Friday, January 16, 2009

Drop the Chevy Label?

The AfternoonRanter carried on today about which label GM will drop.

He concluded that it was Chevrolet.

Really?

As of August, GM was selling 6800 Chevy-labeled vehicles/day. They were selling 900 Pontiac labels/day, 650 Buick labels/day, and 750 Saturn labels/day.

So RadioMouth suggests that GM drop the label comprising TWO-THIRDS of their ANNUAL SALES?

Sure. After all, when a company has excess factory capacity, the best thing to do is under-utilize most of it, not just some of it.

Why RadioMouth will never be a capital-finance kinda guy...

9 comments:

Disgruntled Car Salesman said...

I heard him and thought, "Doesn't he know that they are looking extensively at dropping Saturn already?"

He certainly isn't too bright some days...

Phelony Jones said...

Don't you mean RadioFace?

Andy K. said...

Wow.

Chevy? That's by far the most popular brand GM owns.

RadioMouth = The guy on WISN from 3-6, right?

Looks like I won't be tuning into him anymore.

As DCS said, I'd be voting Saturn, Saab, or one of the many smaller ones.

Deekaman said...

while I don't agree with dropping Chevy, he made some good points (I listened to it on the way home today). If indeed Buick is an overseas cash cow (China), it makes no sense to drop it. As for Saturn, I might be more inclined to spin Saturn off and let it sink or swim. Dumping pontiac seems to make sense as well.

In the end, the only way to see what makes sense is to look at the balance sheet for each division. And I'm not privvy to that information.

Dad29 said...

Obviously, P&L counts. In the case that Buick makes mega-bucks, simply keep Buick for the PRC market.

But you also have to look at corporate ROA as part of the equasion. GM can't just sell those plants and properties too easily. (Who would BUY them?) So maximize ROA by cranking Chevvies.

And if you pull Buick from this market, then gussy up a Chevy real pretty-like. Maximize profit/vehicle.

Deekaman said...

There IS significant brand loyalty to Chevy, but it is largely because of the trucks. It's the same truck as the GMC, just a different label. And I'd bet a huge majority of the 6800/day is trucks. Move them to GMC and close out Chevy. The plants won't be used anyway, as GM's market share continues to crash.

Dad29 said...

What--Hertz, Avis, National, (et al) don't count?

There are a zillion or so GM products in rental-car lots. Most of them have Chevy labels.

I agree that one can switch marques and make Chevy trux into GMC trux, by the way. One truck division: GMC.

John Foust said...

Is there some unwritten rule that prevents you from using his actual name?

Dad29 said...

No, John. Only when he talks like a sausage.