Quote:
Originally Posted by goblue
While this is technically correct, all of you are missing the key point in the article.
Toyota suffered because their product mix in the dealership was wrong. A relatively easy thing to fix.
GM suffered because their small cars are not competitive and their midsize cars just became competitive. The only place GM has significant advantage is in large crossovers. IE people dumping BOF SUVs who still want space.
In other words, Toyota can use their newer, more flexible plants to fix the problem. GM can't sell competitive cars that it doesn't even have ready to go, let alone in plants currently.
Toyota and GM didn't fall victim to anything. Neither one did anything stupid in regards to SUVs / Trucks. No one could predict the tipping point ahead of time with any certainty. Everyone knew they'd take a bath when it finally hit, but there was lots of money to be made in the interim. This is where the media gets it totally wrong. The companies were taking calculated risks, thats what you do in business. They both have hedges - GM has the VOLT, 2 Mode, E-Flex, mild hybrids, E85, diesels, excellent large crossovers. Toyota has hybrids, great small cars, a fantastic midsize reputation.
What happened is the tipping point came a little too soon for GM, and simply surprised Toyota which in 2008 was better setup to deal with it. Had this happened in 2010, it might be different.
|
All of the above is very accurate. Conditions just arrived a lot faster than anyone could have imagined. Just by being a player in the BOF segment every member is getting hurt. Those that weren't players such as Honda gave up HUGE profits over the last 15 years. Those that weren't players such as Honda aren't stuck with lot anchors in the short term.
To read anything more than this being a shortterm serendipitous situation for HOnda and Hyundai and Mazda is reading far too much into it.
As you correctly said, if it happened 18 mo's later GM and Ford would be fairly well along in a new direction. This just sped up the changes that were started in 2001 and since. Case in point, the lambda's and the Edge are well positioned and fully market-ready to catch all the defectors from the Tahoe/Yukon/TrailBlazer/Envoy and from the Expedition/Explorer respectively. Both companies saw what was occuring. It was all over the monthly sales stats since 2003. Their midsizers are just as good if not better than everyone else's. The only glaring gap is in the compact segment where both entries are mediocre. They haven't been able to bring these up to competitive levels across the board....and make a profit from them.
For Toyota its a minor inconvenience in the long term. Fast forward 2 years and one of its three BOF plants may be converted to some kind of unibody vehicle plant. It's a temporary hiccup for a company with no debt.