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Thursday, February 05, 2004

When is it too much?

I was bored today and decided to look at the various starting MSRPs of sedans of several auto companies. (You can tell I have no life). I noticed a few things, and decided to count how many sedans between the 15 thousand dollar range, and the 25 thousand dollar range car companies had. Here are the results:

GM(Saturn, Chevrolet, Pontiac, Buick): 8 cars
Ford/Mercury: 4
Chrysler/Dodge: 4
Toyota: 3
Honda: 1

So GM has a full 8 vehicles to cover a market share that Honda only thinks deserves one vehicle (the Accord). I cut corners as well, I didn't count coupes, I didn't count truck like vehicles that had a car platform (PT Cruiser). Honda is considered by many to be a company at the height of efficiency.

How would a GM fan respond to this count? They'd probably say, that GM is making different vehicles for different people. A Pontiac Grand Am is more sporty than a Chevy Impala. In theory this is so. In reality, there isn't much difference between the two vehicles, and there are obvious part sharings. The automatic shifter in both is identical, as is the parking break. So are buttons on the dash board.

What's my point? If GM were willing to spend billions of dollars to make sure every one of their vehicles in this price range was dramatically different to convince potential buyers, then I would support this attempt to inundate the market. Instead, they try and make several mediocre vehicles succeed at the same mission. And of course, they fail. The Toyota Camry outsells anything GM has in its price range, by far. As large and powerful as GM is, it doesn't have the resources to make a different platform and design for each car. The new Malibu, and the upcoming Pontiac G6 are VERY similar, and subsequently will suffer in the marketplace. When a person is deciding between a Malibu and a G6, and when they see photos on the internet of both of the interiors of these cars and how similar they are, he will go for the cheaper vehicle every time. Leather appointed seats, and maybe a few more horsepower just won't cut it, unless you can convince the customer there is a substantial difference in vehicles.

GM and to a lesser extent, Chrysler, and Ford, need to take a risk. They need to put more eggs in one basket. That sounds like an anathema to good business sense, but in the auto industry it is the only way to succeed. That one vehicle will have billions and billions spent on its research and development, and if organized properly, will be a better car than an Accord, or a Camry. As good of a car as the new Malibu is, it just doesn't compare to the Accord. If Chevrolet, Pontiac, and Buick had less models, instead of diluting their limited budgets with new SUVs, and experimental coupes, money should be spent on the mainstay of these marques: the sedan.

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