The Trouble with GM – part 1

I’m going to sound like a broken record here, but there’s little choice, I’m afraid.

What I can do, though, is publish opinion other than mine that echoes my thoughts on what I see might be the future for Saab amid GM’s three pronged premium sector strategy.

This post concerns Hummer and will be quite short, but hopefully it’ll serve to illustrate what I believe is at the core of the problem.

A few days ago, I published some points from a chat that 1985Gripen had with Jan-Willem Vester, Corporate Comunications guru for Saab USA. Here’s a piece from that article:

GM see themselves as being blessed with two other luxury brands in Cadillac and Hummer that they need to exploit further around the world. They consider that with all three premium brands working to attract different premium buyers, they’re offering a greater variety within the luxury segment.

Fair enough. I can see that. What I don’t see is the necessity to push them all into all geographic sectors. The evolution of Cadillac into a global brand, according to JWV, has been in the pipeline for around a decade now so it seems to be clear that this was a decision made in Detroit a considerable time ago for world application. I think it’s also fair to say that GM’s Hummer thoughts have been along the same lines.

I don’t have anywhere near the same concern about Hummer as I do about Cadillac. Whilst I think they’re quite stupid, they’re also vastly differentiated from Saab. So no problem there for me.

But I found these two articles interesting. They point out what is essentially a geo-cultural difference that I think may prove to be more of a threat to GM than they realise.

The Hummer H3 is now being produced in South Africa to service the right-hand-drive markets that GM are going to push the vehicles into. Here’s Bob Lutz in a Hummer H3 looking quite satisfied that he and his fellow decisionmakers aren’t a bunch of boneheads on this issue:

lutz.rhd.hummerh3.jpg

GM have unveiled the Hummer H3 to the British market this week in a purpose-developed dealership in Manchester. Obviously the thought of getting Wayne Rooney into one of these is quite appealing.

Here’s how Edmunds Inside Line (US publication) covered the event:

It’s a watershed moment for one of the most iconic American brands. General Motors on Monday took the wraps off a prototype right-hand-drive Hummer H3, which signals the Detroit brand’s commitment to making serious inroads into foreign markets…..

….”We are determined to build on the brand’s unique recognition in Europe and especially here in the U.K.,” said GM Vice Chairman Bob Lutz at the opening of a new Hummer showroom here.

Reporting the company line. I don’t know if it’s more of an indictment on GM or Edmunds, but anyway….they consider it to be a watershed moment (and well it may be).

I’ll point out here that Saab Great Britain have also used this week to release their 2007 Biofuel budget. Why is this significant?

Because this week the Chancellor of the Exchequer, Gordon Brown, hands down the UK Budget and in that budget document will be significant taxes for larger vehicles. Saab are hoping to get the BioPower some favourable tax treatment and their green-briefcase publicity shoot at least shows some awareness of the times.

In stark contrast to Edmunds’ take on the Hummer launch, Car Magazine – published in the UK where the vehicles are being launched – covers the event as follows:

Could Hummer have picked a worse week to launch its first UK dealer? The press release landed on our desks the same morning as the headlines were filled with news about this week’s Budget and stringent new taxes to clobber the heaviest polluters. Errr, that’ll be cars like the Hummer, then.

I wish Bauer Millet in Manchester the best of luck, but I can’t help wondering who will walk in and buy its wares (apart from the occasional Man Utd footballer with more cash than common sense). Chancellor Gordon Brown will this week raise the UK’s VED annual tax disc to £400 and beyond for cars in the highest polluting category, and there’s already a growing stigma attached to driving big 4x4s. They don’t come any bigger than the Hummer, even the new ‘smaller’ 3.7-litre H3 model.

And then there’s this bit.

It’s the hummer…..sorry, the hammer hitting the nail right on the head.

Has there ever been a more misguided launch? Hummer’s official arrival in Europe is surely the result of a strategic decision taken years ago in the US, before the cold winds of the eco-lobby entered the mainstream political arena. Environmental issues are changing far faster than the arcane product planning mechanisms of traditional car companies, and if GM were to reassess the situation today, I bet they wouldn’t launch such a dinosaur in Europe today.

Now, as I mentioned, I do believe that Hummer quite possibly has a legitimate place due to it’s complete and utter differentiation from anything else in the GM premium portfolio. But I’ll continue to argue that the same boneheaded logic, the same unwillingness to change a poor decision made years ago that’s apparent in this instance is a driving force behind the great Cadillac push.

But more on that later….

(and Eggs, your point about Caddy in the JWV post was the best one I’ve seen so far – thanks for giving me plenty to think about)

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