GM Shifts Brand Focus from BIG to Small
GM announced a big change today brought on in part by rising gas prices and a shift in consumer demand from gas guzzling vehicles to smaller, more fuel efficient cars. While American auto manufacturers have been resistent to this shift, GM finally gave into the changing market today by announcing its brand and manufacturing focus will shift away from trucks and large SUVs to smaller cars. Unfortunately, with this shift comes a loss of 8,350 jobs with the impending closure of several GM plants.
While the news is not good for those employees, it is good for the environment as GM has finally developed a new small car that the company claims could get 45 miles per gallon. What remains to be seen, however, is the price tag. Currently, buying a hybrid vehicles requires a higher upfront investment (aka, they just cost more) than a gas-powered vehicle. We’ll have to wait and see if consumers ultimately get that money back in their pockets with a decrease in cost for hybrid vehicles as demand continues to increase.
What would really be unfortunate for consumers (but is highly likely) is if car manufacturers refused to drop hybrid prices despite growing demand, instead opting to line their pockets (and please shareholders) with that premium price tag. Remember, small cars don’t bring in as big of a profit margin as trucks and large SUVs do. That money will have to come from somewhere going forward.
As part of the shift, GM announced it will either sell or “remake” its Hummer division and plants that remain open will begin making more small cars and fewer trucks and large SUVs.
What do you think? Is this shift long overdue? Do you think it will be a permanent shift as GM spokespeople report? Now, let’s take guesses as to where the lost revenue from those big trucks and SUVs will come from.
Image: Flickr
Tags: GM, General Motors, GM plant closing, GM small cars, Hummer, GM SUVs, GM Trucks, consumer demand, hybrid cars, fuel-efficient cars, branding strategy
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POSTED IN: rebrand
3 opinions for GM Shifts Brand Focus from BIG to Small
Scott
Jun 4, 2008 at 4:13 am
It’s about darn time! I’ve never understood why someone would need a big gas-guzzling Escalade, Hummer, Suburban or Yukon, but then again, I’m depending on the consumer making an intelligent decision.
Chris Wilson
Jun 4, 2008 at 7:51 pm
The downward spiral of the auto industry as of late is a great example of an inability to kill a cash cow today in order to lead the market of the future. All the auto makers are taking baby steps. The company that has the guts to commit to fuel efficiency and jump out there will win the pot.
Theresa
Jun 4, 2008 at 10:32 pm
while I am 100% for anything that will help the environment, we should be careful with what is presented to us as a better solution. The hummer actually has a smaller footprint than the pruis when you take in to consideration what it takes to produce the vehicles. The battery alone in a pruis is an issue. The hummer was created off of an existing platform and needed less developmental waste on the front end. Yes they guzzle gas and there are better options but we should all get more information before jumping the gun.
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