Saturday, April 02, 2005
It seems that every week one of these announcements is made. American manufacturers' sales are down. And of course the cost of fuel is mentioned as a reason.
Why does the mainstream media refuse to acknowledge the possibility that perhaps, just perhaps, that the earth is running out of oil? The only manufacturers who are readily building fuel efficient cars for the American market are Japanese. Where are the hybrids from Nissan, GM, Chrysler, or any European manufacturer? Where are the high quality small cars? Mustang sales alone are not going to save Ford, when that company is completely dependant on F-150 and Explorer sales to keep it solvent. And the fact that much of the Mustang's profit comes from the gas guzzling v8 doesn't help things.
Companies need to wake up and face reality. I can't believe that highly paid, highly educated executives who have worked in the business for decades lack a complete knowledge of the oil market. For General Motors, Mercedes, and Nissan to invest billions in new heavy SUVs and pickups is just mind boggling. The price of oil is not decreasing any time soon, and the national average will be 2.50 by this summer driving season. Don't believe me? Invest 500 dollars in stock of any major gasoline distributor. I guarantee you in six months that stock will grow at least 50 percent in value as they rake in the profit. There just isn't any more oil in the world to feed the demand of a growing American, Chinese, European, and Indian economy together. There just isn't.
In the meantime before we jump to an alternative fuel in two decades, we need something to get by. Be it hybrids, completely battery powered, or alcohol, investments need to be made. The companies that don't invest will be goners. It's as simple as that.
Thursday, March 31, 2005
A blog by someone who actually works for one of the Big 3! Check out Auto Prophet in my links section.
Wednesday, March 30, 2005
Honda arguably makes the most reliable cars on the road giving consumers possibly the best bang for the buck. So why are sales down dramatically?
Like I said before when grading Honda, you can't let a calendar year go by without having a major all newly designed vehicle brought to market. 2004 saw no new Civic, Accord, RSX, NSX, S2000, nothing. Certainly there were additional hybrid trim levels that were available, but Honda has taken a unique poorly selling route by marketing their hybrids as not a separate vehicle, but rather a vehicle option.
Honda demonstrates even more than GM that all that really matters in the end is design, specifically design that is updated regularly and keeps with current fashion. If reliability mattered above all, or value, every European manufacturer would be bankrupt. What matters is design. Certainly reliability plays a role, which is why Jaguar is no longer an independent company and constant money loser. But people want to buy the latest fad when they are in the mood to buy a car, and Honda is not it.
One of the biggest markets being untapped right now is the high quality compact car. There are only, get this, TWO cars that sell for under 20k, that have DVD navigation as an option. Two. They are the Mini and the Mazda 3. Both sell extremely well, with the 3 being the best selling car in Canada.
As fuel dwindles and goes up in price, car manufacturers who sell in America should look at the Canadian market for a glimpse at the future. Canadian auto tastes are virtually identical to the United States, and the exact same manufacturers sell there for the most part. And what are the best selling vehicles? Small, fuel sipping, high quality cars. In the coming months, expect Mazda to do extremely well in America.
Sunday, March 27, 2005
This article by Daniel Howes of the Detroit News is spot on about what's going wrong with GM. It's not just the 2 billion wasted on Fiat, or the overpaid retirees from the UAW, the source of most of the trouble is two decades of poorly engineered, poorly designed cars. But you already knew that.