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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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Wednesday, February 04, 2004

Quote of the Decade for the Auto industry...

Peter Horbury, the recently appointed executive director of design for Ford, Lincoln and Mercury. "Tooling to create a beautiful car costs the same as that to create a mediocre one," said Horbury. "Good design is free. What it takes are talented designers, not bucket loads of money."

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Tuesday, February 03, 2004

The importance of rhythm

The January sales for the automakers are in. It doesn't look good for Ford and GM. Of course the news was rosy for the top three Japanese automakers, Honda, Toyota, and Nissan.

what is one of the main advantages of the Japanese Big 3 versus the American Big 2? Or for that matter the European manufacturers? The importance of rhythm. By that I mean, locking down upgrade and replacement dates for your vehicle models. Look at Ford. They sell the Taurus, and Sable, two cars that are most frequently described as "aging". By letting these vehicles, vehicles which are considered the mainstay of their car sales, "age", they allow the Japanese to take over. Even if a Japanese vehicle does poorly, since a mere 3 years will pass until the next "refreshening", it doesn't really matter. But if an American vehicle does poorly, it is left to languish. Worse yet, if an American vehicle does well, the Big 2 leave it alone for years and years, making only barely necessary upgrades, loathe to improve on the vehicle, and dilute profits. The Japanese, and the Europeans would never do that. Instead they would upgrade. 3-4 years a refreshening, 3-4 years, a total makeover. If the Americans had done this, instead of experimenting with broadening lineups with new SUVs and minivans, they wouldn't have this problem now. Fortunately for them, the Europeans and Japanese seem hell bent on going into every niche possible, and abandoning their core vehicles. It's at this point that the Americans could make a comeback.

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Sunday, February 01, 2004

Surveying the Superbowl

I caught just four companies putting up ads at this SuperBowl, GM, Ford, Mitsubishi, and Dodge. Well, I guess that would be just three companies, as Mitsubishi and Dodge are both basically Mercedes-Benz companies.

You can tell from GM's efforts that they are putting all their bucks into a Chevrolet car resurgence, and Cadillac, the jewel of the crown. Pontiac, GMC, Buick, Saturn, are nowhere to be seen, and if you look a their lineup, you can tell that the makeover for those brands is far from complete. I don't want to harp on this, autoextremist.com does it so much better, but when you have so many vehicles, for the same market, all competing against each other, you come up with problems. The Chicago Auto Show is going on this weekend, and GM has just shown us their entire new minivan line. They've gone away from the rounded look that every other manufacturer has, and gone with a "truck" like look. Needless to say, all four of these minivans are similar in price, similar in function, and similar in look. What incentive do I have to buy a Pontiac minvan over a Chevrolet minivan? Only whichever dealership is closer to me.

Back to the Superbowl. If you were wondering how they were going to market the new Dodge Magnum, (and I certainly was), I think this is the perfect way to do it. A big family sedan, that's superfast, but not really an SUV or a stationwagon. The monkey off your back idea was clever as well.

The Mitsubishi commercial is an attempt to get people to notice their cars, and perhaps just notice the company, period. They compare a Toyota Camry to their Galant with a pseudo crash test. I think this is treading too close to a lawsuit, though the idea is intriguing, Toyota could justfiably sue them for making their vehicle look unsafe.

Have to apologize for the lack of updates, I've been very busy lately. I've got some ideas to write about that you'll see soon though!

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