Dead Brand Pool 2014: The Brutal Retreat

The most successful brands in our industry don't have much meaning to them. Toyota, Chevrolet, Ford, Hyundai, Kia, all of these are names that wouldn't evoke much of any imagery had their manufacturers never existed. Mercury and Saturn are popular planets that make you think of space and the futuristic pursuit of those faraway places. Acura should be quite accurate and precise. Rams are tough. Infiniti pays homage to the outer limits of capability and performance. Yet all of these models experienced failure, or ultimately failed, due to the key essential ingredient within any brand's reputation. Product. Scion now finds itself on the edge of irrelevance due to a series of bad products. Although I believe that Scion is essential to Toyota's long-term performance in North America, other experts have plenty of good reasons to disagree with me. The most obvious loser these days is smart, which has turned out to be a failure par excellence. You didn't need a brilliant iQ or bat 500 with our prior features on dead brands to figure out why. Bad product will always be to cars what bad loans will be to the banks. A risk free opportunity to shed debt, liquidate assets, and drink deeply in the vassals of government loans and grants. Doubt me? You should, if the automaker you are considering is headquartered in Europe. Opel, Fiat and Peugeot appear to be suffering a decline that is, in part, due to their dependence on home markets that are stunted by an endless sea of bad governance and legacy costs. A lot of folks believe that European consolidation has been due ever since British Leyland got sliced, diced and sold to whatever foolish suitors were willing to buy their market sizzle. Those rotten stakes didn't add up to very much back then. Today the sizzle of a brand name means even less since the profit in mature markets may be non-existent. Now these victors of yesteryear find themselves competing against global automakers that are not dependent on mature and declining markets with little to no profit. Europe's long cold recession may only give VW the smallest of sniffles. While Opel, Fiat and Peugeot are now suffering with varying levels of flu like symptoms, and unprofitable products developed for a home audience that is simply not there. The historians among us may look back on the past failures of the three in North America and wonder, "Does a lack of success in major overseas markets eventually yield itself to domestic weakness?" If this is the case, does the 'new' GM and Chrysler stand even a shadow of a chance over the long run? As for Japan Inc., Mitsubishi seems to be tanking it here in North America… even as a Hertz special. Suzuki is hanging on in a near zombie state of North American product rot. Not too far away in India, Volvo and Land Rover are still not quite ready for a prime time hit. Should they pack up their star spangled tent and focus their limited resources on the emerging economic engines of East Asia and the Pacific Rim? Then we have the high end of the market. Too many names and certain pseudo-elite manufacturers are playing too many games with an information enriched public. The shakeout is already taking place. Maybach never could muster up the prestige of Mercedes. But how about Maserati? Will their social equity investments continue to yield a small dividend of increased sales? Or will the better funded competitors in Germany and Japan turn the beleaguered trident into an archaic pitchfork? Change in the global auto industry is always slow. You always see the dimming headlights well before the automaker sees the cliff. But time and money are finite, as is the future for some modern day manufacturers and their brands . It looks like nearly everyone will emerge from 2012 with a continuing lease on life. SAAB may even be revived. But how about everyone else by say… 2014? Who do you believe is already on the slippery slope to a depreciation hell solely reserved for orphan brands?   from The Truth About Cars http://www.thetruthaboutcars.com

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