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Detroit's auto troubles test brand loyalty

General Motors will drop four of its eight nameplates. What about service and warranties?

By Contributor to The Christian Science Monitor / February 24, 2009

Just looking: Charles and Evelyn Shaw check a Saab in Troy, Mich. GM plans to drop the brand.

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Scot Roskelley wanted a Saab his entire life.

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He learned to drive stick shift on one as a teenager. He loves its little quirks, like the way its ignition is mounted on the floor and not the dash. He trusts his local dealership to regularly service his 2002 Saab 9-3 hatchback and no one else.

So when he learned last week that General Motors, which owns Saab, plans to either sell or phase out the Swedish subsidiary by 2010, Mr. Roskelley was stunned.

"I kind of gasped a little bit," the Chicagoan says, "Is that the death of the car? One of the first things you worry about is what will the accessibility of parts be like if they stop?"

That sentiment is being shared among many car owners who feel they are being forced to divorce from automotive brands they have been loyal to, in some cases their entire lives.

GM's restructuring plan includes selling or discontinuing Saturn by 2012, downsizing Pontiac into a niche division with a smaller lineup of vehicles, and selling its Hummer brand of light trucks.

The plan GM submitted to the federal government – a condition of receiving bailout money – shows a leaner company: Instead of eight nameplates, GM plans to operate with just four: Chevrolet, Cadillac, Buick, and GMC.

In a time when mass layoffs are announced in every sector of the workforce and consumers are struggling to hold onto their homes, it is hard to imagine that brand loyalty is still a factor among new car buyers.

"It depends on which brand," says Dave Sedgwick, editor of Automotive News. "For the Jeep Wrangler, those people are fanatics. They're not going to go out and suddenly buy a Kia. On the other hand, if you're talking about people who own a Chevy Malibu or a Ford Focus, it's about, 'Show me a deal.' "

Customer loyalty is slipping

The proliferation of so many brands on the market, however, is giving consumers more options than ever, so that overall "there is less brand loyalty than there used to be," says Mr. Sedgwick.

Yet for car owners already happy with vehicles but who are learning those brands may not be around for long, their next car purchase is giving them pause.

"It's kind of a bummer," says Ed Timpe of Los Angeles, in a phone interview. Surviving a near-fatal car crash seven years ago, as a teenager, resulted in his purchase of his current Saturn, which he valued for its reinforced safety features. "I'm getting to a point where I'm considering buying a new Saturn because I consider it a safer American car. But if it's gone in three years, that's harder for me to commit to."