The Future of Pontiac

Saturn, Saab and Hummer will go away, but a re-focused (and poorer) Pontiac will stick around in the new General Motors

12.14.2008

By Brendan Moore

GM executives have already said that, should GM itself survive, Pontiac will become a “boutique” brand, selling only a few high-performance models at most, and in limited volumes. The models will be unique to Pontiac and not shared by the other GM brands.

The powers-that-be at GM have also stated that Pontiac will get a very small amount of marketing money and corporate support in the future. The assumption at work here seems to be that whatever Pontiac sells, the vehicles will pretty much have to sell themselves on the allure of their bang-for-the-buck performance.

No need to dwell on the obvious; that is, that that sort of market strategy is a tough one to pull off. It would be tough even for a brand that has already established its performance chops out in the world. Imagine if Porsche or BMW had 80% of its respective marketing budget taken away tomorrow – they might find a substantial amount of sales missing from their general ledger by this time next year.

And Pontiac has not been associated with performance in the North American public’s mind since the Sixties/Seventies.

If GM can make that whole “cars that sell themselves” premise work, they actually have a very good start in terms of product. The two cars that Pontiac has now that will be unique to Pontiac are the G8 sedan and the Solstice convertible. The G8 is a Pontiac-only model now, and the Solstice will be Pontiac-only after the Saturn brand folds up its tent and leaves the GM family, which GM has said it will do (either through a sale or as a result of closure) in the near future.

In terms of performance-to-dollar ratio, the G8 is good when you’re considering the V6-powered base version, great when you’re looking at the V8-powered GT version, and superb when you’re a player for the soon-to-be-here high-powered (V8) GXP level. I’ve said it before, and I don’t mind repeating it: I owned a 1996 BMW 540i and the Pontiac G8 GT is definitely a better car for a lot less money than what that 540i cost in 1996. Note that I didn’t say the 2009 Pontiac G8 GT is as good a car as the 2009 BMW 550i (BMW’s current V8 sedan sales leader). That’s because it’s not. BUT, when you compare the MSRP of the Pontiac G8 GT, or the higher performance Pontiac G8 GXP, to the BMW price tag, the performance-to-dollar ratio tips way over in the Pontiac’s favor. Of course, the Pontiac comes with no prestige attached to its nameplate; the BMW shows up with a wagonload.

Pontiac had originally intended to produce a Sport Truck version of the G8, scheduled to have been offered for sale in Fall 2009, which is a modern version of the Chevrolet El Camino, but who knows if that will happen in light of GM’s current financial travails? When this model was announced last year, the national economy and GM’s finances were in much better shape, and even then, I predicted to my colleagues that GM would sell less than 5,000 units a year of the Sport Truck, so I can’t say that I see a bright future for the Sport Truck in the future economic environment.

The Solstice is another matter. It doesn’t punch above its weight as consistently as the G8, but it is a very credible player in its segment. It’s also very attractive, at least from my subjective point of view. The Solstice also has some intriguing performance possibilities inherent in its “Kappa” platform.

Although the Solstice is only available currently with a turbocharged four-cylinder engine, the platform was engineered right from the start to accept both a V6 and a small-block V8 engine. If Pontiac is going to be a minor player with minor volumes in the GM galaxy, then surely no one is going to mind a few thousand Solstices with V6 and V8 power under the hood being produced, right? It’s not like those small volumes are going to screw up GM’s corporate compliance with CAFE. And it terms of performance, we’re talking the potential equivalent of a modern-day AC Cobra for not a lot more money than the current model.

Furthermore, Pontiac will soon offer the Solstice as a very pretty fastback coupe. For those of us that generally do not want any convertible as a daily driver (I raise my hand), this makes the Solstice a lot more appealing. Not to mention that closed coupes have much more rigid vehicle structures than convertibles, which is very helpful if you’re going to pump a lot of horsepower through that platform.

So, not a bad start for Pontiac if they’re going to go the boutique performance route with their cars. But what about a couple of more models?

Well, when Saturn goes away, the Opel lineup will be up for grabs in North America. Saturn was rapidly turning into Opel West, and if they disappear, Pontiac could cherry-pick the Opel lineup for whatever they wanted. Opels are expensive when you get into the performance versions, but that’s OK if you’re a low-volume arm. If the desire is to keep Pontiac free of any front wheel drive cars, then I suppose Opel would be out (unless all wheel drive was acceptable, and then perhaps an Opel model could be fitted with AWD and sold here in North America by Pontiac), but that is to be determined.

There are other RWD platforms within GM; the Corvette and the Cadillac CTS platforms could certainly be used, even if they had to be decontented, but that may not fly within GM. Besides, then you get into the shared platform issue.

Of course, the current two RWD platforms Pontiac has could always be updated and improved for whatever new models they might want.

Regardless, I can see how turning Pontiac into a boutique brand might work from an operational and product standpoint. It is difficult, however, to see how they might sell enough cars in the early years of their new brand strategy without adequate marketing support. It will take a fair amount of marketing dollars to keep the brand alive until you can get enough believers in your performance credo so that you can live off of your performance reputation and your new improved brand image. Unless GM intends to give Pontiac a pass on volumes for years to come while they slowly build up their new reputation off of a steady stream of low-volume (but great) product and not very much marketing.

COPYRIGHT Autosavant – All Rights Reserved

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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5 Comments

  1. The other confusing issue for Pontiac from a product planning standpoint is that neither of their unique performance-oriented vehicles – the Solstice or the G8 – are supposed to last beyond one generation. The G8 is likely to be a one-generation nameplate, ending at the end of its model run around 2012, and the Solstice’s Kappa architecture is not going to see a second generation; it costs too much for the volumes of cars that these cars are sold in.

    Not like this would be an unprecedented move by GM if they didn’t, but I genuinely wonder if GM actually has a plan for Pontiac going forward. It’s safe to say that it would be wise if the stopped rebadging Chevrolets as Pontiacs, though – G3, G5, Torrent – if they want this brand to be a true niche of interesting vehicles rather than Chevrolets with red dash illumination and knockoff BMW-like grilles.

  2. I would love, love, love to see Pontiac become a successful seller on low volume performance cars. Real, honest to god performance cars that could run with the best in their class from the rest of the world. But I don’t GM can carry it off, even if they can get enough money.

  3. This approach does continue to give a ‘in’ to the product range from Holden, HSV and Opel….

    Think about it….Holden & HSV product is essentially paid for because they were developed for local consumption, low US volumes are very OK due to low build capacity and so there’s not much cost involved unless the marketer’s get involved..especially if Pontiac adopts the Holden family look for the G8

    This way the US market could get all four performance versions for the Holden RWD family – sedan, wagon, ute and the long wheel base sedan – instead of just one. Then HSV provides the ultra perfomance versions of the above plus their boosted Opel Astra hatch.

    At the more far out unlikely end of the crystal ball….the prospect of Pontiac money and a regular export volume may also:
    revive the Torana concept; or
    encourage the addition of Elfin products to the Pontiac line

  4. I don’t care if Pontiac ends up being a model that has unique cars; perhaps all of GM should make cars unique to Chevy, Pontiac, Buick and Cadillac–just like the “old days”. Let’s face it, Buick and Cadillac are for the “older” crowd; GMC is a Chevy with just a couple of small differences; Chevys are for ??? Just don’t eliminate the Pontiac completely!!!

    I have owned a 2000 Grand Prix and currently own a 2006 Grand Prix and even though I still don’t understand why they would eliminate it–they replaced it with a G8, I know–The Grand Prix was such a good car (I actually think it was great). I can’t see why it was dropped. Both the 2000 and the 2006 cars handled well even in deep snow. I’m not crazy about the new design (2004 and beyond), but they at least took the best of the 2000 Grand Prix and made it perform even better. I only wish that they would bring it back (under Grand Prix) and return the supercharged V-6 like the one in my 2006 Grand Prix. It has enough power to fool you into thinking that you have a V-8 under the hood, and it gets great gas mileage. Please produce great cars again so that the old motto “We build excitement, Pontiac” can mean something again!! How can anyone see excitement in a Torrent?

  5. First of all, GM needs to fire it’s marketing staff. They made a huge blunder in trying to market a Holden as the new GTO. The Holden was a good powerful car, but in naming it the GTO, they made a mistake. They should have named it Bonneville, Gran Am, Lemans or something else. Pontiac at the time had the Gran Prix and they could have simply increased the performance of the G.P. and named it the GTO, as it happened originally in the sixties. GM still has it head in the sand. Obviously it has to get rid of Hummer, let go of SAAB and figure out something with Saturn and sadly Pontiac. But why, of all their car brands, does GM insist on keeping Buick and GMC? These are the two divisions that make no sense at all. Buick is rather Bland and GMC just takes away sales from Chevrolet. Besides the truck market (GMC’s sole market) is what got GM in trouble (over reliance) in the first place and it is a dying market. I would have rather seen Buick go away instead of Oldsmobile, which had better looking cars then, but it didn’t happened. Now Pontiac is dying and Buick still lives on. Buick doesn’t even have a coupe. Let’s hope Buick picks up production of the Solstice and one of the coupes, since Buick doesn’t have any sport in it’s lineup.

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