New Models Not Breaking Through in Tough Market

We have a saying around here that new cars sell, meaning a new design or totally new model will usually draw in shoppers. Whether it’s thanks to a ridiculous amount of money spent on advertising, positive reviews in the press or just a head-turning man-on-the street reaction, these cars usually perform. However, some much-hyped new models are not selling well these days as Americans tighten their belts. Check out which models whose sales we found surprisingly lackluster for the month of May. 

Pontiac G8: 1,832 units sold
Last year at this time, the outgoing and completely outdated Pontiac Grand Prix, which the G8 replaces, sold 12,230 units. Let’s just say for the sake of argument that half of those were fleet sales (which is probably on the high side). That would still mean it sold three times as well as the all-new, very-well-reviewed Pontiac G8. For the past few years, GM loyalists have begged GM to build this car, but now it seems these people aren’t willing to part with their cash for this large sedan. The V-8 version gets 15/24 mpg and the V-6 gets 17/25 mpg, both near the top in the segment, but still not attractive in $4-a-gallon-gas territory. That could be one issue. 

2008 Volvo C30: 504 units sold
The staff at Cars.com found the C30 an intriguing alternative for VW GTI and Mini Cooper buyers. It exudes style and has Volvo’s famed safety aura. As the least-expensive model in the company’s lineup you think it would outsell the aging S40 sedan, which itself only mustered sales of 918 units. Read the review here.

Land Rover LR2: 500 units sold
The small, luxury SUV is well-equipped at $35,000 but saw sales drop 51.2% from last May, one of its first months on the market. Being generally well-liked by the press, more efficient than larger SUVs, and gifted with Land Rover looks, it seems like the right product at the right time. As one editor mused, “Perhaps the mildly affluent are hedging their purchases.” Read the review here.

Saturn Astra: 1,091 units sold
In one of its first full months on the market, the Astra has not taken off as the “entry-level” vehicle at Saturn. Last year, the heavily discounted and extremely outdated Ion sold 6,822 units. Both Mike Hanley and Joe Wiesenfelder wrote positive reviews of the two distinct Astra models, but others on staff thought it was too expensive, that it felt too heavy and that its controls were too baffling to be a hit. It seems early reaction from buyers confirms that. Mileage is decent at 24/32 and 24/30 mpg for either the two- or four-door hatchback equipped with manual or automatic transmissions, respectively. That’s better than the Dodge Caliber’s fuel economy. Like the G8, this is a car that was heavily anticipated by car enthusiasts.

Comments

[Cj]

Not surprised. This proves my point in in the Hummer article. GM needs to kill Saturn and Pontiac. If either of those cars were Chevys they would be selling at 2-3x the rate that they are currently selling at.

[Maxwell]

I don't know anything about any of the cars noted in the article. The only one I'd even heard of was the Astra.

You can't sell things if people don't even know about them. That means advertising. If nothing else, ads inform potential buyers of teh existence of a product.

Before this year, I cannot recall seeing ads on TV for Focuses. Then, all of a sudden, I saw all sorts of ads for the car. How have Focus sales gone this year?

One of the reasons that Toyota and Honda sell so many Corollas, Camrys, Civics and Accords is that they advertise them like crazy.

[Keith O]

I only partially disagree with Cj. GM DOES NOT need to kill off Pontiac It DOES need to get rid of GMC (Completely redundant), Hummer, and Saab along with Saturn. And it needs to do so YESTERDAY. GM could use the money it saves building and promoting these dogs on refining and promoting the other, more worthy products in the GM portfolio (Chevy, Pontiac, Buick and Cadillac).

[Dave T.]

I think GM's already announced plan of bringing Pontiac, GMC and Buick under one dealership roof and shrinking their lineups makes sense. They don't need to kill any of them. As each has had success, although Pontiac less so recently.

GMC is still the #2 selling brand for GM behind Chevy. A version of the new Saturn Vue for GMC but not one for Pontiac or buick makes sense so no new Pontiac Torrent.

Saturn is another issue as sales of their completely new lineup have not been stellar.

[ziggy]

If you count all the models under the GM umbrella they sell 73 models in the US while Toyota sells 33 and Honda sells 16. I really think it's time for GM to consolidate and downsize a bit.

[Cj]

Keith your comment...
"And it needs to do so YESTERDAY"
...was so true. But I personally I don't see the need for pontiac. All of it's models that matter (at this point only the G8 [which isn't selling]) can be put under the the Chevy umbrella. Just kill the impala and bring the G8 over as the RWD full-size that chevy needs. Buick needs to go as well. They don't really need buick because buick has no direct competition (unless you think the Accord EX-L or Camry XLE are worthy competitors, LOL). Chevy is the main stream brand, and Cadillac's the luxury brand. That's all they need. GMC is so redundant it doesn't make any sense. Bring that Compact CUV (Vue) to the Chevy brand and kill GMC. Saturn is just sad, that brand needs to die, today. Saab needs to be sold, and like I expressed in the Hummer post, Hummer needs to stay. Hummer has so much potential, and has such a rich history. All Hummer needs is a Compact SUV and a Subcompact SUV (for more details go to my post in the Hummer article:http://blogs.cars.com/kickingtires/2008/06/chevy-to-get-ne.html) to be be a huge success.

[Mart]

How on earth does Hummer have a rich history?? They have only ever produced 3 models. I'm really doubtful that you can compare them to the likes of Jeep or Land Rover.

Personally, I agree that GMC seems a redundant brand, but I think Pontiac and Saturn have a place in the market, given the right strategy and NO model overlap.

I dont see why Pontiac cannot become an American Alfa Romeo, making sporty cars, and I think Saturn could be essentially just sell Opels, giving them a distinct european flavor at US prices. That would leave Chevy to produce more American style vehicles.

The brands that need to go are Buick and Hummer. I dunno what to do about Saab. It doesnt really fit the GM brand family, but I'd hate the see it die as a brand but dont see who else would be interested in them.

[Amuro Ray]

It's all perception, folks. To car fans, and esp GM loyalists, they can tell, "oh this brand is for such, and that brand is for sthg else..." But to mass consumers, what the companies set out to be in the 1st place - that's what they remember. For Saturn - as I ain't a GM loyalist - I recall it being a no-frill, hassle-free, everyday use commuter/family vehicle with the SL1/2. Now the loyalists suggest to change it to a "European-like" brand? The high price of current Astra/Aura only drove away the previous no-frill consumers, yet upper middle class will not see Saturn as an European alternative thanks to the SL1/2. As for Pontiac - pretty much the same thing: CHEAP sports coupe that didn't really perform too sporty (think Gran Am/Prix). The G8, otoh, is much more than those - so again, mass consumers don't consider it the Pontiac that they know. Volvo - it's family tank image is so into everyone's mind - those who buy Volvo considers it only because of the safety. Then comes sthg that doesn't "look" THAT safe - doesn't take a genius to figure out what's gonna happen. LR2, I feel, is the casaulty of high fuel price. PERIOD.

[Cj]

Maybe "rich" was the wrong word, LOL. But they did have a history in the military (I know the current models are on Tahoe platforms, but the BRAND started as civilian versions military machines) and they have an image of being tough. With the right product portfolio, Hummer could be a huge success. Saturn and Pontiac are beyond saving IMO. After not having a purpose for so many years, I don't think it's worth the marketing dollars to resurrect those brands. If Hummer made a butch looking subcompact SUV the size of the first gen xB, there sales would go through the roof. Something small, iconic, flashy, and fuel efficient, that would appeal to the mini crowd would be perfect.

[Cj]

I just realized that my link was bad, so I'm just going to copy my comments from the Hummer Article here:

"I'm not a defender of Hummer, but wouldn't it be bad PR to kill Hummer? I think they should consolidate all of their mainstream brands into Chevy, before even considering killing Hummer. They need to make a H4 and a H5. A H4 could be the size of the Escape and a H5 the size of the first gen xB. Those would probably be very popular smallish SUVs. The only reason I think they should keep the brand is because I think they could make a resurgence in the market like mini did, if they come out with some unique products (You've got to admit a tiny H5 would be a real head-turner)."

Posted by: Cj | Jun 3, 2008 11:45:46 AM

[Jay]

The problem for the G8 and LR2 during the current gas problem is image. Pontiac and Land Rover are not viewed and not marketed as fuel efficient brands (performance and off/road). Anyone in the market for a new car is looking at the “value” brands like Toyota, Honda, Chevy, Mazda who have consistently advertised “high mpg” vehicles. Also, the V-6 version of the G8 should have been tuned to get better gas mileage than 21 combined. In comparison, a Toyota Avalon gets 25 mpg combined which is bigger and has more features. As for Volvo, the brand attracts mainly women and they are slightly over-priced ($25K for a decent C30). As for Saturn, they unfortunately have to compete with Chevy. They are also advertised as an “import” car company and they haven’t built a lot of customer loyalty with the earlier Saturns (ugly and unreliable). I think GM should be patient with the Astra and advertise it more than the current VUE.

[DL]

with regard to the G8, perhaps people want cars that gives off the image of being smaller in size, not just something that's fuel-efficient. regardless of reality, i don't think the brand "Pontiac" gives off the perception of "efficient" as opposed to "muscular gas burner," let alone the large-ish G8. That kind of goes along with what Maxwell was saying -- it's all about image.

With regard to the C30, i dare say that nobody wants a bite-sized little hatch that's overpriced for its size and doesn't exude the "safety" aura that other, larger Volvos give off. most people equate "big" with "safe." Volvo does NOT have any other advantages. Want European performance? get a BMW. Want reliability? people get Toyotas and Hondas. Want luxury? people get Mercedes or Lexus or Bentley. and the C30 is so ugly in the back, like the designer couldn't decide on what to do, so he/she took a sword and chopped off the top quarter ... and it's still bleeding

[Mart]

Beauty is all in the eye of the beholde rof course, but I think the rear of the C30 is probably the best executed bit of design on the whole car. It points a respectful eye towards older Volvos while still looking modern and purposeful. My problem with it, is compared to the Mini, the front end is just the bland S40. For the money they are charging for it, and given that the Mini is its main competition, you'd think they'd have stepped out and made the front end a little more daring.

The G* is simply struggling from being launched at a very unfortunate time. I think it is what a lot of people have been crying out for Pontiac to introduce, but it came right at the time when people are having to reconsider what they want from their cars.

[kj]

I knew this car would be a total loser. As I had mentioned at one time the G8 looks like a 1986 Grand Am. No one wants a RWD, lack of style, overpriced GM car. Case closed.

[Cj]

I don't know if you can totally blame gas prices for the G8's sales, because the Challenger and 300 are still selling better than the G8. Dodge sold over 10,000 challengers in march, and Chrysler sold almost 5,000 300s. Gas prices may be playing a part, but I think there maybe an even larger underlying reason why the G8 hasn't caught on yet (maybe the brand has something to do with it?).

The Volvo C30 is a great little commuter car, but compared to the MINI the C30 looks sterile. To me it looks good, but to the MINI crowd it looks like a 3 door S40. Not a good thing, since the S40 is a family sedan not a hip urban car like the MINI. Why isn't the C30 selling? IMAGE.

The Land Rover is hurting because of gas. Both the Acura RDX and the BMW X3 have more horsepower and get better gas mileage. That's likely what sways buyers to those 2 SUVs over the LR2. But if anyone hasn't noticed this whole segment, though small, is suffering.

The Saturn Astra is overpriced and it's gas mileage is very disappointing considering it's size. The civic (thought it's a sedan) get 36 mpg hwy and it's about the same size as the Astra.

[LM]

I'll agree with most comments above, except keeping Hummer. That's just dumb. Doesn't sell. Has poor image. Loses money. Any sane CEO would ax it.

The Astra is probably too heavy and expensive - not to mention no advertised. I've not seen one here in Boston, while I see at least 1-2 '09 Corolla's a day.

The G8? No one knows it exists. I think this is the problem. GM doesn't know how to keep a moniker alive - they just bring in new names and people don't know what the hell is going on.

[Cj]

There was a lot of internet buzz on the Astra and the G8. So you can't say they were unknown.

[Keith O]

Cj:

Here is what the GM brand structure would look like in my perfect world:

Chevrolet-- the volume division. It would sell everything, from small cars to full size cars to trucks and SUVs. It would be the "everyman" car company, just as it's always been. Its competition: Ford, Dodge, Toyota, Honda, Hyundai, Kia, Nissan.

Pontiac -- the "excitement" division. A little more expensive than Chevy, but every vehicle it builds has an obvious performance bias. No minivans, no crossovers, no SUVs. Just high-performance sports cars, coupes, and sedans. This would be the division for the true enthusiast. Think those with Porsche, BMW, Acura or Infiniti aspirations, but not quite as much money.

Buick -- the luxury division. Its target audience are those who would be looking at a lower-to mid-line Lexus, Audi, Volvo,as well as Chrysler and Lincoln. Precision and comfort will be Buick's forte, and it will do it with mid-size and full size sedans, ONE crossover (the Enclave is just freakin' great, man), a coupe, and a convertible.

Cadillac -- THE ULTIMATE. "The Standard of the World." Cadillac will move up and take on all of the big boys -- Mercedes-Benz, BMW,Jaguar, upper-line Lexus--even Rolls-Royce and Bentley. It will achieve this with a mix of small-to-full-size coupes and sedans, ONE SUV (I think the regular Escalade is plenty), and a sports roadster. Cadillac will showcase the absolute best of the best GM has to offer. And, of course, that greatness will trickle down to the other three brands.

I focus on those four brands because they make up over 80% of GM's total sales. It makes sense to dump Hummer, Saab, GMC and Saturn, because they really have no place in the market (especially hummer, which becomes more irrelevant each time the price of gas jumps further into the stratosphere). The money GM wastes keeping these brands alive would be better suited making and keeping GM's core brands world-class.

[Cj]

Interesting ideas Keith. Pontiac doesn't have the prestige element to compete with the likes of Acura, BMW, and Infiniti. Like what Amuro said people still see Pontiac as a cheap brand. If GM wanted a brand to compete with the luxury performance brands, they'd have to make a new brand, which GM is not in the position to do that now. Buick and Cadillac also don't have the prestige to move up market either. Buick will likely never be seen as a true Lexus competitor, because of there image. Have you seen some of Buick's commercial's lately? They compare the Buick LaCrosse to a Camry XLE. Obviously they are not trying to compete with true luxury cars. Cadillac barely has the image needed to compete with Lexus. How are they going to try to compete with MB and BMW if they can't even convince consumers that there at Lexus levels. I'm not saying Cadillac is a bad brand because the new CTS is very nice, but it takes more than one nice car to build an image.

[Mart]

The problem with fixed market positioning like this isn't the idea but that the manufacturers have such difficulty sticking to them.

As an example, Mercury is supposed to be the "high-end Ford" marque. But then Ford undermines it by allowing people to buy the equivilent Ford model with leather seats, satnav etc. If they want to reinforce the brand then everytime someone wants a Fusion with leather seats and high-end goodies they should be pointed towards a Milan.

It's slightly different with brands that are not so similar with their model offerings, but the Existence of a G6 undermines Pontiac's supposed performance car image. What SHOULD happen is if someone walks into a Pontiac dealer looking for an econobox they should be directed to the Chevy dealer (which should really be the same thing). That way GM still makes the sale, but enables the brand to be positioned more correctly.

This seems to me to be the main problem at GM especially, all the marques are treading all over each other. It's why Buick seems to be floundering without a market position - you can buy a Chevy Impala with almost as nice an interior as a LaCrosse. Same with Pontiac, with the G5 being just a Cobalt.

I know WHY they do it, but in the long run it's just weakening ALL the brands.

[Adrock]

I'm a bit surprised to see the comments about Saturn. I thought the whole idea was the to turn that brand into a slightly more upscale GM brand, with a Euro styling/handling of sorts, and the partnership with Opel was supposed to foster that. Many car enthusiasts are always calling for American car manufacturers to be like their European counterparts and I thought GM's move with Saturn was in response to that. For example, we'd all like the current Fusion to be Mondeo based instead of its own platform (well, Mazda6 based I guess.)

I saw an Astra on the road and was pleasantly surprised with the exterior. I've seen newer Saturn interiors and have liked them as well. Although I echo the comments about the weight and gas mileage. They should have either put those Ecotec engines you get the Saab's, 210HP with 30+MPG highway, or went with one of their 35/36MPG engines, or better yet, make a Green Line.

[AV]

Keith-

Buick does compete with Volovo and Lincoln, which are both "upscale" brands. People that look at Audi's of Lexus's are NOT going to even cosnider Buicks. Both makes are luxury brands, and Buick is just an "upscale" brand. All Audi and Lexus models compete with other luxury makes; MB, BMW, etc. Volkswagen is probably a better competitor. Also, Chrystler isnt anything. It just a Dodge with a different brand name and a sunroof.

As for Cadillac- It will NEVER compete with Rolls-Royce of Bentley. EVER. The big three German luxury brands (BMW, MB, and Audi) don't really even compete with them. People that buy those super luxury cars probably dont even know Cadillac exsists. They wouldnt even consider anything but an English car. I can see Jaguar competing with Cadillac, MB, and BMW though. This is where the entire lineups of both Lexus and Audi come in. None of that "half of the line up here and the other half here" garbage. They are both full-lineup luxury brands.

[Cj]

Pontiac's performance aspirations are almost a wash. Chevy already has a sports trim line (SS), so why does GM even need to have a whole brand of "sportified" Chevys? Pontiac doesn't even have a sports car flagship, like chevy (the corvette). All Chevy needs to do is make SS trims available on more models and kill pontiac. I don't think Saturn has any hope of recovery. If GM wants to bring Euro cars to the US, they should just bring the Opel brand. Saturn's brand image is too tarnished to sell high end European cars. If GM wants to continue selling euro cars in America, they should kill Saturn, and bring Opel to the US.

[Cj]

I know this isn't a Hummer discussion, but Auto Observer has an article about Hummer's possible demise:
http://www.autoobserver.com/2008/06/like-its-outsized-persona-hummer-wont-go-quietly.html

[Dave T.]

CJ
unless it directly contributes to the post itself please don't post a link. Especially to our competition. Thanks.