Re: Semi OT: Domestics take another hit in market share

NoOption5L@xxxxxxx wrote:
On Jul 4, 11:42 am, Michael Johnson <c...@xxxxxxxxx> wrote:

Hi Mike!

The Big 3's problem is they have forever lost an entire generation of
buyers -- the current 25-40 age group. (Most won't even consider a
domestic.) They saw their parents get taken after buying inferior
domestic models and were preached at/heard [from their parents] for
years 'I'll never buy another GM, Ford or Chrysler product again'. On
top of this, the Big 3 lost the youth market by not investing in entry
level cars & entry-level performance cars. So instead of growing up
worshiping Trans Am pony cars this generation grew up craving Evo's,
Skylines, turbo DSMs and Supras. The result: the Big-3's market share
will continue to slide for years to come.

What I hear from people in the know at Toyota is the domestics leveraged themselves too far when buying other automakers and fringe businesses. They ignored their car lineup and now don't have the capital or repeat customer base to stage a meaningful come back. Toyota knows their customers and target markets then delivers what they will buy. They don't get distracted by unnecessary acquisitions. They also don't ignore their car line for years on end to push SUVs on their customers. The domestics handed the imports this part of the business for a decade and now they are seeing the results of this. Now guess what? The imports are going after the full sized SUV/truck market with a vengeance to deliver the coups de grace to Ford and GM.

To cut the length of the slide, the Big-3 need to:

1) Heavily invest, and keep investing in, very GOOD entry-level cars.
And then offer hotted-up perfromance models of these cars.

Letting the Focus age, discontinuing the Neon/SRT-4, and not offering
a competitive Cobalt is a huge mistake.

They don't have the capital for a broad based reinvention of their entire lineup. IMO, they also don't have the marketing savvy for pulling it off.

2) Make [more] desirable performance cars -- i.e. new Mustang and
Corvette.

It helps but it is bread and butter vehicles like the Camry, Taurus, F150 that pays the bills and generates profits.

3) Make very competitive top-tier cars.

Cadillac is doing it, but where is Lincoln and Chrysler?

This helps too but it doesn't pay the bills and increase overall market share, IMO.

4) And, of course, make excellent "American" sedans. Chrysler's LX
sedans pointed the way, but the Big-3 also need a RWD Impala and Ford
sedan -- some good red, white and blue alternatives to the Japanese
offerings. I suggest they read the Harley Davidson play book.

Bingo! Ford needs to concentrate of bringing a new Taurus to market that redefines the segment like the first one they offered. Then they need something like the old Escort. It wasn't pretty but they sold them by the truck load because it was what sold. it seems like the domestics have given up the fight for market share. They think there is a place for them as a niche builder and they are sadly mistaken, IMO.

Patrick

It looks like the domestic automakers still can't stop the bleeding.
Maybe I am being too much of a pessimist but things are looking worse
for GM, Ford and, to a lesser extent, Chrysler. One thing I noticed in
this article is how Toyota's Tundra sales are increasing and Chevy's
full size truck sales were down 25% compared to June 2006. IMO, Toyota
is looking to rip the heart out of the Big Three by putting substantial
resources behind their full size truck sales. Here's the article:

Japan car makers lift US market share

By Bernard Simon in Toronto

Published: July 3 2007 20:07 | Last updated: July 3 2007 20:07

Japanese car makers took another sizable bite out of the US market share
of their Detroit-based rivals last month, thanks to their strength in
small and mid-sized cars and their relatively low dependence on the
car-hire industry.

Toyota, Honda and Nissan reported sales increases of 10.2 per cent, 11.5
per cent and 22.7 per cent respectively compared with June 2006.

ADVERTISEMENT

By contrast, General Motors' light-vehicle sales tumbled by 21.3 per
cent. "It was a pretty tough month for us", said Paul Ballew, GM's
normally upbeat sales analyst.

Ford reported an 8.1 per cent decline, and Chrysler a drop of 1.4 per
cent. There was one more selling day last month than in June 2006.

Both GM and Ford ascribed their declines partly to intentional cutbacks
in low-margin sales to the car-rental industry. The two companies
reduced daily-rental sales by a combined 181,000 units between January
and June from a year earlier.

Mr Ballew described overall market conditions as "challenging", owing to
the spike in fuel prices and the housing slump, especially in California
and Florida. Mr Ballew estimated that industry sales were about 6.5 per
cent lower in the first half of 2007 than a year earlier.

Buyers are continuing to migrate from big sport-utility vehicles and
trucks to smaller crossover vehicles and passenger cars. Crossovers look
like SUVs but are built on car platforms.

Nissan's performance underlined the sharp shift in buying patterns.
While its car sales surged by 55 per cent, SUVs and pick-up trucks
contracted by more than 10 per cent.

Ford's crossover sales were 83 per cent higher last month than a year
earlier. Another consolation for Ford is a steady revival of its luxury
Lincoln brand, with retail sales rising for the ninth month in a row.
Total Lincoln sales were 14.5 per cent higher in the first six months
compared with January-June 2006.

Industry sales last month were buoyed by discounts and other incentives.
According to Edmunds.com, an online car pricing service, the six biggest
carmakers all lifted incentives last month.

While Toyota's average incentives of $1,308 per vehicle are still far
below those of its Detroit-based rivals, they have jumped by more than a
third in the past year.

Demand for the Tundra pick-up truck more than doubled last month, helped
by perks totaling as much as $3,500 per vehicle. Toyota has described
the Tundra, which arrived in dealerships last winter, as its most
important vehicle launch in half a century.

Mr Ballew said that GM had been surprised by the extent of its rivals'
incentives for full-size trucks. Sales of the Chevrolet Silverado, one
of the Tundra's main rivals, slid by more than a quarter last month."

http://www.ft.com/cms/s/f665075e-2996-11dc-a530-000b5df10621.html


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