The Homa Files

Excerpted from BusinessWeek;, “Brand New Day”, November 28, 2008
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General Motors is looking at killing off three brands—Pontiac, Saab and Hummer.

Everyone knows that GM is over-branded. The problem has long been that the company does not want to have to pay dealers to fold the brands it does not need as it did with Oldsmobile in 2001. State franchise laws prevent a car company from simply ending a brand. Closing down Oldsmobile cost the company around $2 billion.

Saab is not thought to have any hot buyers. According to past conversations with GM execs, Saab Cars has never turned an annual profit for GM. It has, at times, made money in Europe. But those gains have always been off-set by losses in the U.S.

Saab is one of two Swedish car companies with limited interest from both consumers and investors. Ford, too, tried to sell Volvo earlier this year, and found no takers willing to pay Ford’s asking price.

Both Saab and Volvo are premium brands that have long had followings of people who place safety above all other vehicle characteristics. Saab has also attracted some performance-oriented buyers as the company has long offered turbo chargers in some of its models.

[Note: As previously posted, green buyers typically sort performance and safety down the list of buying criteria]

Volvo is on track to sell about 82,000 vehicles this year. Sales through October were down 28%. Saab is on track to sell about 20,000 vehicles this year. Sales were down 32% through October.

Edit by DAF

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Full article:
http://www.businessweek.com/the_thread/brandnewday/

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This entry was posted on January 6, 2009 at 6:30 am and is filed under Autos - Travel, Environment - Green, Mktg - Brands. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.