Too many brands

When I was a kid, GM had five car brands. They were clearly defined and differentiated. GM's goal was to bring buyers into the fold with Chevrolet, and as they got older and their needs and tastes changed, keep them for the rest of their lives, moving from Chevy to Pontiac to Buick to Oldsmobile to Cadillac ("The Standard of the World".) Ford did the same thing, with Ford leading to Mercury and then to Lincoln, as did Chrysler, starting with Dodge, to Plymouth, Chrysler and then to Imperial. Since then, GM has added Saturn and shut down Oldsmobile, Imperial was first merged into Chrysler and then discontinued altogether, as was Plymouth.

Is Alfred P. Sloan's model, first developed at GM in the early 1920s, the right way to go in the 21st century? In my opinion, it's obsolete--too costly in an industry with worldwide competition. GM could probably do just fine with Chevrolet, Cadillac and possibly Saturn to act as the U.S. brand for Opel-designed cars. At Ford, Mercury is completely redundant, and Lincoln's product line is little more than dressed-up Fords. Drop Mercury and either differentiate the Lincoln product line much more or fold it into Ford. (The new MKS, for example, is based on the Volvo S80/Ford Taurus platform and could become the new Ford flagship, as the LTD once was.) There's tremendous overlap between Dodge and Chrysler, with the Chryslers having somewhat upmarket trim. Only one brand is needed.

By getting rid of multiple brands, the design, engineering and tooling costs involved with creating multiple variations of the same car can be saved. Advertising can be more effective, and costs can be reduced. Dealer networks can be made smaller and more efficient. Product inventories, both at factories and in the field, can be decreased.

The problem isn't limited to U.S. manufacturers. Toyota is rumored to be considering turning the Prius into a separate brand, with several different models. I think that's a mistake. Just as Scion is not attracting the young, hip buyers that Toyota intended, the buyers for a Prius brand aren't going to be significantly different than those who buy Toyotas. Toyota has succeeded handsomely with two brands, Toyota and Lexus. They don't need any more.