Pontiac G8: The World's Best Car Nobody Was Buying

By Michelle Krebs July 20, 2009

By Bill Visnic

Rapper 50 Cent and Pontiac G8 at New York Auto Show intro - 270.JPG On the FastLane blog at General Motors Co.'s Web site, vice chairman Bob Lutz now concedes the company can't make a business case for rebadging the suddenly lamented Pontiac G8 sport sedan, the car that caused a first-week-on-the-job train wreck between Lutz's vision of GM's product-strategy future and that of CEO Fritz Henderson.

Days before and barely hours into his return to GM's salaried-exec payroll, Lutz said GM was going to rebadge the underappreciated, Australia-sourced Pontiac G8 as a Chevrolet, calling it a car "too good to waste."

The pronouncement flew directly against an earlier thumbs-down verdict about the G8 from Henderson, who said he does not favor rebadging and insists every model in GM's line "pay its own rent."

Lutz previously had praised the G8's cult status among enthusiasts and said the car's sales were gaining momentum. True enough. But a little perspective from data analysts at Edmunds.com shows what appears to have really generated that momentum: outsized incentives.

It wasn't until the big-time money was on the G8's faux ram-induction hood that it sales numbers began to ratchet up -- and even those numbers, fueled by thousands of dollars in high-test incentives -- hardly were the stuff that saves distressed divisions.

Did Someone Finally Show Lutz the Numbers?

GM Bob Luz with Pontiac G8 - 159.JPG Was it this simple snapshot of the G8's true "demand" -- and more important, its ultimate profitability -- that quickly led Lutz, on the FastLane blog, to admit, "upon further review and careful study, we simply cannot make a business case for (rebadging the G8 or using it as a law-enforcement fleet vehicle). Not in today's market, in this economy, and with fuel regulations what they are and will be.

"I know that we'll get a lot of complaints from G8 lovers, because I'm one of them," Lutz continued. "And the product guy in me is complaining as loudly as anyone. But the marketing guy says there's no case."

Lutz isn't the only one to insist the G8 was a winner. The car has rock-star popularity in chat rooms, blogs and message boards, all of which blazed when Lutz proffered hope the G8 would return.

Problem was, all the love from this horde of enthusiasts, supporters, cult appreciators and basement bloggers never extended to hitting the showroom and actually buying one.

G8 "Enthusiasts": Show Me the Money

Long before GM confirmed Pontiac would be discontinued and before GM started slathering on incentives, G8 sales were running at a tepid average of about 1,500 per month and for the full year sold a total of 15,002. Its best month last year was April, its first full month on sale, when G8s went to 2,126 buyers. Not the numbers of a car sparking a sensation in the market -- at least not a profitable sensation.

Yes, the G8's 2008 sales total assuredly was impacted by the industry sales crash that began in the second half of the year. But assuming the G8's numbers were affected in proportion to the total industry decline, its actual 2008 sales might project to a year of perhaps 22,000 sales.

As for the widely distributed theory that the G8 is just now "catching on" with consumers and gaining momentum, move on its 2009 year-to-date performance. A quick look at Edmunds.com's Total Cost of Incentive demonstrates what's likely responsible for the G8's ballooning sales: as soon as GM radically hiked G8 incentives (by 50 percent or more), sales increased in direct proportion.

In fact, just two months ago in May, Edmunds.com data indicates G8 incentives hit their highest-ever amount ($5,415) for this purportedly "hot" model -- almost five times the G8 incentive GM was offering at the same time last year.

But even during months earlier this year when G8 incentives amounted to as much as a 20 percent discount on the car, sales still struggled to hit the 3,000-unit mark.

 

Pontiac G8 Sales Follow the Money.gif Blue indicate sales volume; gold shows Total Cost of Incentives

 

Still not numbers that were going to save Pontiac. And the kind of incentive-driven sales performance, it now seems evident, that did not make a business case to a company that, according to Henderson, now demands every model justify its existence -- by making a profit.

Is the G8 fun? Yes -- at least with V8 power. Is it a bargain sport sedan? Yes, particularly when factoring in the high-horsepower incentives GM offered to seal the deal with 15,691 G8 fanatics so far this year.

But is the G8 all that special? Not really. It's a reasonably good-looking chunk with a stealthily cheap and haphazard interior and performance that's only genuinely entertaining when its ploddy chassis is overpowered by an outsized engine.

In essence, the G8 followed the formula that for too long has led GM astray. A car with virtues, but not enough of them. A car that needed big incentives to sell in even relatively modest numbers. A car that wasn't good business.

Nobody wants to shut down emotion, but the G8's popularity was profitless -- and at least the "new" GM now appears grudgingly willing to admit it.

Analysis by Edmunds.com's Ivan Drury

Photos by GM

1 - Rapper 50 Cent helped introduced the Pontiac G8 at the New York auto show.

2 - GM's Bob Lutz talks with reporters after the Pontiac G8 introduction. 

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thegmsourcecom says: 10:32 AM, 07.20.09

"basement bloggers"

Such a snazzy name for independent bloggers. Look guys, anybody that has a blog is now just a lowly "basement blogger" because it's not a "big-time" blog like the "Auto Observer" whom, by the way, has stolen idea after idea from "basement bloggers."

Us "basement bloggers" are not saying that the G8 is a runaway sales success. What we're saying (at least me) is with a Chevy badge and the Chevrolet dealership network IT WILL SELL MORE!

This great "second-tier blogger" the "elite blogger" that wrote this seems to leave out on VERY important fact: nearly ALL G8 sales are retail sales - and that's huge.

Josh E. Oliver
TheGMSource.com

jmess says: 4:27 PM, 07.20.09

When the G8 was first shown to the media everyone was clamoring for GM to bring it to the USA. Two years later and the media can't remember why they wanted the G8 in the first place.

pafromfl says: 8:59 AM, 07.21.09

“But is the G8 all that special? Not really. It's a reasonably good-looking chunk with a stealthily cheap and haphazard interior and performance that's only genuinely entertaining when its ploddy chassis is overpowered by an outsized engine.”

Bill Visnic has revealed himself to be a complete ignoramus. I traded in BMW 330i and am completely satisfied by the handling of the G8. It blows away its nearest competitor, the Chrysler 300 and siblings. There are no other competitors anywhere near that price point. The “rock-star popularity” is based on the unique thrill you get when you stomp on the accelerator and whip around a corner. The G8 is an affordable family car that offers a great deal of entertainment value.

I can afford much more expensive cars and did not require incentives to buy the G8. I liked it better than more expensive Infiniti and BMW models. Even with falling consumer confidence, G8 sales are increasing. GM did a poor job of advertising the G8. G8 sales took a while to increase because word-of-mouth advertising is slow process.

billddrummer says: 9:11 AM, 07.21.09

To thegmsource,

Retail sales don't mean much when you give back $5,000 on each unit. There's no profit in the deal after you factor in incentive costs.

The G8 will go down as another failed GM experiment. For the same money you can get a new Taurus, which is quite a nice, comfortable, spirited vehicle.

Advantage: Ford.

fuhteng says: 10:44 AM, 07.21.09

The new Taurus is spirited? Really? It is a great replacement for the Town Car, but calling it spirited is either very generous or utterly ludicrous. The Taurus has more tech, but it can't compete with the G8 is any kind of 'spirited' testing. Edmunds IL did that already for a SHO versus a G8 GT. It wasn't too far off, but read the comments and look at the price. For the price of a SHO you can get a GXP (if you can find one of the failed experiments) which will eat it.

pafromfl says: 2:08 PM, 07.21.09

Taurus?!!

Front wheel drive 2-ton sedan with so-so handling = ho hum, zzzzzzzz.

Big V8 RWD drive 2-ton sedan with BMW-like handling = fun fun fun!

tomcatt630 says: 12:54 PM, 07.22.09

Josh Oliver, sorry to say but Auto Observer nailed this one. Where are the so called 'loyal buyers'? They only bought retail with huge rebates, and that is not good business, look at how GM went bankrupt.

And, BMW owners would never walk into a Chevy store nor would they buy anything called 'Caprice', too!

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