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Wednesday, February 11, 2004

Expansion for dummies

I'm a pretty big opponent of expansion in the auto biz. To me, do one thing, and do it well rules the day. BMW and Hummer/GM aren't listening.

The BMW 1 series is a car that doesn't make any sense. It really doesn't. It's a hatchback, so to Americans it will make BMW look like VW. And that can't be a good thing, with sales of the new Golf doing dismally.

Whenever car companies expand into new market niches, with new vehicles, they always leave a core vehicle behind. VW went along with the Phaeton (German for Fool's Hope), and the Touraeg, and put together a lackadaisacal update for the Golf. In the heavily competitive hatch market of Europe, such a move is sure to be a disaster. Europeans have seen through it, and switched to other brands.

Hummer is trying to expand too, with the Hummer H3. With Hummer, you have a vehicle line that sort of is a fad in itself, and could very well disappear when America falls out of love with the SUV/military craze it is in. To expand on this is just silly. GM could make a hard, durable mid size SUV out of a GMC model, or a Chevy model. The H2, and H1 will look more and more mundane, especially considering that aesthetically, they all look like eggcrates.

The only brand that's been able to make a car that was out of the brand's market was Chevy with the Corvette. And the only reason the Corvette has succeeded is because the Corvette is an amazing vehicle with no real competitors in that price range (at least in America). Can anyone say the same thing about the H3? Or the Phaeton? Why buy a Phaeton when you can have an Audi A6? And consider the fact that if you squint, a Phaeton looks a heck of a lot like a Passat. It's hard to see that W8, or W-12 engine beneath aluminum and plastic. Why go to great lengths to create a luxury brand, and then try to usurp it with another vehicle?

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