It’s been a widely-shared opinion among TTAC’s writers for some time that GM should have used its bailout and bankruptcy to cuts its brand portfolio to Chevrolet and Cadillac. We’ve already sussed out the negative side effects of trying to hold onto the Buick-GMC dealer net, the biggest of which is that without Pontiac, Buick is being forced into volume-chasing. With the debut of the Granite “Urban Utility Concept,” we’re seeing the same brand-diluting volume-hunting taking place at the “Professional Grade” brand. GM’s attempt to bring more youth and volume to its GMC brand is starting with a Youtube-heavy, family-oriented marketing campaign, pointing the way for the brand to betray its “Professional Grade” raison d’etre. But GM’s marketing plan for the Gamma (Aveo)-based Granite will be the final nail in the brand’s coffin. Because to save the brand, GM must destroy the brand.
Steve Rosenblum, Buick-GMC’s director of advertising and promotions tells Automotive News [sub] that the Granite will be so different from GMC’s past products that:
If GMC produces the Granite or a similar vehicle, it would target a new audience — people 35 or younger. That might mean no TV commercial or no use of GMC’s well-regarded tag line “Professional Grade,”
Here’s the thing: if GMC doesn’t mean “Professional Grade,” what the hell does it mean? The short answer is that it reverts back to being a rebadge brand. And for what? It’s not as if GM’s 2012 lineup is going to be short on compact CUVs. Instead, GMC is going to be GM’s marketing lab, a place to experiment with new marketing techniques that are novel for the sake of novelty, having nothing to do with GMC’s traditional buyers.
Rosenblum’s team has developed a brochure with bar-code-type designs called quick response codes that smart phones can read. Phones scan the codes and point consumers to Web pages that give details on the Granite’s features, offer opportunities for social networking and discuss designers’ inspirations for the concept.
GMC’s “Professional Grade” already rings hollow, ignoring workmanlike touches like hose-out interiors and tool storage in favor of ugly restylings and lots of tech toys. Keeping the sub-brand Denali trim has already confused the brand’s image by going for an older, more luxury-seeking consumer. Remaking GMC as a youth-oriented consumer brand will only accelerate the brand’s decline (sales down 30 percent last year) and create a third rail for a brand that is already trying to do “luxury truck” and “professional grade.”
The antidote to GMC’s brand positioning flailing can be found at (surprise, surprise) Chevrolet and Cadillac. AN [sub] reports that Chevrolet’s new ad campaign, set to roll out in February, rejects GM’s usual addiction to constant brand repositioning to align with marketers’ lifestyle-of-the-moment. Instead of replacing the “American Revolution” tagline, Chevy will use the brand name as a tag at the end of the commercials. In short, the focus is on the product, an approach that’s also taking hold at Cadillac. We need more than just great TV, we have to turn down the lifestyle and, I think, more definitely articulate the [vehicle] attributes,” says Cadillac’s Brian Nesbitt.
Of course, without the kind of unique products that Chevy and Cadillac enjoy, it’s a lot harder for GMC to sell that kind of product-focused marketing. After all, what can you say (favorably) about a Terrain that you can’t say about an Equinox? Which, in a nutshell, is why GMC needs to go.
Does anyone believe for more than a second that all current GMC customers wouldn’t go directly to Chevy? The numbers of folks who have a GMC who would convert to an F-150? or Ram? These numbers have to be small.
When your business isn’t doing to well – and I would say bankruptcy is a very big sign -you retreat to your strengths. GM doesn’t have the money to support “trim” versions of their trucks. GMC is a “trim” version of Chevy.
I don’t think they would retain as many as you think. You are thinking rationally, knowing that the difference between a Chevy and a GMC is purely cosmetic. But if you knew this, why would you spend a few grand more for precisely the same car? (Equinox starts at 22.6, Terrtain at 24.9)?
Many Oldsmobile buyers went to Hyundai, they didn’t go buy Pontiac Gran Prixs or w/e the equivalent GM product was, because they were buying the brand, not the car.
So if you killed GMC, I think you would see a lot of people switch over to Ford.
I have actually seen a GMC PU with a “Calvin peeing on a Bowtie” sticker in the window.
Amazing.
Bunter
IIRC the same exact thing happened to Plymouth customers as well, they left the brand and never came back. Didn’t help that the Chrysler brand supposed to up in the marketplace at the same time.
I have my doubts, since most GMCs are purchased within spitting distance of the nearest bowtie dealer. I don’t know why people buy GMCs, but they do. It’s GM’s #2 division.
toxicroach, the difference between Oldsmobile and Pontiac was vastly different in styling inside and out not to mention comfort and interior appointment and design. The Aurora and Bonneville may have been platform mates but they were different cars. It’s easy to see why a traditional Olds customer would not want a Pontiac, any Pontiac.
The difference between Chevrolet and GMC is extremely minor in comparison. It is a few badges and body panels, that’s about it. GMC also doesn’t sell any model unique to it. They are all Chevrolets under the skin and identical to what you can get at the Chevrolet store.
Out of all the GM brands the retention would be best with GMC gone, the majority would go to Chevrolet. GM could ensure they do by sending them a rebate specific to them on a new Chevrolet vehicle and other steps as well.
There is no need for GMC, it must die.
Yeah trishield, I’m sure your right. But how much is more than usual? GMC is apparently the only thing keeping Buick alive, so if you kill it, you might as well kill Buick. So you lose what, say 40% of your GMC sales, a helluva lot of your Buick sales, to what end? GM had/has too many brands, but at the end of the day, GMC may well be the only brand that actually makes them money and isn’t tainted by mediocrity in the public’s eye. I can tell you it’d be a lot easier to sell my wife on a Terrain than an Equinox… that’s silly, sure, but it’s still something GM has to deal with.
At any rate, it’s too late to kill it now. They had their window and they didn’t pull the trigger. Now that they’d have to pay all those Buick/GMC dealers off, the argument against GMC is much harder to make.
Reminds me of a conversation with cousin of mine about 25 years ago when we were teenagers. Shows the average consumers’ understanding of brands. She had bought a used Dodge Colt, which gave her all kinds of trouble. She got rid of it and then declared to the rest of the family Dodge is junk and she will not buy another Dodge. I pointed out to her the only thing Dodge was the glued on badge, the car was a mitsubishi. No matter, She would not buy another Dodge. I watched with amusement over the last 25 years as she owned a succesion of vehicles, 2 of which were a Plymouth Minivan, and a YJ Jeep, both of which she was very happy with. Good thing She avoided Dodge!
Meh, just rebrand the Chevies as "GMC-Chevrolets" and eliminate the product and dealer redundancies. Sort of like Stutz Bearcat.
Compound names inbue a touch of class, right?
GMC customers would flock to Chevrolet. When the Plymouth brand died, we did internal analysis looking at Neon sales (Dodge Neon and Plymouth Neon, same car). The sales were constant. Internally we assumed that if we didn’t do a product for say Dodge, we estimated we’d recover somewhere between 50-75% of the customers on another brand with a similar product. For GM with virtually identical products at each showroom, it is much more akin to the Neon example at 100%.
It’s time…
Professional grade crap.
And if Chevy was “like a rock” wouldn’t Granite be a better name for a Chevy product?? Oh yeah, that would make too much sense.
John
Good lord – was that a real ad? What the hell? That was unbelievably painful – more like that and GMC can be executed for crimes against humanity.
Years ago when “professional grade” came out I thought it had to be a joke. Professional grade what, celebrity assistant or nanny?
GMC as it is serves solely as a channel through which to buy tarted-up appearance package Chevy trucks. This lies in complete juxtaposition of GMC’s historical role within GM up until sometime in the late 80s/early 90s.
The only way GMC makes sense is for it to become “professional grade” by offering a line of no-nonsense Work Trucks. Add an appearance/tart option on top of the Chevy line of personal/family trucks. Problem is this won’t go over well with the idiotic separation within the GM “sales channels” because vinyl-floor pickups and Buicks look stupid on a lot together. Keep Chevy trucks pedestrian/personal, slide GMC’s work trucks into the Chevy Channel, and merge Buick/Cadillac dealerships. Buick and Cadillac are now different enough in content, feel, and appearance to coexist. This also allows further dealer culls because BPG had separate dealers from Chevy, which are separate from Caddillac…this at least cuts them down to two channels.
As long as they keep the GMC front end and hood in place of the Chevy on the new trucks.
TexasAg03, you summarized the whole problem in one sentence. If the only difference between the two brands is the “front end and hood”, you don’t need two brands. Honestly, there are more trim differences between a 1965 Chrysler Newport 2-door hardtop and the same-year 300L 2-door hardtop than there are between a Chevrolet pickup and its GMC stablemate.
Was that an Old Navy commercial?
Buick and GMC are looking more and more lost. If you can’t say what the brand does in one word, it probably shouldn’t exist:
Toyota: mainstream
Lexus: luxury
Honda: mainstream
Acura: luxury
Nissan: mainstream
Infiniti: luxury
Ford: mainstream
Lincoln: luxury
Chevrolet: mainstream
Cadillac: luxury.
I really don’t understand the point of this Granite concept being a GMC. Isn’t the whole idea for the different GM divisions to compliment each other instead of compete against one another? I mentioned on GMI (and haven’t been banned yet) the concept of going back to GM ads that say “Class leading [feature]*” followed by “* Excludes GM products.” What a waste of time.
That being said, I like the direction they are going with Buick. The new Regal is a stunner and if they can bring the GS to market without completing ruining it they might have something good on their hands.
That being said, the only way this works is if they can take Cadillac up market, as in the CTS is their base model. This new XTS concept they launched in Detroit, while a nice enough looking car, isn’t the answer.
The xB. The Soul. The cube. The HHR. All targeted towards “people 35 or younger’…and yet the majority of people I see driving them are middle-aged and elderly!
The xB. The Soul. The cube. The HHR. All targeted towards “people 35 or younger’…and yet the majority of people I see driving them are middle-aged and elderly!
I’m starting to wonder if that’s intentional: target a brand at the youth market and watch old people flock to it.
Meanwhile, try targeting a car at the elderly…
Boxy cars that happen to be frugal on gas, spacious and relatively easy to park and climb in and out of? With cars like the Grand Marquis going extinct, you’d have to wonder what type of car will end up being the Gray Hair Special of the auto market……and these look to be a great fit.
+1 The only people I see driving HHRs, Scion xBs, Honda Elements and the like, are retired folks.
My wife’s parents are pushing 80 and recently replaced their Grand Marquis with an HHR. As their bodies are shrinking with age, they found it harder and harder to see over the hood of the Grand Marquis.
This old saw again? GMC is not getting axed, it will go down with the ship.
GMC is all about moving Sierras at non-Chevy dealer locations. The “Professional Grade” tagline and GM’s talk about GMC being upscale is BS. The Silverado and the Sierra sell for exactly the same amount. Same with the vans, the other real work trucks. Does anyone really think that Chevy couldn’t also sell a Denali version of its trucks that would sell for the same amount as GMC’s? GM is crying right now about not having enough Equinoxs to sell. Perhaps this wouldn’t be the case if they weren’t promoting the Terrain so much on TV. Alan Mulally is showing the automotive world how to create momentum by focusing on one brand name. GM seems to have missed the lesson entirely and is moving back to its old ways. Maybe GM is just incapable of shedding its 100 year old business case legacy?
In 2009 GMC outsold Buick and Cadillac combined. They tend to be more heavily optioned than their Chevrolet cousins which brings in more revenue to GM. At this point the only way Buick dealers are viable is being dualed with GMC since that’s where the majority of their business comes from. General Motors would have to be insane to cut off this revenue stream.
General Motors would have to be insane to cut off this revenue stream.
As mentioned before, anyone interested in a GMC will buy an LTZ-grade Chevy truck/SUV. This is a non-issue for anyone but Buick dealers: people who’d already be in a new career if GM went through a conventional bankruptcy.
Just like the 300,000 Oldsmobile buyers did when they all bought Buicks, Chevrolets and Pontiacs after 2004 when Oldsmobile died? Oh..wait a minute it didn’t quite work out that way.
Sajeev, the question is why didn’t they buy an LTZ in the first place? GMC sells in very good volumes and at a higher price than Chevy. Shutting down GMC would be a terrible idea. Besides, how can everyone be so certain that the GMC buyers would go to Chevy?
GMC is still around for the same reason Mercury is still around. Although we know that everything they sell is a rebadged Chevy, and though most of us who follow this see GMC as the first logical place to cut useless brands, the GM guys had a problem.
First, GMC provides a lot of volume, much more than Mercury. A lot of that business would go to Chevy, but not all of it, by a long shot. Second, and most important, killing GMC would be expensive, because you kill all of the remaining volume at the dealers. There is no way Buick could survive as stand alone dealers, so every dealer would have to be compensated a la Oldsmobile. GMC thus serves the same function at its dealers that mercury does at LM stores. GM did not have the guts to do this during the bankruptcy, and they cannot afford to do it now. So, GMC will stay for the forseeable future, becoming the new Olds/Pontiac/Saturn/Hummer. GMC will stay, not because it makes sense from a philosophical standpoint, but because there is no practical, easy, or affordable way to make it go away.
The only reason General Motors sells GMC badged vehicles is the additional revenue stream and traffic it creates for Buick dealers. As a stand alone brand, Buick simply would crash and burn.
Isn’t that what we all used to say around here about Pontiac?
As a GMC owner, I hope the brand continues. I see it as a viable brand but I’d like to see GM change its positioning.
Anyone who says that GMC owners will automatically buy a Chevy if the GMC brand disappears either doesn’t own one or doesn’t know what they are talking about. Yes, we know the GMC vehicles are the same as Chevy’s. It’s the brands and the brand image which are different. We don’t look at the two brands as the same thing; we view Chevy as a direct competitor to GMC, not a twin sister. Same as Ford, Dodge, etc.
I bought a GMC because I wanted a GMC. If I had wanted a Chevy, I would have bought one instead. If GMC goes under, Chevy will have to compete for our business exactly as everyone else.
Personally, I’d like to see GMC go more Professional Grade. Limit Chevy to 1/2 ton and 3/4 trucks. Everything 3/4 ton and up is sold as GMC only. All service bodied trucks are GMC only. Suppliers like Reading, Knapheide, and Adrian Steel only install on GMC vehicles. If you want a family hauler/leather lined gentlemen’s truck, buy a Chevy. If you want a work truck or service van with bins and racks, buy a GMC. Large markets can support both brands at independent dealers, small markets get Chevy and GMC dualled. The GMC brand gets its own identity, GM doesn’t lose any sales, cost to implement is minimal. How hard can it be?
Yes, we know the GMC vehicles are the same as Chevy’s. It’s the brands and the brand image which are different. We don’t look at the two brands as the same thing; we view Chevy as a direct competitor to GMC, not a twin sister. Same as Ford, Dodge, etc. I bought a GMC because I wanted a GMC. If I had wanted a Chevy, I would have bought one instead. If GMC goes under, Chevy will have to compete for our business exactly as everyone else.
And there it is.
No offense meant, Uncle Bo, but I don’t get the reasoning, and whether I get it or not really doesn’t matter. As long as GM has die hard GMC customers like Uncle Bo, there’s no incentive for them to dump GMC, or even differentiate the line much from its Chevy twins. It doesn’t have to make sense, and being a GM creation, it surely doesn’t have to make money.
If GM had taken a real bankruptcy and started with a semi-clean slate, maybe a Chevy/Cadillac plan would’ve happened, but it didn’t, and here we are, with more of the same.
GMC makes money. It’s a profitable division. That is one of the reasons it survived and Pontiac didn’t. It may not have high volume, but neither did Saab or Hummer or Saturn.
GMC is a division that has loyal customers, low product development costs, and solid profitability. Those looking for reasoning just found it.
The point I, and I believe many others, are making is there’s not much reason to maintain a division that’s entire product line is a trim level. It’s little more than a shell game, and whatever meager profits the GMC trim level eeks out, how much better off would GM be without the associated overhead and dilution of effort, especially if GMC sales slip?
If Buick dealers need GMC sales to survive, and GM simply refuses to absorb Buick into Cadillac and Chevy, maybe they could offer a special Chevy Lite package for those dealers to cover the GMC trim level? Or GM could stop just short of killing off GMC and maintain it as an ersatz division within the Chevy organization, with nothing more than some badges and literature development in GMC’s budget.
It all seems like arranging deck chairs on the Titanic to me. Serious reform of GM would’ve included killing off massive duplications of effort, of which GMC is clearly one.
Love your idea Uncle Bo. Good analysis. GM is so lost with their strategy right now with the GMC Aveo it kills me. As a side bar, one of the reasons GMC lived is that GM does their analysis at the vehicle level, which points to how you allocate cost. GMC on their books is very profitable at the vehicle level and therefore they kept it. Was it profitable because the development costs are all bourne by the other (now dead) brands? Where does all of that overhead now go? (no hints now).
GM’s “strategy,” such as it is, for GMC only seems to make no sense, because GM was not forthcoming about why it kept GMC. The way the franchise laws work, the GMC badge is the only way GM can keep selling trucks through non-Chevy dealers.
These laws (a) compel massive termination payments upon franchise cancellation; (b) allow neighboring dealers to protest an additional dealer of the same line-make; and (c) compel a manufacturer to sell its full-line (not just selected truck models) to dealers of that line-make.
Since GMC only exists to get around the dislocation of the franchise laws, of course it sells only re-badged Chevrolets. With great respect for Uncle Bo’s comment above, it is hard to believe many buyers care whether they have a GMC or a Chevrolet. I will say, however, that his ideas about how to differentiate them would make sense, if GM actually gave a s*it about a coherent market presence.
Now that’s a compelling explanation for GM’s (in)action. GM dealt the GMC card themselves, and now they can’t afford to get rid of it. How would Chapter 11 affect those franchise agreements?
They tried that thing where you scan a barcode and go to a website back in 2000. It didn’t really work that well.
http://en.wikipedia.org/wiki/Cue_cat
GMC’s unibody products should be eliminated. However, Chevy Trucks should be split off from the Aveo brand and combined with GMC at truck-only dealers. Later on, redundancies in truck models could be reduced.
Maybe GM could euthanize the GMC brand and keep GMC customers by offering a different, more subtle, grill for upscale Chevy trucks. Keep the big ass bow tie and chrome strip for the big belt buckle crowd while putting less chrome plated plastic on the front for the upscale suburban customer market. The Tahoe and the Sierra both look more upscale than the Silverado because of their more restrained use of fake metal.
I stopped by the NAIAS this morning to see what excited the crowds. There were more people at the GMC Granite concept than by the Chevy Cruze.
TTAC’s widely shared opinion is wrong. GMC should survive. It makes a good profit for GM. Can someone tell me why it should go away?
GMC buyers won’t automatically go to Chevy. If that was the case, when GM shut down Old’s, they wouldn’t have lost that volume. Also, while Buick does need more volume than it has had in the past 5 years, it is starting to get more volume with better products. Enough good products and GMC and Buick will be fine.
Now, I am not sure that the Granite will make a good GMC. I think that is absolutely up for debate, but then again the small box vehicles are not for me.
Agreed, but the Granite should NOT be a GMC model.
TTAC’s widely shared opinion is wrong. GMC should survive. It makes a good profit for GM. Can someone tell me why it should go away?
Because they’d probably still make a profit as Chevrolets.
GMC buyers won’t automatically go to Chevy.
I doubt that. GMC is not Oldsmobile: Olds had arguably the best product for the money of any GM division at the time and GM offered nothing compelling for Olds customers to move to. When Olds was canned, ether was either mediocre Chevrolets, mediocre Chevrolets with objectionable styling (Pontiac), “rental luxury” Buicks and overpriced Cadillacs. If I really like my Aurora or Intrigue, I’d have bought an import, too.
GMC, on the other hand, is basically a GMT900 trim line these days. If you bought one, it’s because you probably liked something about the GMT. Are you seriously implying that GMC buyers would opt for F-150s, Rams or (gasp!) Tundras? Really? Unless your purchasing criteria is “whomever the nearest dealer is”, I doubt it.
I’d give the buying public a little more credit than that.
Forget the Chrysler socks ad: that was the worst car ad I have ever seen.
Anyone else seeing the Terrain flash ad (not the YouTube ad) right next to the “GMC Must Die” headline? Priceless!
But yes, GMC must indeed die… and take the rest of Government Motors with it, hopefully.
This is the worst car ad I have ever seen. What is ironic is that I was just thinking about how the Terrain’s current ad campaign is one of the best GM has done in a while.
New TTAC article idea: Worst Car Ads (start the list with this one). Of course, follow it up with Best Car Ads; I nominate the early ’80s VW ads with the lab coated engineer obstacle courses.
In this neck of the woods, GMC was derisively referred to as a “bosses truck”. Too bad because at on time (pre-war) they actually did produce severe duty light vehicle chassii to outside body builders like taxi outfitters.
GMC provides volume for Buick dealers who could not exist as stand-alone stores, so as long as GM keeps Buick…
Plan “B” could be to brand all trucks as GMC whether they are sold by Chevy dealers or other GM brands. The advantage would be that you could avoid supporting the redundancy costs of badge engineered clones and embarrassments like the Granite.
It is now nearly impossible to find a stand alone buick dealership. I wager there are probably a dozen in the entire nation. If you are dealer selling only 2 Buicks a week you definitely need the addition of GMC vehicles in your showroom.
GM executives – Stupid as fsck since 1980. I can’t believe how bad that ad was. Makes me want to cry/and or vomit.
I hate to link to C&D, but back in 2003 they may have had a smidge of credibility? Anyways, to highlight how crazy the car buying ppublic is, a lady who’s in a GMC Jimmy and wants to trade for a Chevy Trailblazer and ends up in a Lincoln LS V8. Yeah.
http://www.caranddriver.com/features/03q1/car_buying_is_easy_when_fido_barks_the_numbers-column
I don’t know why people buy GMCs, but they do.
Personally I don’t like Chevy’s style, but I like the look of the GMCs. Except the Terrain.
It cost them little to offer a different look vehicle that sells tens of thousands a year. At a profit. Creating traffic in an otherwise deserted showroom. What’s the downside again?
You’d have to buy into GM’s cost accounting voodoo to think that GMC’s are/were sold “at a profit” insofar as the company was driven into bankruptcy. You’d also have to ignore the supply chain costs of the GMC branded variants and assume that GMC buyers would not buy a Chevy truck despite the minimal product differentiation.
The downside was that not enough people bought or bought into that value proposition.
Part of what’s going might be Buick’s strong presence in China, which makes them a keeper, which means they either need GMC to keep the U.S. dealers afloat or they need to merge with Chevy or Caddy as cdotson suggested. My guess is that Chevy is too big to be bothered with Buick and Cadillac is happy remaining independent and pure. Must admit when I walk into a Caddy showroom the atmosphere is pure ritz. Walk into a Lincoln showroom and there’s Mercury. Tends to make folks feel that Lincoln is just another division rather than a unique club. Back to GMC… they need to wake up and get in the game, no more hiding in the cubicle drawing a paycheck. Same with the folks who run the division.
‘Urban Utility Concept’. Funny, as a kid we called these ‘station wagons’.
Please tell me the ‘Aveo-based’ part was just you making sure we were paying attention.
The only rational thinking at GM in the recent past was when they filed for bankruptcy. The only thing more rational would have been Chapter 7.
GMC has never been anything but a grill with no reason for existence. Even Mercury makes more sense. In theory.
GMC Cars is one part of General Motors & General Motors gave a group of young designers the responsibility to make a car that would appeal to young, social, active urban professionals like themselves. They decided to make a vehicle that would be more at home going to nightclubs and hauling outdoor gear than picking up loads of lumber or towing boats. It’s almost a foot shorter than the Chevy Cobalt, making it maneuverable on narrow urban streets.
GM should continue the Vibe under the GMC name. They should keep the design the same but use a GM or Opel platform. The Yamaha engine that was in the original GT would be great.