What Does the Closure of Pontiac Mean For the Auto Industry?

The economic crisis of recent years has had major impacts on virtually every segment of the market.  Few segments felt the sting of the failing economy quite as hard as the automobile industry, however.

Few people have found themselves in the position to purchase new vehicles, and even with government bailouts and the ‘Cash for Clunkers‘ program, many car companies simply never fell on better times.  This led General Motors to announce in 2009 that the Pontiac brand was being closed down, sending a wave of panic throughout the industry.

Pontiac had been a standard in the automobile industry since the early 1900’s.  With early sports cars such as the Silver Streak, the brand established itself as a contender in the market.  Even as of late, the Grand Prix and Grand Am vehicles have been commonplace on American roadways.  But when the economy crashed, General Motors felt that the best course of action was to eliminate Pontiac in order to focus on their biggest selling brands.

While this move disappointed many Pontiac fans, it made financial sense to the auto industry.  Pontiac and Saturn have both been eliminated during the economic crisis, and there is a growing fear that other car companies will follow suit.

In truth, the loss of Pontiac was more about cutting what was regrettably seen as dead weight from a single company than a total failure of the auto industry to succeed.  In other words, General Motors had simply become too large to survive using its current resources.

This isn’t to say that another car company will never close, but the news is not quite the death knell for other car companies out there as it first seemed.