Pontiac Showing Signs of Life

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Pontiac Showing Signs of LifePittsburgh Post-Gazette By Don Hammonds April 11, 2006 Pontiac, General Motors' performance division, is fighting its way back from lagging sales, a loss of identity and an exaggerated report last year that it was a "damaged brand" soon to be axed from the auto giant's portfolio. Pontiac , the third best selling car brand among American makes in the 1960s and 1970s, lost its direction in the 1980s – as did all of GM's brands. By 2004, Pontiac had fallen to sixth among American car brands. Back then, GM embarked upon a disastrous money-saving program in which all of its brands shared similar styling. Quality sank, and Pontiac 's prized performance reputation and carefully cultivated sexy image built with cars such as Grand Prix, Bonneville and GTO all but disappeared. Everything came to a head last year at the New York International Auto Show when GM vice chairman of global product development Robert Lutz's comments about Buick and Pontiac being "damaged brands" was taken out of context, Pontiac officials say, prompting undue panic over the brand's future. "We've learned numerous times that when an executive is quoted saying something as bad as that, there's some context in the quote that's missing," said Jim Hopson, Pontiac spokesman. "Yes, it stunned us when it came out. But we understood there was a story behind it all that was not being accurately reported." He added: "Bob was trying to make the point that GM historically in the past has not played evenly with all of its brands. It's handicapped some of its brands and not provided the products it should have, and he named Buick and Pontiac as two examples of it." Now, as another New York International Auto Show gets under way this week, Pontiac is showing signs of finding itself again. The auto show will see the introduction of a new high- performance Pontiac G6 GXP, a concept coupe powered by a specially- tuned 3.9-liter, 270-horsepower V-6. If it gets a good reception in New York and other shows, it might be built for sale. Meanwhile, in the first quarter of 2006, Pontiac sold 81,554 units, a drop of 11.9 percent from the 92,712 units sold in the first quarter of 2005. Some of the decline can be attributed to a change in how sales are being reported by GM, which is de-emphasizing fleet sales in the numbers it reports. Still, several of Pontiac 's models, including the intermediate G6 and Solstice roadster, are selling well. Pontiac sold 36,858 G6 units in the first quarter of this year, compared with 20,712 sold in the first quarter of 2005, a 78 percent increase. Solstice roadsters are basically sold out. If a buyer wants one, she or he has to go on a waiting list, Pontiac officials say. Some of the sales success is due no doubt to GM's aggressive program of readjusting prices downward. But Pontiac officials also think that the wide variety of model choices available for G6 has helped immeasurably. G6 comes in coupes and sedans with several trim levels, and soon it will be available in a new hardtop-convertible. Its main competitors, such as Honda Accord and Nissan Altima, come only in sedans, and that has helped bring people – especially style conscious youthful buyers – into Pontiac showrooms. G6 also has enjoyed highly favorable press reviews that have helped too, Pontiac officials say. Pontiac is blessed with demographics showing some of the youngest buyers in the auto industry, so the G6's renewed effort on performance and styling hit home, officials say. "Our average buyer is still in the mid-40s range, and we definitely skew to more youthful intenders, and the sportier enthusiasts out there," said Dennis Maraone, Pontiac 's product director. The G6 did get off to a slow sales start when early production consisted of only V-6 sedan models, and only the midrange 3.5-liter V-6 at that. "The thinking was that we had only so much capital with which to work with as we ramped down production of the Grand Am and ramped up G6," said Gary Steilen, marketing manager for the G6. "It was a very deliberate attempt involved in bringing it on stream. We were very conscious of the quality effort, and we didn't want to bring too much complexity into the plant at the same time." The Solstice roadster is another story. It was red hot right from the start. "When we opened our order books at the time the car was shown on 'The Apprentice' television show, we thought, 'Well, the first thousand will sell within a couple of days, and maybe after that, we'll get maybe another 1,500 for a total of perhaps between 2,000 and 2,500 orders altogether," Mr. Hopson said. "But we sold the first 1,000 Solstices in 41 minutes and over a 10-day period thereafter, we sold 7,116 of them. Now, we're building them as quickly as we can, but there's still a waiting list. There are now people on the waiting list for 2007 models," Mr. Hopson said. Despite the success of the G6 and the Solstice, however, he added: "We're not claiming victory. But we are really undergoing a renaissance at Pontiac of both style and performance. We've at least established the general direction in which we want to succeed. And we're getting the kind of feedback from our customers that gives us a feeling we are headed in the right direction." But for all of its recent successes, Pontiac also has made some moves recently that might cause concern among industry observers. For instance, Pontiac 's reborn GTO, which brought back to market one of the firm's most fabled performance models, is once more being dropped. "GTO has been a great vehicle, and it certainly epitomizes what Pontiac was in the past, is now and always will be in the future," Mr. Hopson said. "We ran into some federal regulatory changes at the end of the 2006 model year that would require us to do some pretty substantial re-engineering of the components of the GTO." The car is being discontinued because of tougher safety regulations. The current model is based on the Holden Monaro, an Australian GM brand, and the architecture of that car is being phased out worldwide, Mr. Hopson added. "It didn't make financial sense to spend resources on an architecture that was being phased out." But wouldn't it make more sense to have the GTO in the lineup? "I don't think you will find anybody in Pontiac or GM saying otherwise. There are opportunities we are exploring. Rear-wheel- drive performance is something that we feel is part of Pontiac 's DNA. We will look at lots of opportunities as we move forward," Mr. Hopson added. Pontiac also is introducing its own version of the popular Chevy Cobalt called the G5. But the introduction of a car based on another GM product with little styling change could cause some to think GM is returning to a practice that got the company in trouble in the first place. But Pontiac officials defend the introduction of the G5. "When you look within our portfolio, and you look at the Buick/ Pontiac/GMC dealership sales channel that we will be using, the G5 represents a very critical entry point from a price and size perspective," Mr. Maraone said. "You called it badge engineering, but we think we can make it distinctly Pontiac . We would like more differentiation, yes. But we want a full complement of products in the Buick/Pontiac/GMC dealer channel." And not a word about the vibe