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Struggling Goat: Pontiac cuts output for limping GTO, looks to future
JASON STEIN | Automotive News

Posted Date: 11/22/04

PHOENIX -- After a year of disappointing sales, Pontiac is scaling back production of the 2005 Pontiac GTO, which was touted as a halo car for the brand.

Pontiac will cut GTO production by about 30 percent next year, from its 2004 target of 1,300 to 1,500 units a month to 1,000 a month in 2005.

Larry Pryg, marketing manager for Pontiac's premium mid-sized cars, admitted Pontiac did not conduct enough initial market research on the GTO, misallocated inventory and missed its initial estimate.

"We will adjust production levels, and 12,000 units a year seems right for this vehicle," Pryg said at a press event here.

Through October, Pontiac sold 9,487 GTOs in the United States. Pontiac is offering a $3,500 national cash rebate on 2004 models.

Earlier, dealers had complained that the GTO suffered from bland styling and a high sticker price, and lacked incentives.

Adjusting allocation

Pontiac said imprudent allocation to dealerships was a bigger factor in the slow start. Pontiac overloaded its inventory in the U.S. north-central region, allocating 40 percent of the rear-wheel-drive GTO's initial production to those states in the middle of winter, when the handling problems of rear-drive vehicles in snow are most apparent.

"We wanted to reward those dealers," Pryg said, "but we couldn't neglect the other parts of the country, such as the West Coast, where we didn't have enough in our 30-day supply."

Pryg said 30 percent of 2005 GTO inventory will be allocated to the north-central region. The rest will be dispersed across the country.

This month some dealers still were receiving 2004 GTOs. GM has promised its dealers that production on the 2005 GTO would finish three months earlier than last year.

As for issues of styling and price, Pontiac hopes a stable price and a larger engine will attract more buyers.

The 2005 GTO gets a new engine, the LS2 6.0-liter V-8 with 400 hp. The previous engine pumped out 350 hp. To the relief of traditionalists, an optional hood scoop has been added, along with dual exhaust.

Duane Earl, sales manager at Sawyers Pontiac in East Lansing, Mich., says early criticisms of the GTOs were unfounded.

"There was a lot of bad press about it not looking like the old GTOs of the 1960s and '70s, but that's not what it was supposed to be about," says Earl, who sold 22 GTOs last year and has one order for the new model. "I think now that it is out there and people know what it's about, it will be welcomed."

Next-generation GTO

GM has hinted that the next-generation GTO, scheduled to appear on the Zeta rear-drive architecture for the 2007 or 2008 model year, will be a large departure from the current model.

Pontiac hopes to position the GTO as its version of the Chevrolet Corvette - an aspirational vehicle that is the "soul of the brand," says Pontiac spokesman Jim Hopson.

Pryg said: "There is a real desire to make it striking. "We will start from scratch with something for U.S. tastes. We are going to stretch, but there will only be a few retro cues."

Pryg said that there may be an opportunity for more volume in the next model, "but that's not the first word out of our mouths right now."
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