How GM Can Keep up With Japan's Next Big Weapon: Planned Obsolescence

[sigma]

Originally Posted by Ming

Sigma, I'm so depressed by your Avatar. Hehe, finally saw the movie last night. Good stuff.

That is another way of looking at it and I have considered it. But will people on the street see the new Impala as a "fresh new Grand Prix"? Or the LaCrosse? I kind of doubt it. Instead people will see a single car that has gone largely untouched for 4-5 years, and the brand image will be damaged.

It does still have that problem of the specific model staying fresh, which it wouldn't and doesn't in today's GM. Part of the problem is too many overlapping models, and overlapping brands. What's the difference between a Malibu and G6? I can, im my mind, define what the differences should be. The Chevy should be the mainline sedan, with the Pontiac featuring the bigger engine, stick shift, bigger brakes, stiffer suspension, basically what Pontiac was, back in the day, a really supped up performance Chevy. Not just a rebadge.

[ocmdog]

Great article, Ming. I loved it. Good insight.

All GM needs to do is follow that and it's golden. I think of it as "continuous evolution". I like it.

[Havasavana]

There seem to be several trends within our society at present which should affect the car market. Of course we will always have a segment of society who want, and can afford, or at least finance, the latest gadget-laden vehicles. But, with the middle class shrinking as a percent of total population, and the higher-than-inflation increases in major expenses like energy and medical care, will the segment of the population that can afford a new vehicle, with the latest goodies, shrink? If so, they'll be buying used stuff or simpler and cheaper cars. Of course this will be a ready-made market for the Chinese, etc. manufacturers. Also, cars are very expensive to fix. I suppose this is partially a function of reducing manufacturing (assembly) cost by putting more pieces into modules that can be made off shore then plunked into the final product in a fraction of the time needed to install several parts separately. So this might make used cars less popular and give more people incentive to consider a cheaper car produced off shore. So, all together, I'd think there will be some incentive to produce simpler cars for longer periods as a means of reducing cost and improving the reliability that the customer gets for that cost.

[New_Mexico_Sunset_on_Rt66]

You know? I'm really sick of this fascination with Japan. I've read all the books.

[FireStorm2k]

i 100% agree with you ming.. i hope GM will be reading this

[FStephenMasek]

This discussion brings to mind the '55, '56, '57, and '58 Chevys. There were significant changes in styling from '55 to '56, a much more significant change for '57, then a complete interior and exterior re-design for 1958. GM was also very busy with Pontiac, Buick, Oldsmobile, and Cadillac during the same timeframe. As a company, they seem to have forgotten most of what they once knew so well.

I won't violate the copyrights by cutting and pasting the images, but here are some nice photos to ilustrate this:

1955:
http://www.seriouswheels.com/1950-19...e-White-FA.htm

1956:
http://www.seriouswheels.com/1950-19...Blue-White.htm

1957:
http://www.seriouswheels.com/1950-19...top-Red-FA.htm

1958:
http://www.seriouswheels.com/1950-19...le-Aqua-po.htm

[FireStorm2k]

Originally Posted by FStephenMasek

This discussion brings to mind the '55, '56, '57, and '58 Chevys. There were significant changes in styling from '55 to '56, a much more significant change for '57, then a new chassis and a complete re-design for 1958. GM was also very busy with Pontiac, Buick, Oldsmobile, and Cadillac during the same timeframe. As a company, they seem to have forgotten most of what they once knew so well.

i think it's just that they had a LOT of money back then.

[stormwatcher]

Originally Posted by Ming

While it may be tough for GM in its current financial state, I can guarantee that cash-rich competitors like Toyota will use planned obsolescence as a bludgeon against GM if they choose to ignore it.

Very good article Ming, but I think you are using the term planned obsolescence incorrectly; at least as most people commonly understand it. The phrase planned obsolescence in North America tends to have a very negative connotation meaning a short functional life for a product before it ceases being functional with this obsolescence engineered in by the manufacturer.

[Ming]

Originally Posted by New_Mexico_Sunset_on_Rt66

You know? I'm really sick of this fascination with Japan. I've read all the books.

I overdo this a lot and find myself saying "When I was in Japan", only because I spent a third of my life there and still speak it at home with my wife. Its hard for me to totally isolate my experiences there and forget about them. This being the case, I have to watch it or I end up inflicting this "fascination" of mine on people to whom life there is a distant and foreign thing, and therefore irrelevant. It also starts to sound like: "This one time, at band camp..."

[Ming]

Originally Posted by stormwatcher

Very good article Ming, but I think you are using the term planned obsolescence incorrectly; at least as most people commonly understand it. The phrase planned obsolescence in North America tends to have a very negative connotation meaning a short functional life for a product before it ceases being functional with this obsolescence engineered in by the manufacturer.

True, but in the all-knowing (joke) Wikipedia:

Types of planned obsolescence:

Technical or functional obsolescence

The design of most consumer products includes an expected average lifetime permeating all stages of development. For instance, no auto-parts maker would run the extra cost of ensuring a part lasts for forty years if few cars spend more than five years on the road. Thus, it must be decided early in the design of a complex product how long it is designed to last so that each component can be made to those specifications.

Planned obsolescence is made more likely by having the cost of repairs being comparable to replacement costs, or by actually refusing to provide service or parts any longer. A product might even never have been serviceable. For instance Microsoft no longer provides customer support for Windows 95, creating a greater incentive to buy a more up-to-date version of Windows.

Creating new lines of products that do not interoperate with older products can also make an older model quickly obsolete, forcing replacement.

Style obsolescence

Marketing may be driven primarily by aesthetic design. Product categories where this is the case display a fashion cycle. By continually introducing new designs and retargeting or discontinuing others, a manufacturer can "ride the fashion cycle." Examples of such product categories include automobiles (style obsolescence), with a strict yearly schedule of new models, and the almost entirely style-driven clothing industry (riding the fashion cycle) and the mobile phone industries with constant minor feature 'enhancements' and restyling.
[edit]

Expiration or Expiry dates

Many products today have expiration or expiry dates long before they become inedible or unusable. Potato chips or soft drinks have dates that, if exceeded a little, will not be hazardous, but the date compels people to throw away and buy more, and retailers to take off shelves rather than save. Other products like milk and yogurt have expiration dates that err greatly on the side of caution, resulting in vast amounts of perfectly good food being thrown out each year, which then must then be replaced by consumers. Some products like razors or toothbrushes also have dates past which they can be used with no ill effects. The effect of an expiration date is to impel consumers to buy more, more often, and cause retailers to destroy serviceable products.
[edit]

Economics of planned obsolescence

Planned obsolescence tends to work best when a producer has at least an oligopoly. Before introducing a planned obsolescence the producer has to know that the consumer is at least somewhat likely to buy a replacement from them. In these cases of planned obsolescence there is an information gap between the producer, who knows how long the product was designed to last. When a market becomes more competitive, product lifespans tend to increase. When Japanese and European vehicles with longer lifespans entered the American market in the 1960s and 1970s, the American carmakers were forced to respond by building more durable products.

http://en.wikipedia.org/wiki/Planned_obsolescence

[EllwynX]

Originally Posted by Rick 2000

wpharry you is soo wrong. Me and 8 more of my close friends have new
GM cars (between 5-12 month) NONE of us have had a reason too visit
a dealer for anything other than oil change. GM quality is way up , I my
self owns 3 GM cars.

I'll have had my Aveo 1 year the end of April. No problems whatsoever...

[Ming]

Originally Posted by Cortazzo

Ford is a far worse criminal in this regard though, while GM leaves the same exact model on lots for 5-6 years, Ford actually spends money to refresh products that look exactly like they did before! Look at the focus, lincoln ls, town car, explorer, escape, mountaineer, etc etc etc.

So true. I remember seeing the "all new" Crown Victoria a few years back and had to squint to see the differences. The Expedition and Windstar are two others that while new, seemed strangely old. Then again, the Buick Lacrosse looks to me like a 1996 Riviera...

[stormwatcher]

Originally Posted by Ming

True, but in the all-knowing (joke) Wikipedia:

http://en.wikipedia.org/wiki/Planned_obsolescence

Wikipedia is why I never read books or go to the library any more.

Keep writing your articles here Ming, they are one of the best things on GMI.

[cincygoblue]

Originally Posted by stormwatcher

Very good article Ming, but I think you are using the term planned obsolescence incorrectly; at least as most people commonly understand it. The phrase planned obsolescence in North America tends to have a very negative connotation meaning a short functional life for a product before it ceases being functional with this obsolescence engineered in by the manufacturer.

I disagree. I think Ming is 100% right, and for the consumer, it is a negative. Think of your computer. Intel plans to have their chips be out of date within 2 years. That way if you buy a computer this year, 2 years from now, everyone will have a faster one and you will feel like poop and go buy a new one.

The same thing with styling, performance, etc. In fact, I think it's part of the reason GM rolls out their vehicles slowly. Get a G6 coupe last year? Well now that you've seen the G6 convertible, you might have to sell the coupe and get a new car. Like the CTS you bought 3 years ago? Well now you can get a CTS-V. Etc, etc, etc. Why bring all the models out at once, when you can't support production of all of them while ramping up? Unfortunately, GM doesn't do enough of this, adding features, redoing interiors, adding gotta-have styling touches. I'm worried about cars like the Cobalt, HHR, G6. Hope GM has a plan to touch them up soon.

Toyota may run into a problem with their planned-obsolecense of the Prius. They're talking too much. They're already talking that the nextgen Prius could get over 100mpg. Anyone considering one, might want to wait before buying this version, because Prius3.0 will be out soon. Besides, why spend a $5000 premium now to save $500 a year in gas, when you can spend a $6000 premium next year to save $800 a year in gas?

[69Firebird400]

Originally Posted by FireStorm2k

i think it's just that they had a LOT of money back then.

A lot of money, a lot of market share, much less complex engineering, and most importantly, WAY fewer models. Chevy had...the "Chevy"...either a 150, 210, or Bel Air, but they were all the same car, just with more chrome and features as you worked your way up the line. GM's lineup has grown almost exponentially since the 50s as the market has fragmented. Instead of just different trim levels of a single model, Chevy alone now has Aveo, Cobalt, HHR, Malibu, Impala, and Monte Carlo. And the Corvette, which they also had in 1957. That's a much more fragmented lineup than 60 years ago, and many more models to spread development costs over.