Analysts: New GM Has Too Many Brands

Just after it emerged from bankruptcy, General Motors decided to leave behind important brands such as Hummer, Pontiac, Saab and Saturn, and is now preparing to get rid of the German unit Opel. GM wants to focus on only four core brands, Chevrolet, Cadillac, GMC and Buick that are believed to be successful enough to pave the company's way to profit. But analysts think that such a market is from its very beginning destined to failure.

Why? you might ask. Because four brands are still too many, they said, with two models, sharing the same features but marketed separated by different brands, fighting for the same buyers.

Auto Consultant Maryann Keller told the Advertising Age that 34 models, the estimated number of cars GM wants to rely on by the end of 2010, isn't the real problem for the former bankrupt American automaker.

"The problem isn't that 34 is too many models; it's the number of distinctive models," she said. "It just feels like the same old GM."

And she's right. The aforementioned source pointed to Chevrolet Traverse, a model which is also sold as rebadged versions of Buick - Enclave and GMC - Acadia. So here we are, three of GM's four core brands are selling the same product. "The problem is they overlap and compete for the same buyer," Keller added.

So what's the solution? Susan Jacobs, president of Jacobs & Associates, thinks that General Motors should go even further with its brand killing and continue business with only two brands: Chevrolet as its mass-market brand and Cadillac as a luxury range.