DETROIT -- Mark LaNeve is offering a wake-up call to General Motors' 300 stand-alone Buick and Pontiac dealerships: GM is downsizing its product lineup.
Buick-Pontiac-GMC dealerships will have a full range of products; stand-alone dealerships will not.
Over the past month, LaNeve, GM North America's vice president of vehicle sales, service and marketing, has explained his plan to nearly 3,000 dealers.
"We're not going to put a bullet to anyone's head saying you have to do this," LaNeve said last week during an interview with Automotive News.
But "we're not designing the portfolio for stand-alone Buick dealers," he said. "You might make it as a stand-alone if you're really good in the right market. But the business opportunity of all three is where you'll really see profits."
As of Jan. 1, Buick had 198 stand-alone dealerships, while Pontiac had 110. There were 168 GMC stand-alone stores. By contrast, there were 784 Buick-Pontiac-GMC stores and 245 Pontiac-GMC stores.
In an interview with Automotive News on March 23, LaNeve enunciated his plan to eliminate product clones. At the time, GM had just issued a downbeat earnings forecast. And during a question-and-answer session at the New York auto show, GM Vice Chairman Robert Lutz had called Pontiac and Buick "damaged brands."
LaNeve subsequently assured dealers that those brands would survive. But GM concluded that it had to accelerate its plans to eliminate product clones.
That plan has been "turbocharged in the last six months -- especially in the last 60 days," LaNeve said.
In the past, GM gave brands their own versions of the same vehicle -- creating an overlapping product lineup and confusion in the marketplace.
For instance, Buick offers the Terraza minivan, and Pontiac sells the Montana SV6 minivan. Meanwhile, Chevrolet markets the Uplander minivan, and Saturn sells the Relay. Those minivans are built on the same underpinnings.
In the future, LaNeve said, GM might not have minivans for Pontiac and Buick.
Chevrolet and Cadillac dealers expect to benefit from the Darwinian product strategy that is taking shape. Last week in New York, LaNeve outlined GM's plans for Chevrolet and Cadillac.
"Strong brands win; weak brands lose," he said during a speech to the International Motor Press Association. "End of story."
Successful automakers "are anchored by a great volume brand at one end and a great premium brand at the other," LaNeve said. "In our case, (that's) Chevrolet and Cadillac."
LaNeve's comments are borne out by GM's U.S. sales figures for the year to date. Despite GM's 4.9 percent sales decline through April, Cadillac is up 4.0 percent and Chevrolet is up 1.1 percent.
But not everyone agrees with La-Neve's approach. Conrad Darby, owner of Darby Buick in Sarasota, Fla., says, "If GM is adapting a strategy of survival of the fittest, I don't know if that helps dealer morale."
GM's product strategy makes sense to megadealer Jack Fitzgerald, who sells all GM brands except Saturn and Hummer at three of his 12 dealerships in suburban Washington.
"Chevy is doing OK, and Cadillac is doing better," says Fitzgerald, who has sold cars for 50 years.
Chevy, Cadillac prosper
The elimination of GM's product clones is "probably a good strategy," Fitzgerald says. "GM makes too many different cars. You can't stock all of them or focus on all of them. Reducing models will save money."
GM's old strategy of me-too products isn't working anymore for Buick, Pontiac and Saturn. Each reports declining U.S. sales.
Lynn Thompson, co-owner of Thompson Pontiac-GMC-Cadillac-Saab in Springfield, Mo., says his Cadillac and Saab sales are up substantially over last year.
But his Pontiac and Buick franchises are suffering, and his store's overall sales are down 20.0 percent from his original forecast. At a meeting last week of 20 Pontiac dealers from around the country, Thompson learned that other Pontiac dealers are struggling, too.
"Not everyone is making more," says Thompson, who is the former co-chairman of GM's national dealer council. "We get fat and sassy when things get real good. Only when things slow down do we start to pay attention."
Peter Brown, Gail Kachadourian, David Kushma and Jamie LaReau contributed to this report
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