Why Popular Brands Like Pontiac Fail While Unpopular Ones Like Buick Stay afloat
The automotive industry is a complex and ever-evolving landscape, filled with brands that rise and fall depending on various factors. Why do popular car brands such as Pontiac go bankrupt when unpopular brands like Buick, Lincoln, and Saab stay active for decades?
Understanding Car Brand Discontinuation
Pontiac, similar to similar brands like Mercury, Plymouth, Oldsmobile, and Saturn, represents a specific brand under a larger parent company. These brands are no longer actively producing cars with the same name. For example, Pontiac is only a brand name of General Motors (GM), much like Mercedes-Benz, Audi, or BMW. The brand name is a label, but the parent company (in this case, GM) still stands strong and viable.
GM's Decision to Discontinue Pontiac
When GM decided to discontinue the Pontiac brand, it did so as part of a broader business strategy to streamline its presence in the United States. This decision was partly driven by the financial performance of individual brands versus the overall profitability of the company. In 2010, GM officially ended the production of Pontiac vehicles and phased out the brand, which led to discontinuation in all markets. Ford, Chrysler, and GM have similar histories of discontinuing underperforming brands, focusing resources on more successful and profitable ones.
The Case of Saab
On the other hand, Saab, owned by GM, faced a different fate. When Saab's passenger vehicle business was shuttered by GM, it was because GM decided to revamp its portfolio by selling off unprofitable segments. No buyer was found for the Saab brand, resulting in its discontinuation. However, it's worth noting that the "Saab" name could still be resold, much like the "Bugatti" name, which has changed hands multiple times.
Strategic Consolidation and Consumer Choices
When a company decides to discontinue a brand, it often seeks to reduce costs and realign its focus on more profitable segments. GM, for instance, decided to discontinue Pontiac along with Oldsmobile, likely aiming to consolidate its US brands into more established ones like Chevrolet, GMC, Buick, and Cadillac. This consolidation helps in maintaining a coherent brand message and streamlining marketing efforts, ultimately saving money in the long run.
These decisions are not just about financial performance, but also about market demand and brand perception. Popularity in the automotive industry can be fleeting, and companies often need to pivot to maintain relevance in a highly competitive market. By focusing on more popular and profitable brands, GM and other automakers can better serve their consumers and shareholders.