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But you need to have a big quality difference between the mid level and premium brand.

Assuming that you are building your premium brand as well as you can build a car, that means that you are intentionally building your budget line at a lower quality. One some things quality costs (more metal, tighter specs with more parts thrown out), but other things cost nothing or so little it doesn't matter. GM was the worst because then had to make a Cadillac better than an Oldsmobile, which was better than a Buick, which was better than a Pontiac, which was better than a Chevy. Throw in Hummer, Saturn and a few other brands in that stack and you either don't have room for differentiation or you have to make your Chevy really, really crappy.

My bet on the next car line to disappear is GMC. Its sole reason for existance was to allow Cadillac, Olds, Buick and Pontiac dealers to sell rebanded Chevy trucks. Just dump GMC and make all the trucks Chevies (or dump Chevy trucks and make them all GMC).

Assuming that you are building your premium brand as well as you can build a car, that means that you are intentionally building your budget line at a lower quality.

Not always. Things like wood and leather trim, premium sound systems, uprated engines, and sat nav systems as standard features rather than add ons. This does not mean that the mid range brand is poorly built. It just doesn't have all the gingerbread.

Last year when I was looking for a car I seriously looked at the Fords and Mercurys. There simply was no difference in the option packages, trim or fit and finish. Ended up going with the Mazda (Ford engine frame and drive train but with a better styled, and several hundred pounds lighter) body.