The Pontiac-Oldsmobile Lesson

  • February 17, 2024

GM went from selling seven brands (Chevy, Pontiac, Oldsmobile, Buick, GMC, Cadillac and Saturn) to selling just four (Chevy, Buick, GMC and Cadillac) today. A similar winnowing happened at Ford, which used to sell Mercurys. And at Chrysler, which used to sell Plymouths – and maybe soon just Dodges, now that Chrysler hardly sells Chryslers, either.

Why the winnowing?

Because the brands that were winnowed were not selling anything meaningfully different. By the time Pontiac and Oldsmobile were retired, they were just selling badges. More finely, rebadged Chevys. A few cosmetic and pricing tweaks aside, they were all the same vehicles.

Just the same as a Plymouth Neon was also a Dodge Neon.

It doesn’t make much sense to sell the same thing as a different thing. It wastes resources trying to get potential buyers to believe they are buying something different. And most buyers won’t buy it, regardless. They knew a Plymouth Neon was the same thing as a Dodge Neon. Just as people knew the last “Pontiac” Firebird was a rebadged Camaro.

There is a lesson in here somewhere.

For all the badges that think they’ll be able to survive selling the same devices.

If Pontiac couldn’t sell rebadged Chevys, what makes GM think Buick and GMC can survive selling rebadged Chevy devices? There is already very little meaningful difference between the “GMCs” sold by that brand and the Chevys sold by . . . Chevy. A GMC Yukon is a Chevy Tahoe. Slightly different styling – and a higher price – but otherwise, it’s the same thing. And both of them are the same basic thing as a “Cadillac” Escalade. These still sell because there is some prestige attached to the badge. But that – and what it costs – are about all you’re getting for your money.

The luxury badges – such as Cadillac – are likely to find it harder to make a sale when they’re selling the same devices as everyone else, including the non-luxury brands. At least the “Cadillac” Escalade still comes standard with a V8, which makes it very different from a device such as the Rivian R1. But what will make the Cadillac something other than just a badge – and a price – when it is just another device?

I tried recently to explain this existential threat to luxury brands especially to a Mercedes-Benz media relations manager, after I got taken off the list of journalists accredited to have access to Mercedes vehicles for test-drives (in order to write reviews of them, something I’ve been doing weekly for about 30 years now). Mercedes was unhappy with the reviews I’d written about some of its latest devices, including the EQE – which I didn’t test-drive much because I couldn’t drive it very much, due to the the serial hassle and time-suck of trying to instill a charge into the device.

You can read what I wrote here and decide for yourself whether it was unfair.

The point, though, isn’t whether Mercedes is happy or unhappy with what I wrote about the devices it sells. The devices it is being effectively forced to sell, even though it (and the other luxury brands) pretend they’re just offering the very latest thing. Pretending there’s a market for what they’re being forced to try to sell.

The point – or rather, the question –  is: When all a luxury car manufacturer has to sell are devices, what would make people want to pay luxury-badged prices for them? Consider Mercedes’ devices. They have big touchscreens and a big plastic three-pointed star in the grill to let you know it’s a Mercedes device.

But other devices have the same things. Well, not the big plastic three-pointed star in the grill. That is still uniquely Mercedes. Everything else isn’t. There is no longer anything particularly luxurious about climate control, heated leather seats and very good stereos. They are practically expected standard features in cars that don’t cost luxury brand money.

What you used to get for luxury brand money were V8 and even V12 engines, which weren’t common or even available in other-brand models. Now those are all-but-gone from even the luxury-brand vehicles that remain (that aren’t yet devices) and the six has become the new exotic engine, since you can’t get them anymore in the Toyotas and Hondas and Chevys and Kias that used to commonly come standard with or offer them as options.

When the sixes are gone and everything’s a device ad they’re all pretty much the same – except for the big plastic three-pointed star in the grill (and so on) – what will be the point of spending “Mercedes” (or BMW or Audi or Lexus) money to get what amounts to the same device except it looks a little different from other devices and costs a lot more?

Pontiac and Olds (and Plymouth and Mercury) might be able to answer that question, if they were still around to answer it.

. . .

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