Sure there is going to be some overlap - but the question is, when that becomes too much overlap. Skoda probably is cannibalizing some of VW's sales - but even in Europe, a saturated market, both brands have been growing both in market share and in absolute numbers.
Isn't that always the question? When is it enough? It is hard to compare Europe with USA, because Europe definitely is not a country. They had their own car makers and that is why they are to some degree regional. To ignore that is not accepting the multiple nationalities there. The US just doesn't have that circumstance. I don't think GTraav was ignoring that VW doesn't have some spread, but those brands are about specific regions to take advantage of the nationalism and brand awareness relative to the regions. That both brands continue to grow is a good reflection on VW's abilities, but at the same time (and isn't this always the case?) a poor reflection on the others' inability to give VW a good deal of competition. Toyota and Honda grew a lot the later part of the 20th century in the US, but it was growth not only by their own smarts, but the complacency and even ineptitude of the others.
One also has to remember that price is not the only thing differentiating brands. It certainly is one of the most important ones, but you can also differentiate by image, drive characteristics, design, etc.
Absolutely! And that is no different in the US. When people are able to consider brand image in their purchases... they have become a mature, wealthy society. It is a luxury to comtemplate preferences in products and the US has plenty of that.
Anyway, just wanted to dispute the opinion that VW somehow owns several "regional centric" brands, when it is in fact just one.
I'll respect your presence in Europe has better understanding of brands over there, but it sure is hard for me to swallow VW group as one brand. Opel and Vauxhall are definitely not one brand even though they are near identical. If it was one brand, there wouldn't be a need for SEAT, Skoda, etc. All you'd need is VW and that is not the case. IMHO... VW is the GM of Europe. The only difference is they're having a renaissance in success now whereas GM had their's the first 3/4 of the 20th century.
Quite a lot of the talks about the brand management problems of VW AG was basically "talk about nothing" by the media/press/internet/blogs/whatever. About 1 to 3 years ago, when the VW-Porsche takeover was in full swing, VW started going for MAN and Piech said something about being interested in Alfa, the number of brands started coming up. And people read "VW to own ten brands / eleven brands / a dozen brands" and then reacted by saying "Wow - thats more than GM ever had and look at how bad they are doing".
Yeah, people like to shoot arrows at the Big Dog or whoever is on top. That is nothing new. It didn't help that VW had what amounted to an arrogant dictator heading the business, but that is nothing new. Each dynasty has an enlightened person that is also demonized... right or wrong.
Especially because in the US, brand management (maybe because of the failure of the US companies in doing it well) basically became reduced to copying Toyota and wanting to have a volume and a premium brand, and nothing else.
Criticism is always based on our personal knowledge/experience and since the Big3's fall is what is most remembered by people today... it becomes easy to compare and armchair. If VW (or anybody else) doesn't follow the failures of history... be it GM or Studebaker... it is bound to repeat, right? And at the same time... if it doesn't recognize the successes that companies like Ford or GM or Peugeot had in the first half of the last century... that is arrogance. I have to think there are A LOT of business school studies that can be had during various eras of success and failures for many companies that can be read by today's and tomorrow's CEOs.
The fact is that VW's brands differ a lot from GM in its "bad days". More than half of them (depending on what you count etc) are either very, very niche brands (Bentley, Bugatti, Lamborghini), heavy truck makers (Scania, MAN) or a brand that basically noone knows is officially a seperate brand (VW Commercial Vehicles). And, the four "volume brands" (VW, Audi, Seat, Skoda) are only competing in one market anyway - in which they are rather effectively differentiated (with the problematic exception of Seat - where one would have to analyse if the problem is in the brand differentiation or just in the fact that the market segment for such a brand isn't big enough).
I don't think many even care about the exotics when discussing branding. That is an animal unto itself... with variables that definitely are hard for most of us to appreciate. :laugh: Why do you say it is "one market"? Do you truly believe nationalism plays no effect? You don't think Skoda has no value in its cultural brand? Or SEAT?
Regarding Opel - the problem is that it's brand image has basically been destroyed over the last couple of decades. Hell, they started out in the 60's being a far, far superior brand than Volkswagen. Their larger vehicles were regularly compared to Mercedes (though they never reached that kind of brand perception), etc. Yet they stopped building the bigger cars. The smaller ones had dramatic quality problems in the beginning 90s, Opel started going from one crises to another. Their marketshare in Germany has halved in the last 15 years, and all that talk about selling or closing them certainly isn't helping.
No doubt. I would like to know how they squandered such a lead myself. A lot of people will blame GMNA, but a lot of people have no idea how independent GMNA allowed divisions like Opel and Holden... and Saab... for a loooong time. It hasn't been until recent times that resources were more shared and responsibilities combined to reduce redundancy. Until recent times... Opel was more a division with many of its own facilities and resources and design... unlike GMNA which started phasing out the separate, independent divisions in the 70s & 80s and started the branding based on more shared/common hardware. Talk of selling, etc. didn't help, but that didn't initiate the slide. That occurred (like you noted)... well before.
It isn't impossible to get them back up to a higher level - but it would take years, focus, effort and a whole lot of money. All things that Opel doesn't have on its own and GM isn't willing to invest.
Sure. Turning around something like Opel is not easy and it's not something can do by itself. Neither is GMNA's turnaround possible on its own. A truly global company with many global resources wins when it can take advantage of every region's talents. GMNA is turning itself around because of its global resources, but definitely also because of (2) presidents' understanding. It is definitely within reason, but the difference between GMNA's situation and Opel's is government support.
1) There is a long-standing support for VW that hasn't existed for Opel, right? And for me... it is understandable given Opel's link to an American company. Personally I have no issue with VW's direct ties with what is essentially their society. But for Opel that is hard to overcome, no?
2) I personally have no problem with people wanting socialism, but it is not the best partner to companies that must operate in market-oriented businesses. I think this is Opel's (and Peugeot and Renault and BMW and MB and VW and etc.) biggest challenge. I think they can, have, and will continue to raise their product abilities, but without the relative freedoms to trim as necessary (like was done in GMNA over the last 5 years) the overcapacity... they just cannot survive let alone have a renaissance. The denial is strong in Germany (not just Opel). It is easy for people to always find blame elsewhere instead of home (demonize Detroit), but that same denial is what continues to destroy their brand. The difference with GMNA is that (to the angst of many in the union and salary)... trimming was allowed. It was not always fair, but it included everybody from CEOs on down. When Opel accepts that ugly reality it will have a chance. Whether Germany would decide to support such acceptance is another thing. I won't pretend to be some expert at this, but that is how I see it.
I can (from my european perspective) not comment all that well on brand perception in the US. I don't know how "low" Buick had fallen, or how much of that image they have restored now.
It's hard to fall lower than GM did (bankruptcy). Going any lower means joining the ranks of some of history's fabled, but lost companies. Restoring itself to sustainable levels is no different than any other comeback (i.e. It takes time, money, talent, motivation, vision, self-awareness, etc.)... plain and simple.
I would guess that americans are more forgiving then europeans, more open to up and coming brands, less traditionalist. Just look at the japanese success in the US for one thing.
I think you'd be wrong, no offense. The diversity of the US market IMHO only means it has a little of EVERYTHING. Forgiving? Bahhahaha! I wish. Open to new brands? Sure, but at the same time... very easy to dump a brand pronto! Traditionalist? Depends on where you are. The Japanese success was helped by American diversity and its engrained beliefs of liberties mixed with a nationalism that includes things Japan, German, Irish, Chinese, Canadian, Mexican, whatever! And on top of that... Detroit's era of arrogance and complacency. Not to mention many other factors that the Japanese (or other imports) have not ever had to deal with (legacy cost, etc.).
What are the core brands by your definition. Just from VW AG or every company? As has been stated above by Swallow Doretti (I think), Renault-Nissan are seperate companies with extensive tie-ups. Seat, Skoda, Audi, Bentley, Bugatti and Lamborghini are all companies on their own, which are just ~100% owned by VW. Same for "Adam Opel AG". As I have said, almost everything by now has to be centrally coordinated, but those subsidiaries all keep their own employes, boards, etc.
That is a rather big contrast (both legally and practically) to the "american way", where GM, Ford and Chrysler (iirc) structure their brands as divisions in one company.
You know... I'm not sure if I know where we are going with this discussion on brands and how they should be operated. :laugh:
Now, don't get me wrong. I am not saying that those brands could just easily survive when put on their own. They couldn't. But this sort of structuring has all sorts of implications when talking about what to do with a superfluous or loss-making brand...Anyway, go and ask a worker in a GM plant who they are working for (I did when visiting
) and they will say "GM". Ask that question in Ingolstadt, Bochum or
I know the answer and I believe that is the failure of Opel (because they never cared to be bought out by Americans in the first place) and GMNA (because they never... as far as history shows... could figure out how to include Opel into the GM Family). GM have been a global company for decades. The problem is... it hardly acted like one in terms of taking advantage of each region's capabilities to design and build the best in a consistent and sustainable manner.
I personally think the evolution of GM (and others) to this model of structuring (where brands are not independent houses and people like they used to be) is logical to GM's circumstances. Does it fit with everybody? No way, but not everybody shares GM's exact circumstances. There is not right formula for everything and I won't pretend to believe there is. And for anybody to think VW can forever follow its current strategies permanently is silly, too.
The search for constant efficiency demands evolutions like this. IMHO... it is that simple.
Ah - that might be were a misunderstanding is coming from...I wasn't really talking about this alliance per se, but just responding to several opinions that were (and usually are) proposed in this thread and threads like this. The ideas about cancelling brands (with the examples of Opel and Nissan) for example were proposed by Turbio! on page one of this thread.
Ah. Closures of brands of subdivisions or whatever you want to call it is no simple answer. Some of the best car companies faded for reasons nowhere near within their realm of control. I think it is easy for us to suggest closure sometimes, because we're all armchair quarterbacks to varying degrees.
Sure, the overall results of the markets clearly show a nationalistic tendency in car buying preferences. Moreso in Europe than in the US. That part of the answer was basically in response to the (often made, and again in this thread) idea to elevate Opel's brand perception upwards and to make way for Chevy below. I just wanted to say that, while it is possible as Audi showed, it also is very hard, takes a lot of money, effort, etc. And Audi's starting point was a lot better than Opel or Chevys...
I don't think anybody is trying to suggest Opel be Audi. I know my suggestion is for it to be Buick, which is not Audi in the USDM. That is Cadillac's job. So depending on MGT's grasp of reality in terms of sales volumes... it is possible to differentiate Chevy and Opel, because in the US for some models... Opel is Buick and Buick is not Chevy.
If they are working on it, they are certainly not doing a good job. I don't have any access to current brand perception studies (especially not europe-wide ones), but if you take market share and rebates as a sign of brand value, than Opel is still on the same downward slope that they have been on for two decades by now. Anyway, what I wanted to say was again in response to the idea of just "moving Opel upward". That is possible, but it certianly isn't fitting very well to the (repeatedly stated) goals of Opel and GM to just get into the black as soon as possible. The whole idea of moving brands around is not one that you can use for the problems that GM is facing in Europe, because it is way too long-term (and too costly for now).
Like I said... Opel is not Audi. Furthermore short term financial issues is the impact of overcapacity. Long term is finding a solution to the bottom end of the market for GME(Europe) that Opel have begun to evolve beyond. And that is Chevy (i.e. The same function it has in the USDM.).
Sure, but as of now, the wisdom coming from the US, especially in this "armchair-CEO" discussions of the car industry is to just get rid of brands, and position them in the "volume - premium" way that Toyota and Lexus have (very succesfully!) used. You can see this bascially in every blog, forum, etc. where those discussions are had. This "brands are bad" idea has gotten so big, that people are suggesting GM to "get rid of Vauxhall" and put Opel Logos on the cars in the UK - even though having Vauxhall as a market specific brand probably is costing GM pocket change, and the value of having a hundred year old, home-market brand is worth it several times.
Don't argue that and neither does GM. Look to GMNA for GM's strategy (i.e. Chevy --> Buick --> GMC --> Cadillac). If GM had never bought into nationalistic brands like Opel and Vauxhall and Holden... it would not have to think about brand strategies like it faces. If it didn't have them... Chevy/Buick/Cadillac would be the easy answer, but it obviously is not its circumstance. And honestly... I think VW shares that same issue (i.e. Dealing with its purchase of SEAT and Skoda regionally while pushing VW globally.).
I am just saying that having multiple brands must not be a bad thing. It certainly makes it easier to market to different segments - and at the end it becomes a calculation thing were the costs of having an extra brand and the possible cannibalisation just has to be less than the extra revenues the brand and its models earn.
Sure. I don't think I was saying otherwise. We need a QUOTE A QUOTE A QUOTE function in order to remember WTH we were talking about. :laugh:
I certainly wasn't going to discuss consolidation in the airline industry, but anyway.
Yes, consolidation is due to survival. As it will become in the car industry, just not as extreme. Hopefully. And consolidation happens both in the EU as in the USA. But the consequences for
brands are very different. Look at the recent big mergers in the US - Continental and United merged. The Continental brand is now disappearing - everything gets named United (though with the Continental Logo...), etc. The "hard product" i.e. seats, planes, etc. gets brought up to a common standard. The soft product (Lounges, on board service, in-flight entertainment, food) will be similar over all planes. So in the end, Continental will seize to exist, and everything will be "United". Same thing when DL/NW merged.
The only thing I was pointing out was... well... what I pointed out and no more. Airlines are even a difficult thing to compare/relate, because they are a service and not a product like a car. A $500 ticket is not a $20k car. But I think we're not understanding each others point totally anyways. :laugh:
In the end it comes down to calulating the revenues of an extra brand to its costs (including cannibalism). The result of that will vary...
No doubt. :beer:
