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Wednesday, August 31, 2005

GM's SUV Strategy

I've written previously that GM's strategy of racing to redo their large SUVs in the midst of a gas crisis is the height of insanity. It seems that only now with the average price of gasoline reaching three dollars a gallon across the country, are they realizing their mistake. Originally they believed that the reason their large SUV sales were plummeting was because the designs were too old and need refreshing. They still feel that the average large SUV buyer is immune to these gas prices however.

If the average SUV buyer is an American, then it's highly likely he is living beyond his means and on credit. That means any change to his budget caused by outside of his control factors is going to be disastrous. I don't know how GM can come to conclusions that are different from the conclusions of every single other automaker in America. I think the truth lies somewhere in the fact that GM really doesn't know what to do at this point. They haven't made a good looking car in years, their only successful market, the SUV/Pickup market, is drying up, and all they know how to do at this point is continue on with the same old plans.

There needs to be a shakeup at this company, and fast. Dramatic changes are coming to the world economy, especially to countries that are dependent on gasoline. The heads of companies who fail to see that do not deserve their jobs, and certainly do not deserve their enormous salaries.

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