Good Idea General Motors, Now Lets Get Moving!

Implications: The formation of a premium channel for GM's three upscale brands is likely to aid the company in its oft-stated goal of more dealership consolidations.

Analysis:  The Wall Street Journal's report last week that General Motors is combining the management of Cadillac, Hummer and Saab into a new premium channel will go a long way towards achieving the company's goal of having more car brands under one roof.

If GM gets its way, the Cadillac, Hummer and Saab brands will migrate  into combined dealerships similar to Buick, Pontiac and GMC Truck.

Over the years Buick has faded into only three "near-luxury" models and might disappear altogether in the future. Cadillac, even with the new CTS, DTS, and STS models, is still widely viewed as the old DeVille company.

There is no doubt that GM has made great strides with the Cadillac division over the last few years, but it is still failing to attract young buyers. The STS has few customers and the CTS seems to be populated by seniors that can no longer afford $40 to $50K for a DTS. The cars are powerful and the handling has improved. However, all of the Cadillacs are too heavy and get poor gas mileage.

GM has tried too hard to emulate Mercedes Benz and BMW, rather than creating a roomy four door Porsche. That's where Saab should come in.

Saab would mate well as the anti-Cadillac. Saab should stay clear of SUVs, and six and eight cylinders. It should model itself as a civil version of Lotus, versus Cadillac being a civil Corvette. A well built, great handling, light, high mileage, luxury compact four door Saab is the perfect complement to Cadillac. GM's biggest danger in this endeavor is to create another Malibu Saab.

As for Hummer, I believe it is a dying fad and can no longer support a stand-alone dealership. It will exist only as a halo vehicle to draw attention to the Cadillac showroom.

I have been trying to convince some of my friends to give GM another try. Maybe a great, well priced small car will do the trick.