Pontiac Going Rear Drive?

Proposal plays up performance cars in attempt to revive ailing brand

By JAMIE LAREAU | AUTOMOTIVE NEWS

DETROIT -- After debating Pontiac's viability this year, General Motors' leadership plans to revive the brand's heritage of performance with a product lineup of exclusively rear-wheel-drive cars.

There would be no trucks and - after the next generation of vehicles - no front-wheel-drive cars either.

GM will unveil a rwd sedan concept at January's Detroit auto show, company sources say. This echoes the strategy that GM adopted with the 1999 Evoq concept, which revealed Cadillac's new brand "look."

The Pontiac plan is not final. GM executives continue to build a business case for it. This ambitious proposal is a plan to save the brand, which has suffered declining sales. GM sold 437,806 Pontiacs in the United States last year, compared with 599,123 in 1995.

One insider says it would take five years to convert the brand to rwd. That's why Pontiac will get one more generation of fwd and all-wheel-drive small cars.

A Pontiac spokesman declined to comment on the brand's plans. Fwd cars will not go away soon, but rwd vehicles will become more prominent "in the near term," the spokesman said.

Sources inside GM and close to Pontiac say GM leaders are debating:

>> The future of the Grand Prix sedan.

>> A possible GTO replacement based on the Chevrolet Camaro.

>> A Firebird muscle car.
In recent years, Pontiac has been wracked by debate over its future. During a controversial speech at the New York auto show last year, GM Vice Chairman Bob Lutz called Pontiac "a damaged brand."

In a recent interview with Automotive News, Lutz said he had never asserted that the brand was "irreparably" damaged. While Pontiac is still struggling, GM is repairing the damage, and the bleeding has stopped, Lutz says.

Nevertheless, sources say top-level GM executives did debate a phaseout of the brand. In January, senior executives met to discuss Pontiac's future. GM decided to revive Pontiac as a pure performance brand.

GM will trim product lineups as it consolidates Buick, Pontiac and GMC into three-brand dealerships under its retail channel strategy. In a recent interview, Lutz told Automotive News that Pontiac and Buick will not carry trucks.

Lutz declined to speculate whether the Pontiac Torrent crossover, a rebadged Chevrolet Equinox, would one day go to GMC, but industry sources say it's likely.

The strategy will force Pontiac to sort out its product plans for the Grand Prix. While GM hasn't set a time frame, it's likely the automaker will discontinue the current incarnation of the fwd Grand Prix after the 2008 model year, industry sources say.

GM is considering a new mid-sized rwd sedan to replace it, says an industry insider. The source says the vehicle will be "one notch up" from the present Grand Prix, which has a base price of $21,990, including shipping. Whether that vehicle keeps the Grand Prix name is uncertain.

A rwd lineup could give Pontiac performance credibility, says John Pitre, general manager of Motor City Auto Center in Bakersfield, Calif. "They're right on track with the performance division of GM," he says. "BMW has been born and raised on rear-wheel drive. For us on the West Coast, rear-wheel drive feels better to drive and seems to last longer."

But Pontiac's drive to become a pure performance division would sacrifice sales volume, predicts Doug Scott, industry analyst at GfK Automotive in Southfield, Mich. For example, many G6 buyers in northern climates want a front-wheel-drive car for winter conditions.

Scott also said GM is pressuring dealers to combine Buick, Pontiac and GMC franchises into single stores by cutting the brands' product lineups.

"They really want to narrow the range of products and narrow the sales objective," Scott says. It means sacrificing sales volume at dealerships for profit at corporate level. "It's forcing the channeling strategy," he says.

Pontiac brand executives hope that if GM builds the Camaro for Chevrolet, the architecture could provide a similar product for Pontiac. The previous generation of GM muscle cars included the rwd Pontiac Firebird, a sibling of the Camaro.

But Pontiac spokesman Jim Hopson is quick to add, "We want a truly differentiated product. We don't want a rebadged vehicle."

Company insiders say that if GM decides to build the Camaro, GM will not revive a Firebird version. "There will be no Firebird," says one source. "Rear-wheel drive? Yes. Pony car? No."

Dealers also want a replacement for the GTO, one of only two current rwd Pontiac cars, the other being the Solstice two-seater. Pontiac will kill the Australia-produced coupe this fall after just three model years.

Insiders say there will be a replacement for the GTO, but the product gap will remain for a couple of years.

Says Pontiac's Hopson: "We haven't made any bones about the fact that Pontiac needs a rear-wheel-drive performance vehicle."