General Motors recently announced that it is killing off the Hummer brand, after a sale to China’s Sichuan Tengzhong company fell through. The company did manage to find a buyer for Saab. This is part of bigger move by GM to drastically focus its brand portfolio, after having gone bust last year and been rescued by the US government.
Why did the Hummer brand die, but Saab survived?
Why Hummer had to die
Some times a brand is so out of tune with consumer needs and wants that its just not possible to save it. And Hummer looks like one of these.
1. Death spiral: sales have fallen so fast and hard, that its hard to rescue the brand. US sales peaked at 71,524 in 2006. But by 2009 sales were only 9,046, down 67% on 2008. Fewer sales means less marketing budget to spend, means less sales and on it goes.
2. Out of line with needs: Hummers were the ultimate in huge, gaz-guzzling vehicles, based on
the US military Humvee. As fuel prices soared on recent years, demand has fallen like a
rock.
3. Brand truths: there is a bigger problem with Hummer than just
the fuel consumption. After all, lots of other US vehicles also have
this issue. The whole story of the brand, a big and brash US military vehicle, feels out of line with the times. This brand story means that changes to make the product more acceptable, such as improving fuel consumption, would be hard to do and sound credible.
What Saab was rescued
Saab has also had its problems. But General Motors has had more luck finding a buyer for it: Dutch company Spyker Cars, as reported here. Saab feels like a brand that has much more chance of being renovated than Hummer
– Its a Scanadanvian brand that feels like it much more in line with the trend to being environmentally more responsible.
– Saab also has a much more solid brand story than Hummer, based on expertise in aeronautics and technical innovation.
Its always felt to me like a brand with some good product "Sausage" in the way of technology, but that needed some emotional "sizzle" in product design and communication. Perhaps Spyker can add this.
Benefits of focus for GM
Interesting to see how public GM is being about re-focusing on the core business. In a recent official press release they talked about "core brand sales" for Chevrolet, Buick, GMC and Cadillac being up 32% in February. They are focusing on these four brands, having sold Saab, and closing down Saturn, Pontiac and Hummer. So, early days, but the ruthless brand focus does show early signs of paying off.
In conclusion, sometimes a hard and ruthless look is needed on a brand to decide whether it has a strong brand story and can be rejuvenated, or whether the fundamentals are so flawed that killing it off is a better option.
