands have been rejuvenated with money and ideas. Cynics will say that the money in question is courtesy of the US taxpayer, but had the company been left to founder then thousands (if not hundreds of thousands) of families worldwide would have been left without an income in a time when the economy was at its gloomiest.

GM’s modest Detroit-HQ

Political arguments aside, GM has clearly realized that they could not keep on producing rubbish, as even though they sold a lot of vehicles they were usually not held in high regard by reviewers or even owners. A key component of making the company more efficient was to trim brands; in the past GM had often relied on merely rebadging models and adding some extra equipment to distinguish between models. The Oldsmobile brand had been cut in 2004, and it was followed by Saturn and Pontiac, Hummer and Saab in 2010; whilst unpopular with fans of the brands, the cars which each brand were producing were (with a few exceptions) duplicated in other divisions. Their closure allowed GM to focus their resources on producing more unique cars which were overall more competitive.

Hummer was one of many brand casualities…unfortunately

The remaining GM brands: Chevrolet, Buick, GMC, Cadillac and Opel/Vauxhall, have now established themselves in a unique part of the market…to a degree anyway. In the US Chevrolet is the volume brand, Buick is entry level luxury, Cadillac luxury and GMC light trucks. To an outsider this seems to work, apart from the fact that all divisions offer some sort of light truck/SUV and so GMC’s existance seems questionable. The most controversial brand however, has been Buick, once the favourite of octogenarians who used their cars to run to the pharmacy and back (at 10 mph under the speed limit), GM utilized this opportunity to offer a much more modern line-up, but with the focus still on comfort rather than pure sport.

The Buick Verano has been met with critical acclaim and is based on the Astra

To do this, GM employed one of their old tricks, and started introducting European Opel/Vauxhall models to the US market with Buick badges. They had tried this with the Saturn brand before its closure, but this time GM made a few changes to accommodate for US tastes and as such the average age of a Buick buyer has gone down from 80-something to just 57 (only 5 years older than the average car buyer full stop). This success has been egged on by the brand’s success in China, where it is one of the leading marques.

However, the one black mark in GM’s new copybook is Opel/Vauxhall itself…the European arm of the company is severely in debt, and although GM has pledged to invest several billion to secure its future, there are still uncertain times ahead for the brands. But unlike the US market cars, European models have generally been well received and good sellers across most countries. A significant chunk of the losses can be attributed to the large development costs which are conducted in Europe, and also the fact that manufacturing costs are much higher than in other markets, such as South Korea where some Chevrolets are produced. GM’s Australian counterpart Holden faced similar problems back in the early 00’s, and so to cut costs many of their cars were replaced by rebadged Chevrolets to ensure that costs were lower. In Europe however, Chevrolet was launched as a seperate brand to replace Daewoo in 2005 and now covers the lower segment of the market, a place where some Opel/Vauxhalls still compete.

classy looking…but still just a Vauxhall to many buyers

GM has therefore found itself pretty stuck in Europe; ideally it would replicate its US brand strategy and have Chevrolet as the volume brand, with Opel/Vauxhall as its entry level premium offering and then eventually reintroduce the now competitive Cadillac models to crown its lineup. This will be difficult because of the century-long connotations of Opel and particularly Vauxhall as mainstream and definitely not luxury or aspirational at all, a change to using the Opel branding across Europe has been mooted but this would only solve part of the problem. But things are changing…the current generation of vehicles is undeniably alot classier in terms of appearance and interior ambience, and models like the new ‘Adam’ are helping to bring in younger customers who don’t have as many pre-conceptions about the brands.

The Adam may have a strange name, but is a new chapter for the brand

Whether or not this will work or not remains to be seen, and many customers may find it hard to stomach Vauxhall models which are priced above even VW counterparts, but it would be a shame for a brand with a competitive product range and storied history to disappear from the market.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s