GM's Pontiac Sales to Shrink 40% as Models Are Cut
By Greg Bensinger
May 24 (Bloomberg) -- General Motors Corp.'s Pontiac division, once the third largest-selling car brand in the U.S., may see domestic sales drop as much as 40 percent as it shrinks its model lineup and pares sales to rental-car companies.
Pontiac's U.S. sales could fall to 250,000 a year from 410,229 in 2006, said Jim Bunnell, who took over as chief of GM's Buick-Pontiac-GMC divisions on May 11. As many as four Pontiac models may be eliminated to focus the brand's image, said Troy Clarke, GM's North American president.
Annual sales of ``250,000 or so, that seems like a natural number,'' Bunnell said in an interview yesterday in St. Louis. He didn't say when that mark may be reached.
GM is working to better define its eight U.S. brands as sales continue to fall. The largest U.S. automaker is trimming its vehicle selection and combining Pontiac, GMC and Buick dealerships to more closely associate the brands.
``GM needed to make Pontiac smaller -- it was always trying to be everything to everyone,'' said Erich Merkle, an auto analyst at IRN Inc., a consulting firm in Grand Rapids, Michigan. ``People want to buy a car because it clearly says something.''
Pontiac hasn't posted an annual sales gain since 1999, tied for the longest streak of any automobile brand sold in the U.S. Only Isuzu Motors Ltd., which sold 8,614 vehicles in the U.S. last year, matched that mark. The division's sales declined 20 percent this year, outpacing GM's overall drop of 6.5 percent.
11th Place
Through April, Pontiac was No. 11 in sales among all brands in the U.S., behind Hyundai and ahead of Mazda, according to Automotive News, a trade publication.
Certain models such as the Solstice and G6 are central to the brand's image, though ``we want to get to three to four really great Pontiacs,'' Clarke said. Only the G6 has increased sales this year through April, according to Automotive News.
Currently, Pontiac has seven models, including sedan, coupe and convertible versions of the G6, according to GM's Web site.
GM pursued a similar strategy with its Buick division, paring its product line to three vehicles for the 2008 model year, from as many as seven several years ago. Buick sales are down 31 percent this year, more than any other GM brand.
Pontiac reached its sales peak at 896,980 in 1978, according to Automotive News. That was the year GM sold 9.55 million vehicles worldwide, the highest ever.
Bunnell said Pontiac has made ``pretty significant'' cuts in its sales to rental-car companies, which are generally priced at a discount, particularly for its Grand Prix sedan.
Shares of Detroit-based GM fell 96 cents, or 3.1 percent, to $30.47 at 4:01 p.m. in New York Stock Exchange composite trading. The stock gained 15 percent in the past 12 months.
GM's 8.375 percent note due July 2033 rose 0.13 cent to 93.5 cents on the dollar, yielding 9.03 percent, according to Trace, the NASD's bond-price reporting service.
To contact the reporter on this story: Greg Bensinger in St. Louis at gbensinger1@bloomberg.net
Last Updated: May 24, 2007 16:10 EDT
Phone 02 9829 5072
Phone 0438 658 458
Phone 0432 136 333
