5 Dead Auto Brands And Why They Died

Ever since Henry Ford’s Model T popularized automobiles in 1908, car companies have worked tirelessly designing, manufacturing, marketing and selling different models in the hopes that each would enjoy longevity in the marketplace. The brands associated with the major players have in recent years been challenged in terms of sales, and in some cases have been abandoned altogether. Ford Motor Company’s (NYSE: F – News) June 2, 2010 announcement about its decision to discontinue the Mercury brand is the latest in a series of brand terminations. Whether out of financial necessity or the desire to streamline product lines, here are five auto brands that have faded away.

1. Mercury

Mercury is a brand of the Ford Motor Company that has been around for over 70 years. Ford recently decided in early June to end Mercury production before the end of the year. Mercury was originally created to offer Ford customers a premium vehicle. The continued popularity and corresponding sales of the Ford branded vehicles has left the Mercury brand weak, with many of its loyal customers now driving Fords.

Ford Motor Company has a 16% market share in the United States, with Mercury contributing only 0.8%. Mercury’s market share has been flat or declining for years, and Ford Motor Company has decided to focus its attention on the Ford brand and its luxury Lincoln brand.

2. Hummer

In February, 2010, General Motors (Pinksheets: MTLQQ.PK – News) announced it would be phasing out its Hummer brand after an unsuccessful attempt to sell the brand to a Chinese manufacturer. Hummer, with roots that go back to the 1992 military Humvees, faced challenges in recent years as consumers became more conscious about vehicle gas mileage. Hummers are notorious gas guzzlers and took criticism from environmental groups pressing for more fuel efficient vehicles.

Hummer is one of several recent General Motors brands to be discontinued

3. Pontiac

Anyone who paid attention on the road in the 1960s and 1970s took notice of muscle cars – those sleek, high performance vehicles with V8 engines that could be heard from a mile away. A brand of General Motors, Pontiac made vehicles and muscle cars that defined an era with legendary models such as the GTO and Trans Am.

Though Pontiac was at one time one of the top selling brands in the United States, its leadership was unable to devise a strategy that would allow the Pontiac brand to continue. In business since 1926, Pontiac was discontinued in April, 2009.

4. Saturn

General Motors halted production of its Saturn brand in October, 2009 after a deal to sell to Penske Automotive Group failed. Saturn, with a vehicle line that included mostly small to mid-size cars, had been around since 1985. General Motors has enjoyed successful brands over the years, but Saturn struggled and was never profitable.

General Motors filed for Chapter 11 bankruptcy in mid-2009, and was the recipient of U.S. government TARP loans (bailout) following the economic meltdown of 2008. Under scrutiny to pay back loans and become a sustainable corporation, GM has been forced to streamline its brands and focus on the lines that have the most potential.

5. Oldsmobile

Another General Motors brand, Oldsmobile was founded as the Olds Motor Vehicle Company in 1897. Claiming to be the first company to mass-produce vehicles, Oldsmobile joined GM in 1908. Oldsmobile was the first brand to come with fully automatic transmissions, debuted in the 1940 Hydra-Matic models. Competitive with both Chevrolet and Ford, Oldsmobile’s Cutlass series became the best-selling car in the United States in 1976. GM pulled the plug in 2004, citing that “Oldsmobile production has remained unprofitable” and that it would therefore end manufacturing.

The Bottom Line

Since the invention of the automobile, brands have come and gone. Many have faded away, but a few remain strong in the hearts of collectors and enthusiasts, making occasional appearances at auto shows, or in magazines and online venues. The auto industry, which produced more than 60 million vehicles in 2009, is the most significant economic sector in terms of revenues.

Facing rising fuel costs, changes in consumer spending habits and increased volatility in raw materials pricing – particularly steel – the auto industry has been forced to analyze its fleets in an attempt to streamline production. As automobile manufacturers respond to a dynamic climate, others may join the ranks of dead auto brands.

Posted in Auto, Finance.


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