I’d like to meet the idiot who thought that the Cadillac BLS was a good idea. Actually, I’d like to meet the group of idiots who said sure, let’s create a small, badge-engineered Saab, fit it with a diesel engine, call it a Caddy and sell it to Europeans, South Africans and Mexicans. No, wait; just sit me down in front of the idiot who gave the other idiots the power to green light the idiot who had the idiotic idea in the first place. And I’ll ask him straight out: what part of branding don’t you understand? You know, other than all of it.
Don’t get me wrong: I’m not saying that everyone inside the artist formerly known as the world’s largest automaker is completely clueless as to what kind of cars the company should be building. Just the ones making the decisions.
Of course, that’s a prima facie argument when you’re facing a born loser like the Cadillac BLS, a car that’s as far from “the standard of the world” as Target is from a “premium shopping experience.” But GM's brand confusion is equally obvious if you look elsewhere, at the other automobiles in The General's over-stuffed portfolio. I mean, what would you think about GM’s branding expertise if I told you that the above description of Target comes from the man behind the new Chevrolet Malibu?
It’s true. Clay Dean, GM's former design director of small and mid-sized cars, told Automotive News that the new Malibu will provide a “premium experience with a low price tag,” and then compared the model to Target. I don’t know about you, but the last time I went to Target I didn’t think, wow, this is just like one of those upmarket boutique type stores, only cheaper.
Target a cut-price Neiman Marcus? Hardly. I could try and complete that analogy– Malibu a cut-price Saab?– but readers’ sniggers would draw unwanted attention from their cubicle providers. Anyway, if Dean and GM had just left it at that– Malibu as Target– you could almost say, well, OK, Target makes money. Thing is, the company isn't even that focused; Clay's comment is just one small part of the Malibu’s aimless wander though the branding wilderness.
According to Automotive News, Ed Peper, Chevrolet's general manager, and Cheryl Catton, general director of Chevrolet's car marketing, went to see some honest-to-God customers who (gasp) bought something other than a Malibu (no names mentioned). The suits’ mission: figure out how to market the General’s next, next big thing/Hail Mary/new ’Bu.
The article's lead misleads readers into thinking the dynamic duo made random house calls (which would have shown some genuine stones). In fact, Peper and Catton visited pre-selected import lovers and asked them to define quality, reliability and dependability.
Hang on; shouldn’t they have been asking these questions BEFORE building the Malibu? I mean, if these target (pun intended) consumers said “I define quality as a door that shuts like a bank vault” and the Malibu’s portals close with all the precision of a Chinese-made Fairly Odd Parents’ lunchbox, what then?
Anyway, let’s assume that Peper and Catton simply wanted to know what wonderful things they should emphasize about their wonderful new Malibu. Then they’re still wrong. Creating a product that does one thing better than anyone else is the essence of branding. Even if you extend that philosophy to two or three attributes, the die was cast when the dies were cast. If you don’t know your car’s killer app by the time you build the damn thing, it's too late to re-boot.
Anyway, what did Peper and Catton say they learned from their ding-dong GM calling experience? “Consumers rank three core qualities as important when deciding on a mid-sized car: exterior styling, value and reliability.”
So, the heavy hitters went looking for definitions of core values and came back with the usual market research.
Excuse me: who ARE these people? Why are they in charge of a multi-billion dollar automaking enterprise? They’re minions of GM's President of North America, Troy Clarke, who “challenged” Peper and Catton to keep it party real. And who put Clarke at the helm? GM CEO Rick Wagoner.
The Italians say the fish stinks from the head down. Well, there you go. GM lifer and former CFO Rick Wagoner is the man who (at a minimum) destroyed any remaining brand equity within Cadillac, Buick, Saab, Pontiac, Oldsmobile and Chevrolet. Even if GM’s North American operations were making money, Wagoner should be held accountable for allowing his employees to engage in the mindless obliteration of GM’s most precious assets.
When GM introduced the BLS, they claimed they would sell 20k units per year. Last year, they sold 218. So far this year, they’ve shifted less than a dozen. Ladies and gentlemen, I rest my case.
First the Cimarron, then the Catera, and now the BLS. How many failures does it take until GM figures out that you can’t badge-engineer an average-Joe sedan and pass it off as a Cadillac? Those who forget the past are destined to repeat it.
I would make one distinction. The BLS was a bad idea because it was a crappy car. The 9-3 wasn’t terribly competitive to start with, so the vehicle could never have stood up to ideal of the “standard of the world.”
That said, the idea of a small Caddy is OK. M-B, BMW and Audi all have vehicles much smaller than the BLS. So long as the manufacturer finds a way to keep the vehicle consistent with the brand values, it works.
Given that 90% of the cars I see have just 1 or 2 passengers in them, I have to believe that there is a market for a high quality, luxurious, comfortable car that gets 40-50 MPG.
You mean to tell me that so far in 2007 they've sold 12 BLSs? As in one, two, three, four, five, six, seven, eight, nine, ten, eleven, twelve?! I'd bet I could sell more than that if I made them in my garage.
And, Cadillac actually DID learn that lesson once, resulting in development of their own platform in the early 90’s(birthing Seville, Eldorado and the first FWD Deville) because someone figured out that badge-engineered Cadillacs would eventually destroy the brand. Catera happened because of resource limitations, even then the General was $$ limited for platform development, and couldn’t afford to do the RWD platform they knew they needed (and finally developed, resulting in CTS/STS/SRX) Catera (like the first Escalade) was a band-aid.
BLS -> total sales of 218 in 2006? Heck, that blew away the 96 leftover new Oldsmobiles that left the lots last year!
Target = Walmart – shame. That said, Target is just where Chevy or maybe Buick should be, presenting a value conscious portfolio of products to customers. Cadillac shouldn’t equate itself to Target, as Cadillac is supposed to represent itself as, well, the Cadillac of cars. They need more of a Macy’s vibe at least, upscale and snooty but attainable. I think Caddy is already the most consistent and well-defined of GM’s brands, I hope they can keep it up and don’t get all retail-store on us. May they never sell another car under $30,000. It seems to me that GM is working on defining the brands more, because I can definitely tell the difference between a Buick and a Caddy, but they better stop making Buicks any nicer or else they will cannibalize their own niche market of truly swank Americana (no points for Lincoln). RWD, of course, remains the difference, but many many car buyers don’t know the first damn thing about driving dynamics, nor do they care…
Also Art & Science is teh sexy.
When I started to read this article, I thought the “BLS” was just a joke. Add a few letters in between… B*L*S***. Oh, as if none of you saw that?
No kazoomaloo Walmart equals Kmart minus shame. Thats the secret of their success. They sell the same stuff you can buy elsewhere for less. Now Kmart use to sell for less but it was stuff that was basically only of kmart brand quality (crap) There was real shame involved. You bought crap, you knew you bought crap, everyone else knew you bought crap and everyone knew you did so because you had no money.
There is no shame in Walmart thats the secret of their success. Trying to be Target is just admitting you’re never going to beat Walmart head on so that might actually be a realistic move on GM’s part
I was watching Top Gear the other night and the hosts were driving to a radio DJ gig in a Cadillac; was it a BLS, because they kept talking about all the Saab parts in the thing.
Chevy = Target, Old Navy
Pontiac = Sharper Image, GameSpot
Buick = Bloomingdales, Coach, Pottery Barn
Cadillac = Louis Vuitton, Williams Sonoma
GMC = Home Depot, Staples
Saab = Armani Xchange,Banana Republic
Saturn = J.Crew, Crate & Barrel
I don’t think Chevy aiming at Target is bad at all.
Target isn’t Walmart – shame, it’s Walmart + decency.
I’ve never cross-checked prices, since I NEVER go in a Walmart, but I’m under the impression that the prices are close on most things (sure, you can’t get a $50 50″ TV, but on things like detergent, etc…).
However, you can get decent quality stuff without having to step over dirty diapers in the aisles, or employees shooting up in the bathrooms. THAT’S what Chevy should be aiming to do.
I think it’s really funny that people snicker at all the Saab parts in the BLS, seeing as Saab has been reduced to mining the depths of the GM corporate parts bin for everything from switches to radios to…well….almost everythng.
Nice breakdown, Sherborn, and I really do believe GM is working towards those more clearly defined brand offerings, the company is just so huge and does so much re-badging it will take a while before those are properly planted in the minds of consumers. First step, stop selling the Acadia, my favorite of the lambdas is ruining GMC’s working image, sport up the Vibe, give it a G name, keep up the Opel/Saturn sexiness, etc.
RF: I gotta tell you, if I haven’t already, I really, really, enjoy what you write. Not only do you always have a point, not to mention a vocabulary, your passion comes through my flat-screen.
Thanks for the entertainment, involvement, and education. (This is NOT a paid political endorsement).
To the extent that it is even possible to sell US-badged cars in Europe in this price class, the car needs to have that in-your-face uber-Yank styling that makes American cars different than their European counterparts. (Think 300, Mustang, etc., the kind of cars that aren’t built in Europe and need to be imported from here.) Otherwise, there’s no point.
The problem with the BLS is the same problem that GMNA has with most of its products — there are a plethora of better alternatives to choose from. Particularly in Europe, there is no need to go with the American-badged alternative in a segment littered with great choices.
There’s no reason to get a BLS when you can get a 3-series BMW, Audi A4 and a whole host of other cars that are superior to it. Chances are pretty good that anyone getting a car in this class is getting it as part of a corporate lease (company cars are common middle-manager perks in Europe), so price isn’t even much of an issue.
The badge there is unknown and unwanted. Clearly, some brand manager promised that Cadillac had a future in foreign markets and elsewhere in our global economy. Here’s one example that shows that at this pace, they may not have a future at all.
ekapus:
August 22nd, 2007 at 10:30 am
I don’t think Chevy aiming at Target is bad at all.
Target isn’t Walmart – shame, it’s Walmart + decency.
And yet Target pays employees nearly as badly as Walmart, and offers just as little in the way of benefits and health insurance. However, they avoid the Walmart stigmata buy offering a somewhat higher grade of crap.
If you want a decent big-box retailer, try Costco.
I can honestly vouch that in the UK I have yet to see A Cadillac on the road let alone a BLS.And if the sales figures are as poor as Mr Farago says they are, then how are the dealerships in Europe, Mexico and South Africa running?! That’s a virtual nil cash flow (much like GM!). Unless GM are giving them money to stay open, which would not do their cash burn situation any good! Mind you, I don’t know why this is all coming as a shock to us.
News reporter: Today, GM reveals their branding is messed up. In other news, the sky is blue and the grass is green.
I’m being glib, but there is a serious point here. What is going through GM’s mind when it comes to branding? Personally, I doubt Cadillac will be successful as a luxury brand in Europe. I’m sorry but they are ugly cars, with ugly styling and horrible interiors. This actually shows you how moronic GM is. They’re trying to crack Europe with a luxury brand of their own, when all along they HAD a luxury brand already established in Europe and did nothing about it. I’m talking about SAAB. With a little thought, SAAB could have been a serious contender in the luxury car market in Europe (well, if Volvo can do it?). But instead, they decided to neglect the brand and push forward a brand which no-one would be seen dead in. And if you think I’m being harsh, think of it this way:
In the United States, Cadillac was king of the luxury car world. Then, came Mercedes-Benz, BMW and Audi. A little while later, came Lexus, Infiniti and Accura. It took them a while to crack Caddilac’s iron grip on the luxury car market and they’re still doing it now. Now transfer this situation to Europe. People are more steadfast about their luxury cars with German cars being the ones you turn to. Lexus is still having a hard time trying to crack Europe and Infiniti and Accura don’t exist here. So what chance do Cadillac have in cracking the European market with their half-arsed attempts?
Anyway, back to brands. When we look at GM’s branding situation you realise how fragile a giant GM actually is. GM has sales of about 9 million and this is spread over 11 brands (Chevrolet, Cadillac, GMC, Hummer, Holden, Opel, Vauxhall, Saturn, Saab, Pontiac and Buick). Whereas, Toyota has sales of 9 million over 5 brands (Toyota, Daihatsu, Scion, Lexus and Hino), the majority of which come from their main brand, “Toyota”. Organic growth is slow but reaps better rewards. Toyota are getting their main brand out there and giving it a distinct identity. GM, however, have 11 brands and not sure what to do with any of them.
If GM survive the financial storm, then they also have the thorny problems of their brand portfolio. GM need to either cut some loose or give each one a distinct indentity and vision. Maybe even to the point of running each brand separately and all the CEO’s of the brands report to the CEO of GM. Just like, Renault-Nissan. Both Renault and Nissan are run individually, but co-operate with each other to bring costs down or share technology. Both companies report to the Renault-Nissan board (which for some strange reason is based in the Netherlands?).
So, Brand ahoy!
Most girls I know lovingly refer to Target as “Tarje” (french pronucation). Their joke is that you can get stuff that actually looks really good at walmart prices. That’s what he’s referring to. As a man, no, the last time I went to Target I didn’t think I was at Sach’s. But the ladies do love it…
Sherborn Sean, your list is exactly right. While I was reading the editorial I thought to myself, “Cadillac like Target? It should be Williams Sonoma or Neiman Marcus. Chevy should be like Target.”
If only car dealerships could be like Target: no misleading ads, a nice shopping environment, and a good selection of attractively-priced merchandise with a touch of class.
Sadly, Detroit has gone to the Wal-Mart model, putting most of the marketing emphasis on price. That’s fine for commodities; Wal-Mart obviously meets the needs and expectations of many people. But Detroit is the high-cost producer. It can’t afford to sell cars just by underpricing the competition.
SherbornSean’s consumer brands equation is just about right. I would go so far as to recommend to GM management they print that list out, put it up in marketing, and use it as their strategy for a way forward.
And while we’re on the subject, yes, I do shop at Target, and yes, I do drive a Chevy. And I like both.
In the mid-90s Cadillac debuted their STS at the Frankfurt Auto Show…The first time Caddy debuted outside of NA in an attempt to tell the world that they finally produced a world-class vehicle. I saw the STS at the Frankfurt Airport and just a quick look-over of the thing made me laugh…It was like bringing a pea-shooter to a gun-fight. Caddy did manage to sell a couple thousand of them though. The 12 BLSs that Caddy sold this year probably were bought by ADAC and/or EuroNCAP for crash testing.
A few years ago, Top Gear had a review of the Cadillac SRX and their lead headline was “An American car that isn’t rubbish”…Such high praise…Seriously!
Interesting but not surprising, the negative comparisons of Walmart and Target. Peopl who work for Target (or KMart for that matter) are no better off than employees of Walmart. They all get paid the same. Just because Walmart is doing better does not make them evil and Target good.
As far as GM goes, it’s just more of the same.
Maybe a better approach would have been to “re-conquer” the luxury car market in USA before embarking on an oversea expedition to Europe.
I mean really if Caddy is a hard sell to Americans today why on earth would they think Europeans would want one?
When your “loyal” customers in your home market consider your products to be poorly engineered and poorly built what cache value will they have in a foriegn market that happens to produce some of the best cars in the world?
Cadillac DESTROYED its image with 30 years of buiding and selling sub-par cars. Forget about the “glory days” they are so far into the past that they count for nothing today.
What does the brand Cadillac actually stand for? You can not point to one single identifiable luxury car trait and show me where and how Cadillac excelled in it within the last 30 years.
Power: NO
Chassis: NO
Best Interiors: NO
Best paint: NO
Best ride: NO
I can go on and on but what is the point!
What Cadillac of the past 30 years does stand for is:
Underpowerd Obsolete engines: YES
Outdated poorly engineered chassis and bodies: Yes
Fake wood: YES
Fake Chrome: YES
Mouse fur headliners: YES
Fake Wire wheels: YES
This is like a mass producer of pleather jackets now deciding to make the claim that they make the best leather jackets in the world!
Now I know Caddy is trying to make decent cars today but the real world perception of Cadillac is of cars that “fake” luxury. They are sold by a bunch of shaddy crocks to customers that are too stupid or jaded to know any better.
Not the image that most luxury car buyers want.
I thought the comparison was Chevy = Target, not Cadillac = Target. But I guess that would mean that the BLS is Target-level, since it’s based on the same platform as the Chevy Malibu. Let’s cross our fingers and hope that Cadillac doesn’t get a new Theta-based SUV as some rumors indicate.
Mr. Farrago, please, please don’t hold back. You really should tell us what you think of the new BLS. :)
@Sherborn – That’s an interesting list of comparisons. I’m assuming that’s what you’re thinking the target should be, not what you think it currently is. At this point, I don’t think there’s a GM brand that makes it above Target or Meijer level.
Maybe GM, with all of its economies of scale, should try to be the Costco of the autmotive world. I could roll my SUV into the parking lot and pick up a 3 pack of Aveos or a family size container of Malibus…
If you ask me they sold 12 cars MORE then they deserve.
Here is what Cadillac means to me:
bad window regulators(they are designed to fail early, just look at the design), bad PCM, faulty air bag sensor, faulty climate control, instrument cluster problems, an antiquated transmission that doesn’t shift right, bad A/C compressor, bad break calipers and poor quality rotors, an engine that never runs properly let alone great(and the dealer can’t figure it out), engine shutdowns while at red lights or worse while in motion on the freeway, average gas milage of 12 mpg, the worst car ownership experience of my life(and I drove an Alfa Spider for 10 years as my daily driver, the Alfa was 100 times more reliable), leaves you stranded on family vacations, and this is only half the list.
I would be more financially off if I had just burned the money or used it to wipe my butt rather stupidly deciding try and support an American manufacturer because everyone said they improved.
And that noose is still tied around my neck. My wife and I have no idea what to do with it since we can’t sell it in good concious to another individual and if we trade it in we are going to lose our asses for a 3rd time.
It never ceases to amaze me how most of the readers on this site, and probably many more who don’t visit TTAC, can see the obvious glaring flaws in the Big 2.8’s business strategies and product lines and how they should fix them. Yet these seemingingly obvious, at least to me and many of you, solutions manage to elude all of the upper management of 3 of the worlds largest automakers.
One can only help but come away with 2 conclusions:
1. Running a huge corporation like this is much much more complicated than any of us think.
2. Everyone running the show in Detriot is mentally handicapped.
Take one union in Rüsselsheim, the home of Opel.
Take another union at Trollhättan, the “used to be home” of Saab.
Take a beleaguered GM, looking to (ahem) rationalize production. They took a look at what they had turned Saab into – a heap of Opel parts – and decided to shunt manufacture of Saabs to Rüsselsheim as that made economic sense. Heck, moving the parts north to Trollhättan just to slap a Chicken-with-a-Party-Hat badge on the result was stupid. They could fit all the badges they needed in the back of a 9-3 and drive that to Germany instead.
A GM brain saw an opportunity.
“Now we’ve got some freshly liberated production capacity where we used to make Saabs!!! Why don’t we make Cadillacs there?”
Why?
This is like watching a perfectly avoidable accident involving jumbo jets unfolding before your very eyes — unstoppable and tragic.
For a while there the Saabaru looked to be the greatest fuck up in recent GM history, but Wagoner’s minions are likewise not to be stopped. Aren’t there laws against jayrunning a business?
Number 2
@matt
Some initial, flawed assumptions were made by the majors, that have come to haunt them. I guess that in any endeavor you have to make assumptions, and damn the cost.
Right now GM, Ford and Chrysler (as well as a few other choice carmakers) have a complete mismatch between their offering and demand. They’re like soldiers showing up for winter war with desert gear.
Flawed assumptions:
1. Cross platform engineering and parts sharing is a good idea.
2. Badge “engineering” won’t turn off consumers.
3. All brands should have a similar range of vehicles. (Duh?)
4. Gasoline prices won’t rise significantly.
5. People won’t mind that we rig huge profits for ourselves by building overweight and over engineered and overpowered cars they don’t need.
6. “Rich people don’t care about the price of gas.”
Ah, I could go on, and on.
“One can only help but come away with 2 conclusions:
1. Running a huge corporation like this is much much more complicated than any of us think.
2. Everyone running the show in Detriot is mentally handicapped.”
A little bit of both, perhaps? I mean, a lot of people keep saying “Kill off Buick, Pontiac, GMC, Hummer, Saab, Saturn” as if that’s the answer to all of GM’s problems. How many billions did it cost to kill of Olds again? And what good did it to do the company’s overall health? So yeah, there are a lot of armchair CEOs shouting out “obvious” answers that won’t work.
But on the other hand, it’s pretty much indisputable that GM’s branding is a confusing and directionless mess. They say that Pontiac will be a RWD performance brand, then they bring out the G5, G6, and Torrent. They say Cadillac will be world-class luxury, and then they bring out a rebadged blandmobile. And most of the other brands are worse.
Most people have no idea what half those brands mean in the first place, and those who know what they should be can easily see that GM talks a good talk about branding and then utterly fails to live up to their promises.
OK, to play the devil’s advocate, let’s imagine what GM–or at least that well-known band, Rabid Rick and the Bystanders–are thinking about the General’s North American operations:
1) We can’t declare bankruptcy, because that’d mean admitting defeat and we’d be outta here;
2) We can’t arbitrarily reduce the number of dealerships, so we gotta keep feeding them with product;
3) We can’t let Delphi crash and burn, because we’re still dependent on them;
4) We can’t cut pensions;
5) And we can’t realistically hope for more than small cuts in the UAW’s health care and wages.
SO —
1) We’ll keep running the remaining factories;
2) We’ll give the dealers whatever cars, trucks, SUVs, etc. they may have any chance of selling;
3) Those vehicles are going to be made as cheaply as possible (shoddy parts; brand engineering) given the above constraints; and
4) Hope the cash holds out until NA operations dwindle to the point that foreign operations can keep it alive.
Just to clarify: my main beef with the Target reference is NOT that Chevy should or shouldn't be Target. In fact, I think that's a damn fine way of thinking about the brand. The problem is that GM's suit thinks Target's a "premium shopping experience" at bargain basement prices. It isn't. It's not even close. To my mind, the idea of the Malibu as a downmarket upmarket car is bizarre and, ultimately, unachievable. An Accord is the best car it car be, not a lower-priced version of something else. THAT'S what I'm talking about.
Lumbergh21: Interesting but not surprising, the negative comparisons of Walmart and Target. Peopl who work for Target (or KMart for that matter) are no better off than employees of Walmart. They all get paid the same. Just because Walmart is doing better does not make them evil and Target good.
I’ve never been in a Target store that was not clean and whose staff was not professional. In contrast, both K-Mart and Wal-Mart stores are dirty, items are not priced, merchandise is scattered all over the store in no particular order. And the staff at Wal-Mart and K-Mart. They are sloppily dressed, young women squeezed into faded, too-tight blue jeans, no make-up, and sloppy bed-head hair. Young men with pants falling down, underwear exposed, and odd facial hair. They seem tired, or maybe ill, or perhaps hung over. And then there are the long lines at the cash registers, even long lines at the self-checkout. Wal-Mart and K-Mart are depressing places to shop.
Recently Wal-Mart and Home Depot have posted disappointing sales figures. We all know what Nardelli did to Home Depot that helped bring this about. As for Wal-Mart, as another columnist noted, people who work for Wal-Mart can’t afford to shop there. Instead they buy their clothes at the Salvation Army.
Instead they buy their clothes at the Salvation Army.
..which has a lot nicer clothes for sale than either Walmart or Target here in San Francisco.
RF:
The problem is that GM’s suit thinks Target’s a “premium shopping experience” at bargain basement prices. It isn’t. It’s not even close.
Agreed, Target is better than Wal-mart, but that bar is set awfully low. The folks at the Tubes must not do their own shopping.
I’m not sure Costco is a good analogy either – sure, come get a Lexus (or 10) today at almost half off retail, but no ambience, no in-store service, and no guarantees that you’ll see it again the next time you’re there. Of course, the thrill of the unknown (and cheap pizza) helps keeping us Costco addicts coming back over and over again but is not what a car buyer wants.
The New Malibu is stuck in a really tough spot as due to GM’s panalopy of brands, above Cobalt (big whoop!), below Impala and sideways (and downwards?) from Aura – how premium is that?
@ Jonathon
I realize that running a huge corporation like GM or Ford is much more daunting than many of us would like to admit, and of course it isn’t as simple as just killing of Buick and Hummer and whatever else.
But when you have entire departments and management teams devoted to developing a brand image and developing products that should only serve to enhance that image, and they approve a small, uncompetitive, diesel, based off of an already outdated Saab platform to do battle with BMW, Audi, and MB, you have to wonder what they were thinking, if they were thinking at all.
And 218 units sold in a year is completely laughable. Like someone said earlier, if TTAC’s collective readership pooled together to build a car in a garage, it would probably sell better.
i will take this column as a thanks for all the times i have said it was the boys at the top that messed up all the Detroit iron. it seems to be finally getting through to the auto writers where the bulk of the problem lives.
Chevy = Walmart, not Target, folks. Why? Walmart’s shoppers are mostly rural and suburban. Target shoppers are mostly urban and suburban. In bigger cities, Chevys are not as common. Go to the Midwest, South, or any rural area and people still buy them like it’s a no-brainer, and even that is diminishing.
Can anyone tell me why they can’t kill off dealerships? What are the franchise contracts that everyone is talking about like? What are GM’s obligation’s under these contracts? Do they need to offer x different Buicks to the dealers? Can’t they just give them rebadged Daewo’s untill the dealers call it quits themselves after loosing enough money?
Bad idea, the demographic SAAB are not the same as Caddy.
Their demographcis are polar oppitsites.
”
Chevy = Target, Old Navy
Pontiac = Sharper Image, GameSpot
Buick = Bloomingdales, Coach, Pottery Barn
Cadillac = Louis Vuitton, Williams Sonoma
GMC = Home Depot, Staples
Saab = Armani Xchange,Banana Republic
Saturn = J.Crew, Crate & Barrel”
You forgot Hummer = Matchbox
For a Chevy owner, Target probably IS the premium shopping experience.
At Target, I don’t have to sort through a pile of boxes to find what I want; the clerks keep things well organized. If I do have some reason to handle a bunch of the merchandise at Target, I won’t have to wash my hands afterwards (my experience, the stock at Wal*Mart is filthy).
As for the employee experience, Target pays their help about the same but offers benefits to their part-time people (you must average 20 hours/week). Wal*Mart? No such luck; bennies are very hard to come by.
Chevy = Target, Old Navy
Pontiac = Sharper Image, GameSpot
Buick = Bloomingdales, Coach, Pottery Barn
Cadillac = Louis Vuitton, Williams Sonoma
GMC = Home Depot, Staples
Saab = Armani Xchange, Banana Republic
Saturn = J.Crew, Crate & Barrel
You forgot Hummer = Matchbox
And if you broke it out as a separate brand:
Corvette = Victoria’s Secret
For me, Cadillac still = J.C. Penney
RF:
Hang on; shouldn’t they have been asking these questions BEFORE building the Malibu? I mean, if these target (pun intended) consumers said “I define quality as a door that shuts like a bank vault” and the Malibu’s portals close with all the precision of a Chinese-made Fairly Odd Parents’ lunchbox, what then?
Doing field research BEFORE developing a vehicle. What a concept! This is something that Toyota and Honda have been doing for decades. Toyota did tons of field research before they started developing the new Tundra.
I didn’t think things could get worse than the Saturn Ion.
Chevy = Target, Old Navy
Pontiac = Sharper Image, GameSpot
Buick = Bloomingdales, Coach, Pottery Barn
Cadillac = Louis Vuitton, Williams Sonoma
GMC = Home Depot, Staples
Saab = Armani Xchange, Banana Republic
Saturn = J.Crew, Crate & Barrel
This seems more like the way GM is probably thinking than a solution in that these stores don’t seem to display that much range; so SAAB/Armani is a Saturn/Jcrew shirt with a touch more chrome at around the same price?
Cadillac should be unobtainium for most people. Cadillac should only compete with the best car that anybody else makes while at the same time pretending to completely ignore any japanese product because no matter how efficient or well-made a high end japanese car is, it has yet to become anything but a very fancy Camry and is equally as souless. Not that the Japanese cars are not extremely good but (my understanding is) that really wealthy people buy hand craftiness and passion and aura and rarity as well as performance. Competence should really just be a given.
It should be a big, BIG jump to get a Cadillac. Cadillac should have built that freaky Maybach/Fulda batmobile car or the Veyron or even, more simply, Bentleys with less english touring styling. When you see a Cadillac pulled over by the cops you should think its the King of Spain and Jimmy Page inside ’cause they decided to blow a weekend by flying into LAX and tearing through the southwest on a bender.
No middle managers should be able to afford Cadillacs. Buick is for them.
So after all that, I’ll try my own draft:
Chevy = Target (cheap and cheerful and basic – hane’s underwear and socks)
Pontiac = UFChallenge, fast and modifiable. A car someone can actually work on. Greasy. Maybe a store that sells guns, dunno.
Buick = most middle to upper middle class stores – Camry – efficient with amenities and decent resale and a range of styling/options.
GMC = trucks/Suv’s – don’t really care. Just make ’em green.
SAAB = Apple Stores, international flair, high design and affordable price. More towards Design Within Reach than Ikea.
Saturn = uh, just make ’em Chevy’s, never got ’em.
Corvette = Desperately needs to be much higher up the food chain from Pontiac. Needs to be more than just an excuse to offer free mustache rides.
@Johnson
And some may wonder why the door handle and interior controls on the Tundra seem to be a tad oversized, until they find out what Toyota found out: that serious owners like to keep their work gloves on when getting into the car to haul.
Come on Bob, You can’t be this harsh about GM’s current management. Did their fathers not teach them the way of the Cimmaron?
It has taken the better part of a generation to destroy GM, it is far too late to change the course of a ship that big, it will hit the rocks. There is nothing to do now other than pass the popcorn.
Toyota did tons of field research before they started developing the new Tundra.
Yet they are moving most of them by using a strategy that GM may as well patent — mega incentives. According to Edmunds, average Tundra incentives for July were $4,625 per unit. Not exactly a shining example of a pattern to emulate.
All of the major automakers are well acquainted with market research and consumer surveys. (This is, after all, what helps to keep J.D. Power in business…it’s the automakers that pay for that data to be produced.) I doubt that there is any shortage of research being compiled.
If anything, there may be a bit too much market research. Good decisions are sometimes avoided because there is no quantitative study to back them up, and educated intuition by those in the know is neutered by the absence of a mathematical proof to support it.
More to the point, consumers don’t always know what they want, and they don’t always tell the truth, so opinion surveys have limited utility. Consumers may not give much thought to what they are asked, or may lie in order to please the surveyor, such as claiming to care about emissions, when more of them care far more about horsepower. I doubt that there was hardly a consumer in America who would have expressed much longing for a Prius concept back in the 1990’s when the vehicle was being conceived.
What seems to be missing at GM is an intuitive sense of what the market wants and an ability to translate that sense into designs that they can run with. When people complain about the lack of passion in many modern-day cars, what ultimately miffs them is the data-driven sterile approach that leads to half-baked compromises and design-by-committee blandness, the natural outcome produced by bureaucrats who rely solely on crunched numbers and reports to make decisions.
The sex appeal of classic designs was generally not produced by styling clinics and consumer surveys, but by skilled artisans with an artistic spirit who could translate passion and lust into good design. Toyota may lead the pack in reliability, but the soft underbelly, should anyone choose to stab it, is the sterility of their products. GM could badly use a modern day Bill Mitchell in its design studios, someone with a bit of passion to put a few hormones back where they belong.
1. Running a huge corporation like this is much much more complicated than any of us think.
2. Everyone running the show in Detriot is mentally handicapped.”
Or their corporate cultures are so strongly oriented toward parochialism, conformity and corner-cutting medocrity. Anyone who doesn’t fit the mold leaves in disgust; the only ones who make it to the top of the corporate ladder are the self-servng, arch-mediocrity game-players and corporate politicians.
“Hang on; shouldn’t they have been asking these questions BEFORE building the Malibu? I mean, if these target (pun intended) consumers said “I define quality as a door that shuts like a bank vault” and the Malibu’s portals close with all the precision of a Chinese-made Fairly Odd Parents’ lunchbox, what then?”
This situation is standard fare in Detroit. I’ll tell you what then…Then they try to make drastic last minute changes to the vehicle that in the end don’t achieve the desired result but do render the vehicle unprofitable and unreliable. In fact, regardless of what their market research tells them, they are going to try and fundamentally change one feature of the car or other after the final prototypes are already being built at the assembly plant.
Upper management, VP level, starts a program with a vague plan, ie. build a midsize car at about this price with an all new chassis but 100% carryover parts, and then lets it get built. They then evaluate it for the first time after most of the validation testing is complete so it is somewhat representative of the production unit and find it not meeting their unstated expectations. Then the marketing study is commenced.
If Chevy = Target maybe they should call it the Malibeaux.
ejacobs:
August 22nd, 2007 at 8:47 pm
Chevy = Walmart, not Target, folks. Why? Walmart’s shoppers are mostly rural and suburban. Target shoppers are mostly urban and suburban. In bigger cities, Chevys are not as common. Go to the Midwest, South, or any rural area and people still buy them like it’s a no-brainer, and even that is diminishing.
Agreed. I think the reality is:
Chevy = Walmart
Pontiac = Kohls
Buick = JC Penney
GMC = Menards
SAAB = Eddie Bauer
Cadillac = Lord & Taylor
GM = F.W. Woolworth.
Luther:
So GM is going to transform into a shoe store?
“Hang on; shouldn’t they have been asking these questions BEFORE building the Malibu?”
Uh…no. GM designs their cars 5 years in advance of production. They stick it on the concept autoshow circuit and by the time the car actually hits the market, it’s watered down and over-exposed such that the potential customer has already lost interest and moved on (like the Camaro). GM no longer builds cars. They build commodities. You use them and throw them away. Having had a GM car in my garage my entire driving life, it’s been excruciatingly painful watching GM deteriorate. I wonder what all those Marketing experts and MBA’s learned in school. They should have decided who their target market was going to be and then design and build a car (like the Malibu or the BLS) to meet the needs of that Market. They’ve got it backwards.
As Inego Montoya said in The Princess Bride, “You keep using that word…but I do not think it means what you think it means.” In this case, that word is “value.” In GM speak, “value” means parts-bin engineering and corner-cutting (and, no doubt, a lot of Six-Sigma twaddle) to cut production costs in hopes of maintaining some semblance of return on fire-sale pricing. To me, “value” means feeling like I got more than I paid for.
I have a 2005 Mazda3 2.3, which I’m pretty happy with. It was not the cheapest car in its class, although it was certainly competitive with the other cars I considered. But it’s a well-built car — even in areas like the seams in the trunk under the carpet, there’s no sign of corner cutting. It’s solidly constructed. It has some thoughtful features (steering-wheel-mounted radio controls, for one), a good balance of power and fuel economy, and competent road manners. It’s not perfect, and there are areas for improvement, but it doesn’t feel or say “cheap.” I’m pleased when I walk up to it because it feels like a more expensive car. When I see a Volvo S40 (which uses the same platform and same body shell, but costs about $10K more), I feel smug.
Perhaps more to the point, it feels like the designers and manufacturers of this car were concerned with making IT a satisfying vehicle. Not filling a gap in a line-up because the dealers are screaming that they need something a little smaller/cheaper, or that the company figures failing to show in a particular category smacks of failure, but with the product itself being competitive. None of the Big 2.8 have ever done that with their compact cars, at least not in this country. Certainly, GM has NEVER done that. Chevy has never shown any real interest in your buying a Vega, a Citation, or a Cavalier; they just want you to keep them in mind for when you decide to buy an Impala (or, these days, a Tahoe).
And yes, I’m aware the 3 shares its C1 platform with the current European Focus, which Ford, in its wisdom, decided not to bring here in favor of a warmed-over version of the old car. Why, I have no clue, but it meant that the U.S. Focus was never even on my shopping list.
“So GM is going to transform into a shoe store?”
A health care provider…GMicare.
Pch101,
The old 1st gen Tundra also had a great deal of incentives. There is plenty proof of that, yet the old Tundra sold only at a fraction of what this new model is selling now. Obviously it’s not the incentives that are selling it, it’s mostly the truck itself.
The thing with the truck market is that you MUST have incentives. Honda has incentives for their Ridgeline, yet sales are still horrible. Nissan has some pretty big incentives for the Titan, yet sales are horrible. Every single maker who has a vehicle in the truck market is offering incentives. The problem is that thanks to GM, Ford, and Chrysler truck buyers *expect* incentives, no matter what make we’re talking about. Since the American makers dominate the truck market, Toyota and any other import makers are fighting an uphill battle. Toyota made a good truck with this new Tundra, and it hit the ground running with lots of incentives out of the gate. It comes as no surprise that this move surprised the American makers, especially GM. Now that Toyota has gained somewhat of a foothold in the truck market, they will ease off incentives.
And yes, as opposed to GM, Toyota does seem to have an intuitive sense for what the market wants and what consumers want.
Obviously it’s not the incentives that are selling it, it’s mostly the truck itself.
Toyota’s use of almost $5,000 in incentives per unit is an unmistakable sign of failure. There’s nothing to debate here: Any automaker that requires that amount of bribery extra motivation to move product is not firing on all cylinders and is not doing a terrific job in selling it. Toyota’s incentives are among the highest in the business, surpassing even those on the Silverado, which is still outselling it.
Still, Toyota’s loss is not the General’s gain. Toyota has several other successful products that can be used to prop up the Tundra between here and eternity. It’s just a matter of time before GM loses this segment, too. I’ll bet that within ten years or so, Toyota will own this business and relegate GM to a has-been in even this market. But not quite yet.
@KatiePuckrick –
I see one elderly gent in his Cadillac (BLS?) irregularly near work. Considering this is North London and the place is swimming in Jaguar XJs, Mercedes, Audi and Beemers etc I consider that a pitiful tally for a premium marque.
Autocar totted up the figures a few months back, and Cadillac had sold approximately 35 vehicles so far in 2007. This they compared with Lamborghini, who had sold roughly twice as much here in the UK.
I seem to remember they’d also queried GM about this, who were steadfastly determined to press on trying to introduce Caddy here. Complete waste of time IMO.
This reminds me of an ad I saw the other day for the *ALL NEW* Pontiac G5. It is, of course, practically indistinguishable from the Cobalt. All I could think was, “They really don’t get it do they?”
Pch101,
Again, to clarify, total incentives are around the $4K range, not the $5K range. By *total* I mean dealer incentives combined with official Toyota incentives. If you look at the incentives offered in August for the Silverado and Sierra, they are about the same as the Tundra in terms of official automaker incentives.
Toyota is offering less incentives for the Tundra in August than they did in July which means Toyota is easing off incentives, meanwhile GM is increasing incentives for it’s truck twins.
The only thing unmistakable here is your flawed assumption that incentives are selling this truck. Is it SO hard to believe that *gasp* Toyota has made a COMPETITIVE full-size truck? Incentives are the price of entry into the full-size truck market.
To again restate, the old 1st gen Tundra has some BIG total incentives, in the range of 5- 6K but that DID NOT help sell the old Tundra. The new Tundra is selling at OVER twice the rate of the old Tundra, while using less incentives than the old Tundra.
Going by the FACTS, for the record Dodge has by far the highest incentives in the truck market for the Ram. Ford also has hefty incentives on the F150. The only reason F-Series sales aren’t dropping at a faster rate is because of the new Superduty. Right now, GM, Ford, and Toyota full size truck incentives are close to each other.
And with the news that GM is cutting truck production and that their truck sales continue to drop, get ready for additional increases in Silverado/Sierra incentives.
Toyota’s use of almost $5,000 in incentives per unit is an unmistakable sign of failure.
Absolutely not! There are many reasons why these incentives were offered on the Tundra, none of which have anything to do with failure. It has been said on TTAC many times that Toyota could give these trucks away to gain market share and still be highly profitable as a Company. The mere fact that their new full size truck comes to market just when the market for FS trucks is shrinking is another reason. Toyota are not plagued by the short term quarterly mindset of the D3 but rather take a longer term view of it’s business. There is not a single market that Toyota have competed in that they have not eventually ended up as one of the dominant players in, even after a few false starts eg. Previa – 1st gen Sienna – current sienna which is second only to Honda’s Odyssey. With the exception of Chrysler all of the minivan offerings from the D3 were/are pathetic and they are abandoning the market. That’s failure. There is no question that GM’s FS trucks are the state-of-the-art and that Toyota has a tough act to follow but it is a big mistake, as past history shows, to declare Toyota’s efforts in this sector as a failure.
You know, I think the only solution for GM is to go bankrupt. Yep, shut down, kill off all UAW obligations, nuke the whole dealer network, etc.
Then rise from the ashes, decide on two or three brands, build engineering and marketing organizations, resurrect a choice, tiny, but proportional dealer network and outsource all manufacturing (China, Magna, etc.) after rebuilding solid healthy working relationships with suppliers.
This I believe is the only foreseeable future I see for GM.
Are the Tundra incentives a sign of a larger problem with pickup sales re: the slumping housing market and too much consumer debt?
Should they have launched a new model into a constricting market? They would have to be confident of capturing a share of that market even under unfavorable conditions.
Again, to clarify, total incentives are around the $4K range, not the $5K range.
I quoted Edmunds, which calculates incentives at $4,625 per unit. If you want to debate whether $4,625 is or isn’t almost $5,000 misses the point. The main issue is that the incentives are massive, a classic indication that Toyota priced it wrong and is not doing very well with it. I respect Toyota as a company, but I am no apologist for its failings, either.
Then again, it doesn’t matter in the scheme of things whether the Tundra needs incentives. The primary benefit of the Tundra to the Toyota lineup is its ability to put GM into a semi-permanent choke hold. Toyota will eventually get past this juncture; I wonder whether GM can.
Toyota is supposed to unveil a “Tundra HD concept” at the SEMA show in November. A lot of people don’t like the styling of the new GM twins, but they won’t buy a Tundra because there is no HD option (yet). But when a Tundra HD comes to market (and it’s very likely) then it will put GM into an even worse position.
They sold 45 BLS’s so far this year, not 12. Not like that is a lot better, but hey, what a potential headline: “Sales up nearly 300%!”.
Also are you sure that the 20,000 sales goal might not have been for all of Caddy in Europe by 2010?
Agreed – Rabid Rick should not even be allowed to apply for a loan at GMAC for fear of losses.
That said, branding is NOT doing one thing better than anyone else. A brand is a promise, plain and simple.
The equity in the brand is derived from whether the customer believes that promise will be honored.
Lastly, sales and inherently based on if that promise means anything to a customer. That is where these jokers have fallen down, they can’t figure out what these promises should be. Pathetic. And why there is no equity, promises keep getting broken.
It is interesting to see how rapidly Fiat has become reenergized so shortly after it’s divorce from GM.
GM management paid $2B just to not continue it’s partnership with Fiat, then Fiat turns around and starts putting out hot vehicles across the spectrum. Even Maserati has been thoroughly reborn.
It is stunning how bad so much of US industrial management has become.