Saturday, July 09, 2005

The Downside to Discounts

Now that every American manufacturer is giving consumers the employee discount, it stands to reason that someone would write disparagingly of this strategy. And they did. I'm on the fence when it comes to this strategy myself. On the one hand it sells cars that normally wouldn't sell or at least wouldn't sell as fast. On the other hand it raises some issues:

1. It might make your cars look cheap. American cars have a reputation, undeserved mostly now, that their cars are "cheaper" than Japanese or European ones. This doesn't help things, especially since all the companies doing this are American.

2. The people who are buying the cars are really not new customers, but future customers who are buying now when they see a deal rather than later. This means there will be a huge drop off in sales in a few months. This is probably true for at least some of the sales.

3. When the new models come out, will they be differentiated enough from the discounted 2005 models? If they aren't, then see issue number 1 again. I believe for many of the vehicles that GM is giving the discount to, we are going to see new ones next year, such as the Impala and the Monte Carlo. But we will still see the same LaCrosse, Cobalt, Aveo, many of the pickup line etc.

On the bright side, there have been some product improvements by GM, and if there are any conquest buyers, they will realize that GM has a new product. For a company like Chrysler which is only offering the discount for its poorly selling models like the Neon, and the Sebring, I don't see the point of having this at all unless a replacement is coming soon. I think Ford and DCX are still locked into a Detroit mindset where the only competition they are aware of is down the street rather than across an ocean. I don't know if I like where things are heading for the domestic automotive industry in America.

(2) comments

Thursday, July 07, 2005

Learning to Drive Stick

Like most Americans, I have spent the vast majority of my driving experience with automatic transmissions. I never really wanted it this way, but because I've had to share my car with other members of my family, I've had to contend with their as well as my inability to drive stick shift. Recently, I've become determined to learn to drive stick for a couple of reasons. One, as an automotive enthusiast it just seems ridiculous that I didn't know how, and two I am moving to England later this month, and if I am to buy a car there, I'll probably be forced to buy a stickshift. So I rented a stickshift, and with help from my father who knows how to drive, I learned.

I can say after a few hours I am a capable but not perfect driver of stick. Getting the car into first gear isn't the hardest for me anymore, it's getting the car from first to second gear that was troublesome. I rented a beat up Ford Escort from a company called "Rent A Wreck" in Pasadena, California. I didn't even realize that Ford made manual transmissions in the Escort, and I was convinced that this car would be difficult to learn on because of it's broken down appearance. The transmission was very forgiving however. An hour was spent circling a suburban block by my home initially, and I was unable to easily shift into first gear. After taking a break of about half an hour, I resumed and was able to overcome this obstacle. The squeeling of tires due to a poor upshifting from neutral to first stopped, as did the stalling from a stop. There still was a bit of jerkiness while switching to second gear from first, and I didn't realize until well into the lesson that if I stop the car in third gear at a stop sign, I didn't have to cycle through the gears to first, but could just go directly to first if the clutch was depressed.

Driving in stick makes you one with the vehicle. I guess the closest thing to learning stick would be like learning a new Jedi power. I can "feel" the car talking to me, asking me to apply more gas lest it stop completely, or getting angry to the point that I must upshift to a higher gear. It's really an amazing feeling, and now I have an air of superiority over most of my fellow citizens who do not know how to drive stick, and are stuck driving bland easy to drive automatics.

I hope that I never have to drive an automatic again, I really can't see myself going back. Driving stick is safer than automatic because as a lazy society automatic transmissions promote eating while driving, talking on the cell phone while driving, applying makeup etc. Even while we are driving we are multi-tasking towards things that are much less important, while the incredibly important and dangerous task of driving is being ignored. All these things are difficult, if not impossible, while driving manual.

One final note. As I have mentioned before, and above, I am relocating to England later this month. I write this entry on the very day the terrorist attacks occurred on the London Underground subway. I hope that the British are undeterred in their daily routines by these attacks, and judging from what I have seen of the average Briton on television today, they are taking an attack on their home soil much better than we did with a great deal of stoicism. Of course that's probably natural considering the amount of bombing they suffered in World War II. If they will go on with their lives normally, then the least I can do is go on with mine as well, and not delay my move to London. Terrorism only really wins if "terror" is achieved. I wish them and us good luck in combating and dealing with a growing world wide threat. I hope cooler heads prevail in this time of troubles and the use of weapons really do become a last resort however.

(7) comments

Monday, July 04, 2005

Quick Note

If they were to give a Times Car Company of the Year Award, that is an award to the car company that has been in the media spotlight the most this year, GM would be the hands down winner. The latest GM front page splash? Employee Discounts and the wild success they have been.

Truck sales have seen a 75 percent rise, but car sales only 3 percent. I'm firmly of the opinion that this new sales move is akin to the initial stages of heroin addiction and the medicinal benefit that might bring. Not good. Car sales not going up dramatically means that no matter how cheap they are, people will not buy GM cars. The good news is that GM trucks are of a good enough quality that even in times of high gas prices, people want them if they can get them for a bargain price. The worst news is that gas prices are increasing steadily with no end in sight. Some prominent oil analysts predict 100 dollars a barrel. Uh-oh!

Other companies are planning on jumping on the sales drug addiction. This is important because it will increase sales, but it will tell the industry which products are strong sellers and which are not. Weaknesses in lineups will be magnified. Whatever is a quality product will sell well, whatever is ugly will not.

It is a time of desperation for the auto industry. This sales strategy is a desperate strategy, but it is also a valuable lesson. No matter how cheap you sell it for, if it's ugly and not made well, it won't sell. People will spend more for what they perceive is aesthetically pleasing and what they believe is high quality. This rule could pertain to a lot of products, but for something that is so important to its owner as an automobile, it is crucial to learn.

(0) comments

This page is powered by Blogger. Isn't yours?