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

NoOption5L@xxxxxxx wrote:
On Jul 4, 5:12 pm, Michael Johnson <c...@xxxxxxxxx> wrote:
NoOptio...@xxxxxxx wrote:

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.

That was only a piece of it. A large part was the huge concessions to
the union -- few paid as well as Ford, GM and Chrysler.

The UAW, GM and Ford are all circling the drain while they have each other in a strangle hold. Chrysler will probably go down with them. I think GM might be the only one to survive this whole mess.

They also don't
ignore their car line for years on end to push SUVs on their customers.

While the domestics certainly went overboard relying on the lucrative
SUV/truck market, they certainly did not "push SUVs on their
customers". Customers were demanding those big rigs.

True. The just quit fighting for those customers that wanted to buy cars.

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.

They're trying. The Titan didn't score as big as Nissan had hoped,
but maybe the Tundra could do better if it doesn't have any more
recall issues.

The thing with the Japanese automakers is they will keep trying until they score a hit. Toyota is doing it with the Tundra. Mark my words, in 3-5 years they will have a substantial portion of the full size truck market.

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.

Agreed. And I must add it's sad they don't know the youth market.

Ford got a good start with the Focus and just gave up. I swear they must be brain dead over at Ford's marketing department.

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.

Yes they do, but they also have to offer "dream cars"/image cars --
cars that appeal to the youth market. Toyota realized that and
introduced Scion.

Toyota seems to do just fine though without a stable of dream cars. I will tell you though that they are cleaning up with the Scion in the youth market. They spend a lot all the way down to the dealer level to keep kids interested in the brand. I was impressed with what they offer for around $15k-$17k. Plus they have set prices for each model and trim level. There is no haggling on price so the dealers can't gouge the buyers. It builds loyalty and gives the kids a very good car at a decent price. The dealer makes just a few hundred dollars on a Scion sale. Plus, Toyota has one hell of an after market parts catalog for those cars. All the way from bling to serious blowers.

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.

They help like Lexus does.

The thing is though Lexus buyers were likely previous Toyota owners and not vice versa. Ford never gets the customer initially to move them up to a Lincoln. Someone that can only afford a Taurus or a Fusion probably doesn't care how good the Lincoln or Mercury brand might be. IMO, they are two different markets but Ford sucks in both of them.

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.

Personally, I think the Focus was the best entry level ever offered by
the Big 3. But Ford made the mistake of letting it age without
significant upgrades/redesign.

To be honest there is no reason the Fusion couldn't have been named the "All New Focus". I still say that Ford killing off their bread and butter brand names like the Taurus, Escort, Focus, Contour, Probe etc. is one of the biggest marketing blunders of all time. Especially the Taurus brand. That car had one hell of a customers base that they just threw in the garbage. At least now they are trying to correct the error. We have a 2003 Sable with the Duratech engine and loaded with options and I can say without hesitation that it is a great car. Especially, having paid less than $20k for it. It isn't a Lexus or Acura but considering the price it has more than given us our money's worth. There is no reason the 500 couldn't have been the "All New Taurus".

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.

At this point, I can see at least one of them going under and the
parts being sold off.

If I had to make a prediction today I say that only GM will survive as an independent business entity.

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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