Its Muscle Car Glory Faded, Pontiac Shrivels Up

April 2, 2009

pontiac-muscle-cars

Pontiac models, clockwise from top left: a 1968 GTO, a 1970 Firebird Trans Am, a 2005 GTO and a 2001 Aztek GT. The earlier models had far more fans.

With its history of building muscle cars like the GTO and the low-slung Firebird, Pontiac had good reason to take pride in its best-known marketing slogan from the 1980s, “We Build Excitement.”

Lately it has been using “Pontiac is CAR,” a phrase more likely to catch the attention of grammarians than car buffs.

And on Tuesday, when General Motors asked the federal government for more bailout money, it also announced a reorganization plan that included demoting Pontiac to a “focused niche brand,” signaling that its lineup of vehicles would shrink and that it would no longer be a separate division.

To industry analysts and Pontiac’s longtime fans, the downgrade provides a case study of the product missteps that helped put G.M. in its precarious state, and a reminder of the dangers in straying from a successful formula.

“When you deviate too far from it, that’s when you run into trouble as a brand and a company,” said Jack R. Nerad, executive editorial director at Kelley Blue Book, whose 1968 Firebird made him feel “as cool as I could be.”

More than any other G.M. brand, Pontiac stood for performance, speed and sex appeal. Its crosstown rivals followed with similar muscle cars, giving Detroit bragging rights over the cars that Japanese automakers were selling based on quality and reliability.

Though still G.M.’s third-best-selling division, behind Chevrolet and GMC, Pontiac’s sales peaked in 1984, when it sold almost 850,000 vehicles, roughly four times as many as it sold last year.

G.M.’s chief executive, Rick Wagoner, said the company’s decision to concentrate primarily on Cadillac, Chevrolet, Buick and GMC left the company with a “comprehensive portfolio.”

By many accounts, Pontiac started to falter when G.M. pursued a cost-saving strategy of providing the same cars to different divisions.

It gave Pontiac vehicles like the TransSport minivan, and the Sunbird, Sunfire and Phoenix cars that were barely distinguishable from models sold by Chevrolet and Oldsmobile.

Pontiac also garnered unwanted publicity in 2001 with the Aztek, whose tag line declared, “Quite possibly the most versatile vehicle on the planet.” Its bulky looks landed it on lists of the world’s ugliest cars. Indeed, Aztek won top honors in that category from The Daily Telegraph of London last year.

Pontiac’s current plight is reflected in its Vibe, a well-regarded crossover vehicle that shares underpinnings with the Toyota Matrix, as part of a joint venture between Toyota and G.M.

While the Matrix holds 67 percent of its resale value after three years, according to Kelley Blue Book, the Vibe retains just 54 percent.

The Vibe, whose future is not clear but which was redesigned for 2009, is meant to appeal to the same age group that Pontiac’s muscle cars once did.

But many younger Americans, who were not around for Pontiac’s prime period, will not miss the brand as it shrinks, said Ron Pinelli, who is president of Motorintelligence.com, a company that tracks industry statistics.

To them, he said, “it doesn’t have any cachet unless they’re watching a late-night movie with Burt Reynolds,” whose film “Smokey and the Bandit” featured the Pontiac Trans Am.

But in its best years, Pontiacs were “highly styled and valued and really something,” Mr. Pinelli said.

Known before World War II primarily for its sedate sedans, Pontiac got a lift in the 1950s when G.M. used its cars on the racing circuit. Because of its “wide track” stance, Pontiacs quickly caught on with street racers, as well.

Tim Sampson, whose family owned a yellow Pontiac Grand Prix in the 1960s, remembered the Pontiacs that were used for drag races on President’s Island, in an industrial part of Memphis. “People used to get arrested,” said Mr. Sampson, a founder of the Stax Museum of American Soul.

Italian sports cars inspired another classic Pontiac in the 1960s, when the division’s new general manager, John Z. DeLorean, decided it needed a small, fast car modeled after a Ferrari. He hit on the name GTO — after a Ferrari coupe called the Gran Turismo Omologato.

The GTO returned this decade, as part of an effort to revive Pontiac. But G.M.’s Holden division in Australia built that car.

Its appearance barely echoed the original GTO, disappointing its core audience. It lasted only from 2004 to 2006, before G.M. stopped selling them.

The most recent efforts to breathe new life into Pontiac were put into motion by G.M.’s vice chairman, Robert A. Lutz, who will retire at the end of 2009. Known in the industry for his love of high-performance vehicles, Mr. Lutz had pushed the division to return to its car heritage.

On its Web site, Pontiac explains its new slogan more fully: “Pontiac is style. Pontiac is performance. Pontiac is culture. Pontiac is music. Pontiac is CAR.”

Now, G.M. will have to determine which Pontiacs will remain Pontiacs. So far, Mr. Wagoner and other executives have not given any indication of the company’s specific plans for Pontiac.

But unlike Saturn, which will be discontinued by 2012, G.M. does not have to dismantle a dealership lineup for Pontiac. Its franchises, for the most part, already have been grouped with Buick and GMC. Any future models, G.M. said this week, will be sold through this Buick-Pontiac-GMC organization.

“We’re the third generation, and we’re the last,” said Rick Zimmerman, whose family has sold Pontiacs in Pittsfield, Ill., since the brand came to life as part of its Oakland division in the 1920s. (Pontiac became a stand-alone division in 1932.)

Mr. Zimmerman, whose first car was a GTO, said hundreds of customers used to flood his showroom each fall when new Pontiacs — like the popular Bonneville, now a retired nameplate — were unveiled.

Now, despite positive reviews about the performance of some new models like the G8, he has trouble getting his customers interested in them.

“It’s been a good name, and had a lot of good cars,” Mr. Zimmerman said. “It’s tough to see it go.”


Ford Introduces 2009 F-450 Harley-Davidson, Cabela’s FX4

October 6, 2008

Ford realizes that most of its F-Series Super Duty customers buy their truck for work, not play, so the Dearborn automaker is giving them more standard options, more high-tech options, and two new special-edition trim packages. Model year 2009 will bring a new Cabela’s FX4 model for outdoor enthusiasts and the first-ever F-450 Harley Davidson model called the “Big Hog Daddy.”

The Cabela’s FX4 expands Ford’s partnership with outdoor-equipment company Cabela’s and introduces a special trim level to commemorate the partnership. Outside, the Cabela’s FX4 will be easy to spot thanks to its special two-tone paint scheme. The Cabela’s FX4 comes in Ebony, Oxford White, Forest Green Metallic, Royal Red Metallic, and Silver Metallic, all with Sterling Gray Metallic lower body accents, running boards, and wheel-lip moldings. Cabela’s trucks will also get Cabela’s badging and special mudflaps to complete the look. Inside, riders will be treated to either cloth or leather seats with the Cabela’s logo, all-weather floormats with the Cabela’s logo, wood trim on the dash, and lockable storage in the front console and under the rear seats. Ford’s internal documents show that 76% of F-Series buyers are also into hunting and fishing, so the company hopes this model will appeal to those outdoor enthusiasts.

For the first time, an F-450 will come with a Harley-Davidson package in 2009 known as the “Big Hog Daddy” (seriously). Like other Harley-Davidson F-Series trucks, the F-450 will have plenty of Harley-Davidson badges on the outside and the Harley-Davidson script on the side of the bed. Making it stand out even more are the blue flames emanating from the side vents and reaching down the side of the truck. Inside, the theme will carry on with blue flames on the gauges and instrument cluster, as well as perforated black leather seats, door panels, and center console with blue leather underneath that will show through the perforation.

For those who use their trucks for work rather than play, Ford is introducing several new technologies on the F-Series trucks and E-Series vans to make life easier for the businessman. Called Ford Work Solutions, they include an in-dash computer with wireless Internet access over Sprint’s Mobile Broadband Network. The computer, codeveloped with Italian automotive electronics giant Magneti Marelli, runs Microsoft Auto and allows users to access data on their home or business networks with a wireless mouse and keyboard and print them on a wireless printer. A system called Tool Link uses RFID tags to give users an up-to-the-minute inventory of all the tools and equipment stored in the vehicle. For company mechanics, Crew Chief is a diagnostic and telemetry system that keeps detailed maintenance logs and allows users to dispatch and track fleet vehicles remotely. In E-Series vans, Ford tapped Master Lock to develop a cable locking system to keep tools and equipment secure.

For 2009, F-Series trucks will also feature Sync, the popular in-car entertainment and communications system that Ford codeveloped with Microsoft, as well as the Voice-Activated Navigation System with Sirius Travelink. All Ford’s 2009 F-Series trucks will get at least one new standard option in every trim level. The base-model XL picks up standard A/C, Securilock and manual trailer towing mirrors. The XLT will get power heated towing mirrors, privacy glass, an integrated trailer brake controller, remote keyless entry, and Securilock standard. The FX4 trim level will now get PowerScope power folding, power telescoping mirrors, power seats, captain’s chairs, privacy glass, an integrated trailer brake controller, and Sirius Satellite Radio standard. The top-level Lariat trucks will get all the FX4’s goodies as well as a backup camera, a power sliding rear window, heated seats, molded running boards, and Sync standard.

Also for 2009, Ford will offer its “Tough Bed” sprayed-in bed liner as an option. The military-grade liner is backed up by a 3-year/36,000-mile factory limited warranty. Ford has not released pricing for any of these models or options yet, but is expected to do so soon.


Auto Sales Succumb As Credit Grows Tight

October 6, 2008

U.S. auto sales reached a 15-year low with a double-digit decline in September as tightening credit and a financial system in crisis appeared to overwhelm any optimism about moderating gas prices.

Sales of cars and light trucks fell 27% to 964,873 last month, down from 1.31 million a year earlier, according to Autodata Corp. The seasonally adjusted annualized selling rate was 12.5 million units down from 16.19 million in September 2007, the research firm said. It the Paris Auto Show, Ford Motor Co. Chief Executive Alan Mulally and General Motors Corp. Chief Operating Officer Fritz Henderson expressed pessimism about the outlook for 2009, saying sales were likely to be as low as the current year.

Most jarring for the industry may have been the severe drop for Japanese auto makers, widely considered the strongest players in the U.S. market, especially in the small-car segment. Hobbled by a weak truck and SUV sales as well as severe declines in sales for its popular Camry and Corolla models, Toyota Motor Corp. sales fell 32.3% in September. Honda Motor Co. dropped 24% and Nissan Motor Co. saw its North America sales tumble 37%. Those declines reflect the depth of the recession in U.S. auto sales as well as some strategic missteps, including Toyota’s recent foray into a struggling pickup truck sales market.

“Obviously, no one is immune to market shifts as dramatic as we have been seeing,” said Dick Colliver, executive vice president of sales for American Honda.

Toyota attributed its sharp decline to eroding consumer confidence as Washington battles to pass a $700 billion bailout plan to help restore lending. The company also blamed weak economies in California and in the Southeast, two regions where the auto maker traditionally posts strong numbers. “I think it certainly put the brakes on the consumers. We saw that on the luxury side. We had folks calling up asking for their deposits back,” said Don Esmond, Toyota senior vice president, automotive operations. “Consumers are worried about the value of their homes and their 401(k)s.”

The largest drop among the Detroit Three came from Ford, whose dealers reported total sales down 34% in September compared with the same month a year ago. Chrysler LLC saw a similar drop, with monthly sales declining 33%. The luxury market wasn’t immune to a general wariness among American consumers against making big-ticket purchases even as gas generally remained below $4 a gallon.

Ford sales analyst George Pipas characterized the turmoil on Wall Street as “tantamount to a natural disaster” but added that auto makers probably had as easier time boosting sales following the Sept. 11, 2001 terrorist attacks. Showroom traffic was extremely weak and sales fell off sharply in the last 10 days of September as consumers focused on the crisis on Wall Street and the debate over a bailout in Washington, Mr. Pipas said.

Michael Jackson, chief executive of AutoNation Inc., said tightening credit standards as a result of the nation’s financial crisis is choking off auto sales. A year ago, 90% of those car buyers with top credit ratings were getting loans approved. Today only about 60% get approved, Mr. Jackson said. “Consumers and businesses are in a very fragile place,” said Jim Farley, Ford group vice president for marketing and communications. “An already weak economy compounded by very tight credit conditions has created an atmosphere of caution.”

Bucking the trend, General Motors reported that its U.S. sales fell% in September, measurably better than its competitors. Much of that success could be tied to GM’s push for consumer incentives and a strategy that boosted fleet sales rather than sales to retail customers. For example, GM sold slightly more than 19,000 Malibus but 10,000 of them were fleet sales, which are generally seen as less profitable for auto makers and potentially damaging to their brand’s reputations.

GM’s sales chief Mark LaNeve said the company’s performance is good relative to the wider industry, but not indicative of a healthy auto industry. “A few years ago I would have jumped out the window with these numbers, and we’re on the 39th floor here,” he said in a conference call from GM’s headquarters in downtown Detroit.

Shares in Porsche Automobile Holding SE skidded amid tumbling sales in key European markets and as the German auto maker revealed its normally robust growth had slowed. Porsche, which is in the usually resilient high-end auto market, said it couldn’t give an outlook in the “present economic situation,” and shares in other European auto makers declined. Porsche shares fell €6.44 ($9.06), or 8.5%, to €69.36 in Frankfurt.