The news that Toyota has finally passed General Motors in global sales is about as surprising as John McCain finally announcing he's running for president. But now that it is officially Number Two, it is time for GM to perform some long-overdue surgery on its brand portfolio. Age has taken its toll, and GM is overdue for a face lift.
In some ways, GM (Charts, Fortune 500) is still built for the size it was 50 years ago. In the United States, GM's market share is half of what it used to be but it sells seven brands - two more than in its heyday. Toyota (Charts), by contrast, gets by with only three brands: Toyota, Lexus and Scion.
Despite its shrinking market share, GM has always argued that there is value in its broad brand portfolio. Consumers want choice, and having a variety of brands allows GM to segment the car market more finely than its competitors. If GM eliminates a brand, it fears losing long-time buyers.
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