Domestics luring back buyers

[Ming]

Domestics luring back buyers
Automakers ready to reclaim clients
Jim Mateja and Rick Popely
Chicago Tribune
Mar. 12, 2005 12:00 AM

For more than a year, domestic automakers have been insisting that new vehicles would lure buyers back from imports, which for some time have been gnawing away at their market share as well as profits.

There's some evidence they were right.

Chrysler Group, for example, posted earnings of $1.9 billion in 2004 after losing $637 million in 2003.

The reason? The launch of nine new vehicles, led by the Chrysler 300C sedan that accounted for 36 percent of all Chrysler brand sales for the year.

"The car market didn't go away the last few years. It's just that we left the market to the imports," said Joe Eberhardt, executive vice president of global sales and marketing for Chrysler Group.

General Motors Corp. officials feel much the same way.

"Our resurgence, any resurgence, depends upon and is led by the lifeblood of this industry: new product. At the end of the day, the best product always wins," GM President Gary Cowger said.

But despite introducing a raft of new products, GM sales last year slipped 1.3 percent to 4.6 million vehicles, and its market share fell to 27.5 percent from 28.3 percent.

What went wrong? Most of the new machines didn't come out until late in the year, GM Chairman Rick Wagoner said.

GM has such vehicles as the Chevrolet HHR, Pontiac Solstice roadster, Hummer H3 and Buick Lucerne on the way.

Ford's new sedans are doing well because they offer all-wheel-drive, which the Japanese sedans don't. Demand is so brisk that Ford can't say when supplies will catch up.

Article Source: http://www.azcentral.com/arizonarepu...2domestic.html

[Havasavana]

It seems to me there are two aspects to determining what to offer in the way of cars; style vs. practicality. I'm not much of an artsy person so to the style aspect is black art to me. The PT Cruiser was a wild swing that worked, and it's now viewed as genius. It could just as easily have bombed and would be viewed as foolish. It's a matter of guessing informed by whatever market research can be done. For this reason, the success of cars based on style is unreliable.

On the practical side, it seems to me there are factors than can be identified and these factors are likely to be of value over a reasonably long period. Such things as purchase price, fuel economy, safety, durability and reliability are examples. It seems to me that this is where Honda and Toyota have done very well compared to GM and Ford. And there is no question that GM at least could have done and can do much better than they have and are. I just don't believe that GM does not have or could not hire engineers to design engines just as good as what Honda and Toyota offer, could not design and build cars just as good as the Civic/Accord/Corolla/Camry. This is not guesswork or luck, it's just sound business and solid technical work. It's hitting singles all day instead of hoping to get lucky now and then. Even if GM had to sell these cars at cost and didn't make a dime, at least it would have deprived the competitors of the profits they made, and GM would be recognized as having quality as good as anyone.

Obviously these decisions are made at the very top. From everything I see, the people at and near the top of GM are not up to the task. Yes, GM products are improving, but so are the competiitive products, and, in the public's perception, GM/Ford are still behind. So improving is not enough. GM market share has and continues to shrink. This is fact. Believing and hoping for a turnaround in this trend is just faith and hope at this point. Time is surely running out for GM. If they begin to lose money consistently, and I will not be surprised to see that this year, they will soon be unable to even keep up, let alone gain. We have seen multiple indicators that the top GM people are failing. Time for a change it seems to me.

[tgagneguam]

Domestics luring back buyers.

Really, I must have missed that memo. It may be occurring in certain pockets of the auto industry, but I'm inclined to believe otherwise for right now. If they were reclaiming lost share, then their overall market share would be up. Last year, it hit a record low. And despite Chrylser being up last year, there was a time not too long ago that Chrylser was at the 16-17% share range, which, ironically, is close to Ford's present US market share.

I would definitely love to see the waters rise to lift all the domestics, but unfortunately that's not happening.

Keep your noses to the grindstone, Chrysler Group, Ford, and GM. Eyes on the prize, and all that stuff.

[ibechip]

Eventually it will all balance out but will Toyota be ahead by that time? They seem to have quite the advantage over GM.

[Askani]

Ford's new sedans are doing well because they offer all-wheel-drive, which the Japanese sedans don't. Demand is so brisk that Ford can't say when supplies will catch up.

- I thought the FORd lineup was pretty much bombing? I feel horrible about it, as all domestics should do good, but I can't remember the last time I saw a 500 on the road.... Maybe Miami just sucks...

[Swahili]

I think that when GM gets their new products up and running at full production capabilities and get rid of the older models (i.e. Cavalier etc) they'll start increasing sales and taking back some market share. The General's new cars didn't debut at an optimal time so maybe having a full year of production now will be a bonus. I still firmly believe that when the Revolution is completed, GM will be giving the Toyotas of this world a lot of trouble and tough competition. Chrysler has done well with their new models, reports go both ways for Ford and their new models, GM I think will show a lot of promise this year. Here's hoping that Detroit has some success over the next few years, enough to keep them in the game so they can continue to battle Japan.

[parakleets]

After what seems like a really long time, I am starting to see Ford Five-Hundreds, Mercury Montegos, Buick LaCrosses, and Pontiac G6s. These are four of the newest American sedans on the market, and their initial sales seemed low (to me), based on what I was seeing on the roads. The Cadillac STS, also new this year, seemed to be all over the place (at least where I live) within weeks of the on-sale date. Chrysler's Dodge Durango and Jeep Grand Cherokee also seemed to be off to slow starts, but they really seem to moving quite well now.

[ByTheLake]

I have not seen evidence that the domestics have started to lure back buyers, except for occasional hits like Chrysler's 300. When the incentives can be reduced or eliminated, then I'll start to feel more comfortable.

GM absolutely must innovate to maintain its sales leadership. Looking at GM's innovations over time is impressive, especially in the first half of the last century. GM even manufactured the Apollo navigation systems for the moon landings, and manufactured the lunar rover for NASA in the early 70s.

What about innovation today?

Oh, you could point to the hydrogen research, but its arguable that GM isn't leading in this field. In addition, GM's tardiness to the hybrid market is a shame.

The Avalanche was a rare creative twist, offering something that no other company offered. Can anybody think of any other real innovations? Skip the Envoy XUV ... power sliding roofs were done in the 60s.

If I were Rick Waggoner, I would insist that every new GM vehicle have an innovation or feature that no other vehicle in its segment offered. I would insist on tireless attention to customer desires.

Today, GM seems to spend most of its creative attention on incentives, not the core products. And with a good percentage of GM's engineers now working as contractors, is there a desire for them to work long, tireless hours to innovate for the good of the company?

[chadbarb99]

This might be a little off-topic but I've been reading that the Pontiac G6 hasn't been selling well and I think I know why, because right now they're selling only one trim model the 4 door V6 GT model. Lets see what happens when the 3.9L V6 GTP with a 6 speed option, the coupe, the drop-top, and even the 4 cylinder base model comes out, then and only then can people judge how they are selling we need to be patient. The Ford 500, now I'm not a Ford guy (grew up with the Ford vs GM philosophy and can only own one or the other) isn't a bad looking car but needs a much more powerful engine than what it has and when that happens it will sell well I think. The Ford Fusion will be a great competitor against the bland Camry's, Accords, and maybe Altima's and even want to see a comparo against our very own Malibu's and G6's. All and all the domestics will be back just takes time I guess

[dindak]

Cobalt should sell huge numbers for GM once supply catches up. The local dealer still only has 3-4 on the lot. They do have a nice SS coupe though.

Unfortunately G6, LaCrosse and others will not boost share much, they just aren't the 300 in terms of must have appeal.

[chadbarb99]

One more thing I forgot to mention, with Ford offering AWD in the 500 when is GM going to do the same?? I think an Impala or Grand Prix AWD with V8 DOD would definitely kick the crap out of those bland Camry's and Altima's in sales as long as the prices would stay reasonable.

[Driveshaft]

Perhaps the flare up is a fluke as any new lineup is popular, because the old is out and the new is in. People will buy a brand new cobalt as opposed to the old platform Cavalier.

I don't think any real conclusions can be made for a long time.

[Codester66]

maybe we're seeing something take place that goes deeper then just the american auto industry. i constantly see and hear signs that america itself is changing, and that maybe we shouldnt expect the same things of the past

[pupp1]

Originally Posted by Driveshaft

Perhaps the flare up is a fluke as any new lineup is popular, because the old is out and the new is in. People will buy a brand new cobalt as opposed to the old platform Cavalier.

I don't think any real conclusions can be made for a long time.

This is not a fluke by any means.If you have your product is rightly priced and aimed at a targeted public, you will allways do well.The Cobalt isn't selling as much as the cavy did because of the price.Allthough the Cobalt is a very nice car and worth the money, it hasn't made any waves with the general consumers.After people get used to the idea of the Cobalt being a better car and being priced accordingly, it should sell well.IMO, Cobalt will be the best seller GM has to offer.

[Globalist]

Originally Posted by ByTheLake

If I were Rick Waggoner, I would insist that every new GM vehicle have an innovation or feature that no other vehicle in its segment offered. I would insist on tireless attention to customer desires.

If I were Rick Wagoner, I will do the following:

1) Do an engineering self-assessment: This exercise is to build clone vehicles from top competitors and determine where is the gap. Focus on the gaps between clones and competition vehicles. This is were GM problems are engineering wise.

2) Fire people who have been in charge of planning in the last 10 years. They missed too many things.

3) Bring fresh blood to the corporation, and empower them to take bold decisions without being punished.

4) Hire more European designers (from BMW, Audi and VW).

5) Redefine the identity strategy for GM brands (except Cadillac). And review GM ads.

6) Ask UAW leaders to re-open negotiations, otherwise no new plant will be built in the U.S. and new programs will move outside. If they want to strike, fine. I don't think GM has anything to lose at this stage.

7) Tell GM people in a speech the following joke:
"A GM guy met a Toyota guy in a conference. And they started talking about who is better. Then the discussion moved to balls. And the GM guy says: my balls and yours adds to 4, right? The Toyota guy replied: why do you have only one?"