A decade ago, Japanese automaker Nissan Motor Co. made a controversial move that is still questioned by automotive marketing analysts.
After having sold vehicles under the Datsun brand in the U.S. since 1960, the nameplate was switched in 1983 to Nissan to match the parent’s name.
“They built their reputation in the United States on the name, `Datsun,’ and later tried to bring in the corporate name,” said David Cole, director of the Office for the Study of Automotive Transportation at the University of Michigan, Ann Arbor. “I think they may have thrown something away there.”
Ten years later, the nameplate controversy has come to the forefront again. The subject has been a hot topic in Detroit since rumors began last fall that General Motors Corp. was considering dropping the Oldsmobile nameplate and that Chrysler Corp. was pondering the same fate for Plymouth.
While many automotive franchises flourished in the 1980s, Oldsmobile sales began to slide. The division’s annual volume peaked at just more than a million units around mid-decade, but dealers delivered less than half that in 1992.
The division’s sagging fortunes, coupled with GM’s myriad financial and personnel difficulties, triggered frenzied media speculation about the demise of the Oldsmobile brand name.
As rumors reached a fever pitch nationally, general manager John Rock went on closed-circuit TV in fall ’92, telling the division’s employees and dealers, “Somebody’s trying to shoot my horse out from under me.”
Within days, the rumors also were denied by GM President John F. Smith Jr. and Chairman John Smale, both of whom dispatched formal letters to the division’s 2,900 dealers and the national news organizations.
In a November interview, Rock said: “This isn’t a new spot for us . . . We’re the oldest American nameplate, and that is what’s fascinating. Interestingly enough, on six occasions in Oldsmobile’s history we were forecast to go down for the count.”
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As far as Rock and his bosses at corporate headquarters are concerned, the Oldsmobile name still will be around-albeit in greatly altered circumstances-for the division’s centennial celebration in 1997.
“Oldsmobile will undergo as much change in the next couple of years as (it has) in (its) history, primarily on the marketing and distribution side of the business,” Rock said. “I think that Oldsmobile can create products and a (dealer) environment that would eventually create a happy experience for a current Saturn buyer.”
(Saturn is one of the highest ranked brands in the country in customer satisfaction for sales and servcice.)
“Now the issue isn’t whether there’s going to be an Oldsmobile,” Rock continued, “but whether we can pull it off. The question of change, and how far and how fast you change, is always an issue-both your ability and sometimes the wisdom of doing it.”
As for discarding the Oldsmobile brand name, coined 95 years ago by auto pioneer Ransom E. Olds, Rock said: “If you want to change, you have to tell yourself that nothing is sacred. . . . But I don’t think the name Olds is going to be an issue. . . . If you can take the variability out of the dealership experience, that will satisfy current customers and help sell our current products-but also we will begin to change (the image of) the name Oldsmobile” to something similar to what Saturn offers.
George Peterson, president of the AutoPacific Group, an automotive consulting company based in Santa Ana, Calif., described what he called Oldsmobile’s “brand equity”: “I think there was probably some intent within the company to redefine Oldsmobile, but never to drop the name.”
He noted that Oldsmobile is the oldest car-making operation in the U.S. From an intrinsic standpoint, “it’d be a big mistake to kill off 95 years of history (in the) name.”
From a practical standpoint, killing the Oldsmobile brand name might unleash a spate of legal action from dealers and component suppliers, he added. “GM would have to fight lawsuits for the next 50 years if (it) dropped Oldsmobile.”
In addition, GM, like Nissan 10 years earlier, would have to spend enormous sums of money to promote a new brand name.
Peterson noted that Mazda Motor Corp. planned to launch the Amati, an upscale brand and separate division, in the U.S. in 1994 but recently canceled. He estimated that the company lost “tens of million of dollars setting up a franchise that never put a car on the road.”
While GM officials denied that there was any chance they’d do away with the Oldsmobile name, Chrysler executives conceded they had considered dropping the Plymouth brand. After review, it was decided the name would be retained.
Current Chairman Robert Eaton observed last summer: “Chrysler started a project called Project 2000 long before I got here-at least a couple of years ago. It was an effort to see how we’d like to bring vehicles to market in roughly the year 2000. Out of that came a general conclusion that we should look at the number of franchises and the number of brand names.”
The Plymouth brand, which dates to 1928, traditionally was Chrysler’s budget-priced product line. Even today, Eaton said, “Plymouth is a more value-conscious brand and appeals to a group that’s a little older, a little less affluent.”
Executives decided the intrinsic value of the Plymouth name-the so-called “brand equity”-was virtually irreplaceable.
“I feel strongly that brand image is one of the strongest non-financial assets a company has,” Eaton noted.
Moreover, Chrysler expects to provide dealers with a steady stream of new products under the Plymouth name through the end of the decade, he added.
“In Plymouth’s case, Chrysler performed an image study to decide what they want the brand to represent,” said William Pochiluk, president of AutoFacts Inc., an automotive consulting firm in West Chester, Pa.
The Plymouth brand is still perceived as synonymous with inexpensive and reasonably reliable transportation, and that is something that Chrysler wants to retain for younger buyers, Pochiluk said.
Chrysler demonstrated its commitment to the brand last month at the North American International Auto Show in Detroit by announcing the name of its next-generation compact car: the Plymouth Neon.
The Neon is expected to be another breakthrough vehicle for the automaker, industry analysts say. In quality, price and production capability, they feel that the Neon should provide the stiffest challenge yet to the imports by an American vehicle in the small-car market.
Chrysler also debuted the Plymouth Prowler, a ferocious-looking roadster concept, at the Detroit show. “Those of you concerned about the future of Plymouth should take a look at the Plymouth Prowler show car,” said Steve Torok, general manager of the Chrysler-Plymouth Division in Auburn Hills, Mich. “It should answer any of your questions.”
The Prowler is a ’90s variation of the classic American hot rod of the ’50s. It is on display at the Chicago Auto Show.
While dropping a nameplate is difficult, it’s not impossible. In 1985, Ford Motor Co. tried to launch the Merkur (German for mercury) brand in the U.S.
Four years later, however, Ford folded its Merkur Division. Though it had signed on 800 dealers at its peak and sold some 60,000 vehicles, Merkur never really caught on with the American public.
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“Merkur had pretty good quality,” Pochiluk said. “I think it was just a simple case of `somebody had a party, and nobody showed up.’ “