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Friday, February 25, 2005

Grading the Players

I'm a sports fan, and read an enormous amount on the subject daily, probably to my detriment. One feature I like of sports writers on the Internet is when they make intelligent arguments about which player is better, which team is superior. I like rankings, and I've always wondered why we never see the brands ranked. So in several parts, I'm going to rank all the major auto corporations, and argue about their highs and lows, and what I think they can do to improve. I've been graded most of my life by people, so now it's my turn to flip the tables. Your arguments pro or con are more than welcome.



Highs: 2005 Mustang, 2006 Fusion, Focus, GT, F-150, Escape Hybrid, Volvo, the fact that the S40, European Focus, and Mazda 3 are on the same platform and no one cares. Mazda is the only example of American executives and Japanese methods working hand in hand well.

Lows: Over dependence on sales of cars with poor mileage, like the F-150 and the Explorer. If gas prices rise anymore, expect those sales to crumble. The 500 is an inadequate replacement for the Taurus, hopefully the Fusion will do better. The fact that the X-type and Mondeo are on the same platform and everyone has an issue. Jaguar is a mess and should never have been bought. Lincoln needs more car support, Mercury is improving but has miles to go, Aston Martins have never been profitable.

Grade: B-/C+. The potential is there, but there needs to be more daring in terms of design. Outside of Mazda, Ford as a whole can be characterized as too careful. Differentiate Mercury from Ford with more options and a larger size.

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Chery on Top

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A decent analysis of Chery comes from the Detroit news here. I've written about Chery before, it's the ultra cheap Chinese car manufacturer that is trying to sell its products here. It's no surprise that Chery has terrible reliability; this seems to be the hallmark of all cheap brands. But the fact that Chery has the Chinese government behind it, means it has an enormous supply of cash to draw upon.

The article for some reason forgets two important factors in Chery's development. The first is that like many Chinese companies, they would prefer to steal their ideas rather than create their own. The above photo is of the Chery QQ, which looks very similar to the Daewoo Matiz, a GM product. GM is now suing Chery for this very reason. For Chery and China to make it in the US marketplace with cars, they will have to have original ideas.

Secondly, comes the idea of financing. People want a new car, and are many times willing to purchase an inexpensive brand like Kia, rather than buying a used, more reliable brand like Honda. The problem is that eventually there is a limit. Cars can be so cheap through financing, that there really is no market anymore for an even cheaper car.

So Chery has a few hurdles, but with the ever diminishing value of the dollar verses the world's currency, I think there might be a market. If the dollar doesn't continue its trend downwards, I doubt it.

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