General Motors may phase out one of its weaker car brands if sales fail to meet projections, company vice chairman Bob Lutz reportedly said on Wednesday.
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According to Reuters, Lutz told a Morgan Stanley automotive conference in New York that GM’s Buick and Pontiac are both “damaged brands” due to lack of investment over the years, and the automaker is working to correct that with an array of new vehicles.
But if some of its brands fail to meet sales projections, “then we would have to take a look at a phase-out. I hope we don’t have to do that. What we’ve got to do is keep the brands we’ve got,” Lutz said, according to the news agency.
Reuters noted that financial analysts have said for years that GM has too many brands to support, even with the recent gradual phase-out of the Oldsmobile brand, and particularly so no with its weaker US sales.
The report said sales for both Pontiac and Buick have lagged in recent years, but GM is in the midst of a $US3 billion investment in new vehicles for both brands which will get four new vehicles this year, including the Solstice roadster, Torrent SUV and the G6 mid-sized coupe [plus the G6 convertible; the first modern US-made 2+2-seater with a folding steel roof] .
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By GlobalDataReuters also noted that GM, which last week cut its earnings outlook for 2005 by as much as 80%, posted a 6% drop in US sales for the first two months of the year as its US market share fell to about 25%, far below its share of 27.5% for all of 2004.
Analysts reportedly said last week that GM’s March sales could fall as much as 10% in March, while Asia-based foreign automakers would continue to gain US market share.
Automakers are expected to report US sales on April 4.
In New York, Lutz said GM will post relatively flat US sales for March though performing much better than expected, Reuters reported.
“I think we’re going to be just about even, our best guess at this point. Either a percent over or a percent under,” he reportedly said, adding: “It is a substantially better month than January or February, and it looks like the whole industry is up.”
