Today's Wall Street Journal (page B1, available online only to subscribers) reports that Washington, who now passes judgment on GM's actions, is suggesting that the GMC brand be sold or shut down. GM says that their strategy, which is to combine Buick, Pontiac, and GMC into one sales network, is unchanged. The issue is: GMC, which used to make trucks and buses, now has pickup trucks and SUVs as its bread and butter, but these are relabeled Chevrolets. So: does it make sense to keep selling what is basically the same thing under two different labels?
They give one example: the Chevy Silverado (2008 sales: 465,000) and GMC Sierra (169,000) are basically the same vehicle. The GMC version, marketed to commercial users, tends to have a higher resale value than the Chevy, which is marketed mostly to individuals. And Sierra sales dropped only 19% in '08, while Silverado sales were down 25%.
I'll talk more about how GM fumbled its brand management in a week or two, but just for now: if customers think GMC and Chevrolet are really distinct products -- if they have different expectations for those two nameplates -- then they are different brands. As long as the vehicles are pretty much identical, it'll be hard for GM to maintain that distinction, but perception beats reality, and it does make sense to keep the two labels.
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