American brands that may fade into oblivion
General Motors reigned as king for 35 years in the motors Industry. It was a symbol of American pride. The company had multiple brands under it umbrella, raging from the Swedish Saab to the military style Hummer. But GM was hit but excessive debts and the recession. The same story goes for Chrysler, another of the three big in U.S. automotive industry.
GM may have to close down production of some of its brands for United States. It has already put the Hummer up for sale. On April 28 it announced the end Pontiac and Saab is definitely on its way out. Many other brands like the GMC, the American Buick and Japan based Mitsubishi may soon face death in North America.
For Chrylser, some of its models may be discontinued like the retro-styled PT Cruiser, Chrysler Aspen and Dodge Durango in 2009. This was expected after it cut down four other models from is portfolio in 2008.
Both the car manufacturers have announced their intentions to end production of non-performers. All the above mentioned have had slow sales and the figures from the last five years have not been good. This was the condition even before the recession hit and is clearly visible that the brands have been overlooked by the consumers.
The total sales fell by 18.3 percent which is a record in U.S. history. Only 13.2 million units were sold in 2008, which was a major set back to automobile manufacturers. The most visible decline was seen in Buick brand as sales declined by 81 percent compared to 2003. This is after GM has introduced new models. The sales of Lacrosse and Lucerne sedans were down by 66 percent and 43 percent respectively in January 2009.
But the auto makers are reluctant to let go off the brands, as some of them have been best sellers at some time I the past. The retro-style PT Cruiser was a top seller for Chrysler. The Saturn brand of cars were grossing huge revenues for GM. It is now set to end production by 2012. Pontiac will meet its demise by end of 2010.
The decision on Saab will take a longer time. GM vice chairman and CFO has said that the decision on Saab will taken considering the global strategic view of the brand, Right now our focus is on U.S. market and our four key brands Chevrolet, Cadillac, Buick and GMC.”
According to some analysts, the problem with the brands leading to their demise started 1980. That was when the Oldsmobile, Buick, Cadillac and even Chevrolet all looked alike. This was when GM allowed multi-branding of the same vehicles. There were some minor exterior changes, but the cars were alike in all ways.
They said that the idea that a different label could be applied on a car with another brand displays a lack of understanding of the car business. This is sector the car itself becomes the promoter of the brand and not the other way around. Hence people buying any of the brands could not differentiate from other GM brands. Hence, the company ended up loosing a lot of brand value and customer goodwill.
However, the sad part of the story is that it is not the inanimate cars that are going out, but also loss of jobs and revenues to the government. More than a lakh jobs will be lost and Detroit, the home of car manufacturing could loose its edge.
Indian car market is now growing up to a bigger platform as more car manufacturers find markets here. The Indian car industry have a lot of lessons to learn from the U.S. The country will soon have an equally big passenger car market as the United States. This should not force the existing car manufacturers to resort to similar tactics. Indian car market has a bright future and every step should be carefully tread in order to minimize risk and enhance profits.
The leading light comes from Tata Motors which took over the ailing Jaguar and Land Rover and is rightly turning it around to a more stable economic condition.
Article Source:http://www.articlesbase.com/cars-articles/american-brands-that-may-fade-into-oblivion-891929.html
