2010 marks the last year of the Pontiac brand in the US market, after a prolonged period since 1925 as a brand within the General Motors group. Pontiac was of course known for its performance cars, particularly the so-called ‘muscle’ cars of the latter 1960s and 1970s, with a bargain price.
Over time, however, the performance aspect became less distinct or indeed relevant. The oil shocks of the early 1970s and the resultant escalation in petrol costs was a significant blow to Pontiac, while strengthening Federal emissions standards started to erode the utility of the large, unrestricted engines that were a feature of the brand. Always a minority presence outside North America, Pontiac slowly started to lose its value even within the domestic market. The revival of the 1980s around the famous Firebird Trans Am model did not in fact presage a long-run return to market favour. Perhaps also there was some neglect by GM during the 1990s and 2000s as attention switched to the high-margin light truck business.
Of course, it is possible to examine the corporate history of the Pontiac brand in more detail and identify many unique and special reasons why the brand ultimately failed, and why GM decided that it would be Pontiac rather than Saturn or even Buick that should be the one offered to the government as a sacrificial lamb in order to stave off complete financial collapse.
But the bigger picture is also interesting, not just for historians but for the future. First, it is notable that as the US automotive industry came under increasing pressure from Japanese, European and Korean imports and transplant production, so many brands were eliminated. From 1987 the US market lost the following:
- Merkur;
- Passport;
- Asuna;
- Geo;
- Plymouth;
- American Motors (renamed Eagle and phased out later);
- and Oldsmobile.
Despite the benefits of scale economies, brand synergies and platform strategies the major US OEMs were unable to justify the continued inclusion of these brands. Admittedly there has been some growth in the brandscape also, for example with Saturn, but the underlying trend is clear enough.
The question now is, will that history be repeated elsewhere? In general, car markets around the world have many brands; typically between 30 and 50 different nameplates for consumers to contemplate. Globalisation might bring new brands to the mature markets of Europe and North America as OEMs from India or China become more ambitious, or as the nascent electric vehicle segment lures new entrants to try their hand. Few other product markets, if any, appear able to support this many brands.
More fundamentally, GM and others have found that the long term effort of sustaining brand differentiation is almost impossible to keep up. Ultimately, engineering differentiation is degraded and the substantive differences between brands that share platforms and components become reduced to styling cues and random ephemera.
Volkswagen Group has won many plaudits for its multi-brand manipulation of core engineering cost savings, but this is like cheering a marathon runner after only the first mile is completed. It remains to be seen whether VW Group can go the distance.
Dr Peter Wells is a Reader at Cardiff Business School, where he is a Co-Director of the Centre for Automotive Industry Research and leads the automotive industry research programme within BRASS, also in Cardiff University. Dr Wells is also a director of AutomotiveWorld.com’s sister website AWPresenter.com. He can be contacted on wellspe@cardiff.ac.uk.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
