Re: Semi OT: Domestics take another hit in market share
- From: Joe <dinner@xxxxxxxx>
- Date: Thu, 05 Jul 2007 16:24:22 GMT
Michael Johnson <cds@xxxxxxxxx> wrote in
news:bKqdncxn7_bRxhHbnZ2dnUVZ_oWdnZ2d@xxxxxxxxxxxx:
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.
The Tundra was the only truck that came away with a 'Good' rating in the
safety tests.
To cut the length of the slide, the Big-3 need to:They don't have the capital for a broad based reinvention of their
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.
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.
And _that's_ where the big dollars are. The Big 3 still don't realize
that aftermarket is big profit. That and service. If a dealer's got a
great service department, it feeds both sales and service.
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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