GM's Oldsmobile division will formally cease to exist in 2005 when the franchise agreement with its dealers expires.
But some suggest the venerable brand likely won't hang around that long. An Olds insider says, “If we sell through '05, I'd be surprised. “You take a volume vehicle out like Intrigue or Alero, and it's going to seriously impact the bottom line of an Olds dealer.”
Since December, when GM announced the Olds' phase-out, about 10 dealerships have closed. As the Olds lineup shrinks and dealer profit margins wane, the pace of showroom shuttering will increase — resulting in a distribution network inadequate to keep Olds financially viable.
The game plan calls for the midsize Intrigue to be phased out in 2003, followed by the Silhouette minivan and compact Alero in 2004 and the fullsize Aurora sedan in 2005.
Plans now call for the Bravada SUV, all new for 2002, to be dropped in 2007 — two years after the brand is phased out. Speculation is that Bravada will be rebadged and sold by another GM division to finish out the life cycle. Or it could simply be phased out, ahead of plan, in 2005.
Meanwhile, the surprising sales success since Olds went on death row has left dealer stock perceptibly low, says an Olds spokesman.
“Dealers didn't order any cars after the announcement. All the sales we've enjoyed have been out of stock. We're short of everything, particularly Bravada.”
Olds hopes inventory will return to normal levels soon.
Reid Trickett, owner of Trickett Oldsmobile in Madison, TN, cut orders for vehicles after the phase-out announcement.
“It was a death notice,” he says. “How can we promote such a product for two or three years down the road?”