GM's current phase-out of the Pontiac brand is reminiscent of its Oldsmobile phase-out of 2000. Before its demise, Oldsmobile had a storied history. It was the longest-surviving American car brand – 103 years. More than 2500 other brands died during Oldsmobile's lifespan, up until GM pulled the plug. Oldsmobile created the first mass-produced, gas-powered car. It was the first to produce cars from a coherent design, rather than simply adding functionalities to a carriage.
Bright Beginning
Oldsmobile was a charter member of General Motors in 1908. The brand flourished by its reputation of technological innovation, bringing high-performance vehicles into the mainstream. In the 1920's it was called the "King of Chrome" because it was first to incorporate chrome-plated trim. In the mid-80's it was the third-most-popular car brand in the US. But its brand name became a problem as its customer base aged and died. To show it was also a car for the young, the company tried many variations on the same marketing theme – "Youngmobiles" and "Not your father's Oldsmobile.'' But no marketing in the world could overcome a brand name with the word "old" right up front.
Oldsmobile started its long decline when it gave up on technological innovation in favor of homogenization. Brands increasingly began to look alike. In the late 1990's, GM decided it could no longer sustain 3 brands in the same market – Oldsmobile, Pontiac, and Buick. In 1999, the year before it got axed, Oldsmobile sold 352,000 cars, still considered "relatively robust." But the economics of three brands proved too much and the decision was made. The last Oldsmobile was produced in 2004.
Oldsmobile Lessons Learned
Axing Oldsmobile was not without its own hue and cry, however. Oldsmobile dealers, many of whom had personally invested in their dealerships, created a legal firestorm. The cost of the controversy has been estimated at $2 billion in settlements and write-offs – this to get rid of a brand, theoretically saving the company money.
GM assumed that Oldsmobile customers would switch to its other brands, especially Buick, with which Oldsmobile had the most overlap. That assumption proved woefully mistaken. Either due to the lure of cheaper Asian sedans or distrust and anger at GM because of the shutdown, customers moved to rival car companies and GM sacrificed sales volume to the tune of hundreds of thousands of cars.
Today, as GM phases out Pontiac, it would do well not to repeat the mistakes it made with Oldsmobile.
Ronnie Tanner also writes about
used Oldsmobile engines and
used Oldmosbile transmissions.
