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Detroit share lags despite new models
July 3, 2004
JEFFREY MCCRACKEN
DETROIT FREE PRESS

New cars and trucks would abound. The economy would improve. And some foreign rivals would seriously struggle.

At the start of the year, Detroit automakers hoped this trio of trends would give them a real chance at increasing their collective share of the U.S. car and truck market. If it happened, it would be the first time since 1994.

Alas, after the first six months of 2004, Detroit's three automakers are unable to increase their share of the U.S. market. New products are coming out, but DaimlerChrysler's are the only ones creating a real buzz in the market. The forecasts for struggles by foreign rivals have been true, but mostly at Volkswagen and Mitsubishi, not bigger rival Toyota. The economy is recovering, but much more slowly than expected.

Detroit automakers' collective share of the market for new cars and trucks is down to 61.8 percent, compared with 63.4 percent for the first six months of 2003. These numbers include the foreign brands tied to the former Big Three, like Saab, Volvo and Mercedes-Benz.

DaimlerChrysler has done the best, holding steady at 14.7 percent of the U.S. market, exactly where it was for the first six months of 2003.

The Chrysler Group, the old Chrysler Corp. before its acquisition by Daimler-Benz, has been aided by a number of brand-new cars that have been popular with consumers, such as the Chrysler 300 and 300C. Chrysler also has remodeled its all-important SUV, the Dodge Durango.

General Motors Corp. and Ford Motor Co., however, are both down from a year ago.

"We, as a group, are trying to get this turned around, but it doesn't happen overnight. We are dealing with 30 years of history here," said George Pipas, Ford sales analysis manager. "The erosion of Big Three market share in cars goes back to the oil crisis of the early 1970s when the foreign automakers got a toehold into small cars. But, this could still be a turnaround year. Don't write it off yet."

General Motors, which many analysts thought had the best chance to improve share, is down to 27 percent this year, compared with 27.5 percent a year ago.

"Our sales have been a bit softer than expected. We were hoping for a bit more so far this year," said Paul Ballew, GM's executive director of industry and market analysis. "The car market is eroding faster than we thought. The whole midsized sedan market is declining much more rapidly than we expected."

In the first six months of 2004, Detroit automakers' sales slipped 0.5 percent while the rest of the industry was up 7 percent.

Back in January, amid the hoopla and optimism of the North American International Auto Show, many Detroit auto executives and auto analysts were bullish on the possibility that one or more of Detroit's automakers could increase share. All three would have a slew of new products like the Dodge Magnum, major redesigns of classics like the Ford Mustang or Chevrolet Corvette, or full years of recently redesigned products like the Ford F-150 and Chevy Malibu.

"Let me put it this way, if we don't gain market share this year, I will feel personally hurt," Bob Lutz, GM vice chairman, said at the show in an optimistic tone that was echoed in other quarters.

GM is awaiting its Chevy Cobalt, which replaces the Cavalier in the GM lineup. Also coming is the Pontiac G6, taking over for the Pontiac Grand Am.

The question is whether any of those new offerings will entice consumers. New products like the Malibu and Ford Freestar minivan have not hit anywhere near as well as those automakers had hoped.

"I think, for the Big Three, the second half will be a lot like the first half with no dramatic improvements," said Jessie Toprak, director of pricing and market analysis for Edmunds.com, a vehicle-pricing Web site.

Another problem: They are trying to get away from the profit-eating incentives they have used since 9/11 to lure customers back into dealerships.

Full Article Here

 

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GM tried to start the turnaround by investing billions in Caddy, This was a good move as Caddy is the flagship. It's seems to have succeeded. My understanding is that Buick is next for the cash infusion. This is a Lousy decision. Chevy, the Toyota/Honda competition, should have been next for the big buck infusion. You simply have to get Chevy competative for GM to really take off in the car market. If you can get Chevy to really take off, you will have plenty of money to turn everything else around. You can worry about Buick and Pontiac later. You can also dump Saturn and having two truck lines Chevy/GMC is really stupid.
 

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"GM tried to start the turnaround by investing billions in Caddy, This was a good move as Caddy is the flagship. It's seems to have succeeded. My understanding is that Buick is next for the cash infusion. This is a Lousy decision. Chevy, the Toyota/Honda competition, should have been next for the big buck infusion. You simply have to get Chevy competative for GM to really take off in the car market. If you can get Chevy to really take off, you will have plenty of money to turn everything else around. You can worry about Buick and Pontiac later. You can also dump Saturn and having two truck lines Chevy/GMC is really stupid. "

I agree. Preach on...
 

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Chevy is going to be able to hold its own for the time being. But buick is in a much more dire position, its kinda were Olds was...

pontiac is next after that, people just dont see pontiac as a good option for some reason.

I agree about droping saturn (or at least just make it the lone fleet seller) and the chevy/GMC thing yea, thats dumb (also dumb that GMC is not part of Pontiac... um... why not just merge them with Chevy seeing as thats who all their stuff is based off of..)
 

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Honestly, I'm not so sure why GM's sales are down. Sure, you can guess reasons why, but nothing clearly stands out, particularly when you consider what GM is doing and what its competitors are doing, though something can be said for fresh vehicles. It doesn't explain the story completely, though.

If you look at the divisions that have received cash for new products, they're sales are up this year. Cadillac is up 10.9% (ahead of the market), and Chevrolet was next to receive cash (with some vehicles yet to be introduced) and is up 3.5% (albeit slightly less than the market).

GMC, the 2nd largest division at GM by sales and the division that everyone seems to think should get the boot, is up higher than the market (i.e., it seems to have proven its raison d'etre); sales are up 7.8%. There are other divisions that should go before GMC, in my mind.

Pontiac, perhaps through fleet sales(?), has seen its sales surge 12.5% this H1.

Much of GM's share slide is a result of the neglected divisions. Buick, which will be receiving much needed product (though I doubt that what's coming will be sufficient), is down 3.4% YTD (in an up market). Hummer, which we know is a fad vehicle and contributes in a very minor way to GM's total massive sales, is down 24.4%. But it, too, is receiving new product. The defunct Oldsmobile, which we all know is obviously going to post poor sales, is down nearly 65% YTD - that was a loss of almost 60,000 units in H1 of 2004. Saab, which really ought to can the Saab loyalists - it's a fleetingly small number of consumers - saw sales dive 20.6%. It needs a broader range of vehicles, which is why I agree with vehicle concepts as the 9-2X and 9-7X (though I'm disappointed in what Saab has served up in reality). Then, there's the truly neglected division, Saturn, down 22.9%.

Quite honestly, though, managing GM's enormous product portfolio is truly a daunting task that I don't think anyone here could do better than the people in charge at GM, despite people's claimed clairvoyance. Any simpleton can be a Monday-morning quaterback.

Many people have asked GM to improve in substantial ways: quality, productivity, and the adoption of lean manufacturing and constant improvement methods, to name four. To my knowledge, they have made substantial strides in many areas. As one example, it's in the company of only four other manufacturers who beat the industry average in reliability in the last dependability survey. LGR and Detroit/Hamtramck continue to outperform the vaunted Marysville, Ohio and Georgetown, Kentucky plants in terms of producing high quality vehicles. Of course, GM has made foibles; no one is perfect. But should they be punished with a 15% sales dive in an up market. Come on!

When I compare GM to its competitors, I'm honestly perplexed by their success and GM's failure. Are Kia's substantially better than comparable GM products to merit a 31% improvement in Kia sales?! Really? You think so? I certainly don't Kia has nothing on anyone, including price, that should merit that kind of performance. Yet, that's what GM is up against.

Are Toyota's that much better designed for that company to continue gaining market share at the expense of Detroit? Really? You honestly think the Corolla and Camry are such sexy vehicles that they should sell two:eek:ne to GM's comparable vehicles, particularly when GM's comparable vehicles outrank Toyota's in a variety of ways. I don't see that as being the fault of GM, per se. I had to drive a Camry to figure out what all the hype is about this 450,000 unit/year vehicle. I must have missed something on my test drive.

Lexus has quality, but Cadillac does, too. It's right behind Lexus and ahead of other luxury makes in a variety of ways. Then why should Lexus sales be up nearly 25% to Caddy's 10%? I cannot explain that. As an example, the ES330 (a gussied up Camry with lower quality and comparable price to the CTS) sells in droves; how is that explanable? Where did GM supposedly go wrong there? I cannot put my finger on it. Have you driven the ES330; I think it's quite uninspiring, and it has nothing on anyone in terms of design. The commercial professing its sporty inclinations is an absolute joke, but America seems to be swallowing that load of crap.

And do you think the Tundra is vastly superior to the Silverado? I don't at all, honestly. Yet Tundra sales are up double digits whereas the Silverado lags the market after June's poor showing (yes, Silverado sales dwarf Tundra sales). But why the discrepancy in rate of change of sales? GM dealers are better overall at satisfying customers than many other manufacturers, especially Toyota, so that can't expalin it.

Honestly, I'm dumbfounded by GM's poor showing. They have done a lot in the past 5 years that in my mind should at least merit flat sales, not such a nosedive in them. Do they do some products poorly? Absolutely and without a doubt. But, GM also does a whole lot right, and it should at least be rewarded with industry average performance.
 

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Originally posted by tgagneguam@Jul 3 2004, 10:50 AM
Honestly, I'm not so sure why GM's sales are down. Sure, you can guess reasons why, but nothing clearly stands out, particularly when you consider what GM is doing and what its competitors are doing, though something can be said for fresh vehicles. It doesn't explain the story completely, though.

If you look at the divisions that have received cash for new products, they're sales are up this year. Cadillac is up 10.9% (ahead of the market), and Chevrolet was next to receive cash (with some vehicles yet to be introduced) and is up 3.5% (albeit slightly less than the market).

GMC, the 2nd largest division at GM by sales and the division that everyone seems to think should get the boot, is up higher than the market (i.e., it seems to have proven its raison d'etre); sales are up 7.8%. There are other divisions that should go before GMC, in my mind.

Pontiac, perhaps through fleet sales(?), has seen its sales surge 12.5% this H1.

Much of GM's share slide is a result of the neglected divisions. Buick, which will be receiving much needed product (though I doubt that what's coming will be sufficient), is down 3.4% YTD (in an up market). Hummer, which we know is a fad vehicle and contributes in a very minor way to GM's total massive sales, is down 24.4%. But it, too, is receiving new product. The defunct Oldsmobile, which we all know is obviously going to post poor sales, is down nearly 65% YTD - that was a loss of almost 60,000 units in H1 of 2004. Saab, which really ought to can the Saab loyalists - it's a fleetingly small number of consumers - saw sales dive 20.6%. It needs a broader range of vehicles, which is why I agree with vehicle concepts as the 9-2X and 9-7X (though I'm disappointed in what Saab has served up in reality). Then, there's the truly neglected division, Saturn, down 22.9%.

Quite honestly, though, managing GM's enormous product portfolio is truly a daunting task that I don't think anyone here could do better than the people in charge at GM, despite people's claimed clairvoyance. Any simpleton can be a Monday-morning quaterback.

Many people have asked GM to improve in substantial ways: quality, productivity, and the adoption of lean manufacturing and constant improvement methods, to name four. To my knowledge, they have made substantial strides in many areas. As one example, it's in the company of only four other manufacturers who beat the industry average in reliability in the last dependability survey. LGR and Detroit/Hamtramck continue to outperform the vaunted Marysville, Ohio and Georgetown, Kentucky plants in terms of producing high quality vehicles. Of course, GM has made foibles; no one is perfect. But should they be punished with a 15% sales dive in an up market. Come on!

When I compare GM to its competitors, I'm honestly perplexed by their success and GM's failure. Are Kia's substantially better than comparable GM products to merit a 31% improvement in Kia sales?! Really? You think so? I certainly don't Kia has nothing on anyone, including price, that should merit that kind of performance. Yet, that's what GM is up against.

Are Toyota's that much better designed for that company to continue gaining market share at the expense of Detroit? Really? You honestly think the Corolla and Camry are such sexy vehicles that they should sell two:eek:ne to GM's comparable vehicles, particularly when GM's comparable vehicles outrank Toyota's in a variety of ways. I don't see that as being the fault of GM, per se. I had to drive a Camry to figure out what all the hype is about this 450,000 unit/year vehicle. I must have missed something on my test drive.

Lexus has quality, but Cadillac does, too. It's right behind Lexus and ahead of other luxury makes in a variety of ways. Then why should Lexus sales be up nearly 25% to Caddy's 10%? I cannot explain that. As an example, the ES330 (a gussied up Camry with lower quality and comparable price to the CTS) sells in droves; how is that explanable? Where did GM supposedly go wrong there? I cannot put my finger on it. Have you driven the ES330; I think it's quite uninspiring, and it has nothing on anyone in terms of design. The commercial professing its sporty inclinations is an absolute joke, but America seems to be swallowing that load of crap.

And do you think the Tundra is vastly superior to the Silverado? I don't at all, honestly. Yet Tundra sales are up double digits whereas the Silverado lags the market after June's poor showing (yes, Silverado sales dwarf Tundra sales). But why the discrepancy in rate of change of sales? GM dealers are better overall at satisfying customers than many other manufacturers, especially Toyota, so that can't expalin it.

Honestly, I'm dumbfounded by GM's poor showing. They have done a lot in the past 5 years that in my mind should at least merit flat sales, not such a nosedive in them. Do they do some products poorly? Absolutely and without a doubt. But, GM also does a whole lot right, and it should at least be rewarded with industry average performance.
I wholeheartedly agree with everything you just said.

In answer to all your questions, it boils down to perception. Toyota and JD Power have been telling us all that they build the best cars. This has been going on for years. And for most of that time, it's been true. The buying public puts Toyota into that special box, and even though their quality is beginning to slip, the reputation is already secure. I seem to remember reading an article on this site about "perceived quality" versus actual quality...
 

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Originally posted by vanshmack+Jul 3 2004, 04:06 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (vanshmack @ Jul 3 2004, 04:06 PM)</td></tr><tr><td id='QUOTE'><!--QuoteBegin-tgagneguam@Jul 3 2004, 10:50 AM
Honestly, I'm not so sure why GM's sales are down.  Sure, you can guess reasons why, but nothing clearly stands out, particularly when you consider what GM is doing and what its competitors are doing, though something can be said for fresh vehicles.  It doesn't explain the story completely, though.

If you look at the divisions that have received cash for new products, they're sales are up this year.  Cadillac is up 10.9% (ahead of the market), and Chevrolet was next to receive cash (with some vehicles yet to be introduced) and is up 3.5% (albeit slightly less than the market). 

GMC, the 2nd largest division at GM by sales and the division that everyone seems to think should get the boot, is up higher than the market (i.e., it seems to have proven its raison d'etre); sales are up 7.8%.  There are other divisions that should go before GMC, in my mind. 

Pontiac, perhaps through fleet sales(?), has seen its sales surge 12.5% this H1.

Much of GM's share slide is a result of the neglected divisions.  Buick, which will be receiving much needed product (though I doubt that what's coming will be sufficient), is down 3.4% YTD (in an up market).  Hummer, which we know is a fad vehicle and contributes in a very minor way to GM's total massive sales, is down 24.4%. But it, too, is receiving new product.  The defunct Oldsmobile, which we all know is obviously going to post poor sales, is down nearly 65% YTD - that was a loss of almost 60,000 units in H1 of 2004.  Saab, which really ought to can the Saab loyalists - it's a fleetingly small number of consumers - saw sales dive 20.6%.  It needs a broader range of vehicles, which is why I agree with vehicle concepts as the 9-2X and 9-7X (though I'm disappointed in what Saab has served up in reality).  Then, there's the truly neglected division, Saturn, down 22.9%.

Quite honestly, though, managing GM's enormous product portfolio is truly a daunting task that I don't think anyone here could do better than the people in charge at GM, despite people's claimed clairvoyance.  Any simpleton can be a Monday-morning quaterback.

Many people have asked GM to improve in substantial ways: quality, productivity, and the adoption of lean manufacturing and constant improvement methods, to name four.  To my knowledge, they have made substantial strides in many areas.  As one example, it's in the company of only four other manufacturers who beat the industry average in reliability in the last dependability survey.  LGR and Detroit/Hamtramck continue to outperform the vaunted Marysville, Ohio and Georgetown, Kentucky plants in terms of producing high quality vehicles. Of course, GM has made foibles; no one is perfect.  But should they be punished with a 15% sales dive in an up market.  Come on!

When I compare GM to its competitors, I'm honestly perplexed by their success and GM's failure.  Are Kia's substantially better than comparable GM products to merit a 31% improvement in Kia sales?!  Really?  You think so?  I certainly don't Kia has nothing on anyone, including price, that should merit that kind of performance.  Yet, that's what GM is up against. 

Are Toyota's that much better designed for that company to continue gaining market share at the expense of Detroit?  Really?  You honestly think the Corolla and Camry are such sexy vehicles that they should sell two:eek:ne to GM's comparable vehicles, particularly when GM's comparable vehicles outrank Toyota's in a variety of ways.  I don't see that as being the fault of GM, per se.  I had to drive a Camry to figure out what all the hype is about this 450,000 unit/year vehicle.  I must have missed something on my test drive.

Lexus has quality, but Cadillac does, too.  It's right behind Lexus and ahead of other luxury makes in a variety of ways.  Then why should Lexus sales be up nearly 25% to Caddy's 10%?  I cannot explain that.  As an example, the ES330 (a gussied up Camry with lower quality and comparable price to the CTS) sells in droves; how is that explanable?  Where did GM supposedly go wrong there?  I cannot put my finger on it.  Have you driven the ES330; I think it's quite uninspiring, and it has nothing on anyone in terms of design.  The commercial professing its sporty inclinations is an absolute joke, but America seems to be swallowing that load of crap.

And do you think the Tundra is vastly superior to the Silverado?  I don't at all, honestly.  Yet Tundra sales are up double digits whereas the Silverado lags the market after June's poor showing (yes, Silverado sales dwarf Tundra sales).  But why the discrepancy in rate of change of sales?  GM dealers are better overall at satisfying customers than many other manufacturers, especially Toyota, so that can't expalin it.

Honestly, I'm dumbfounded by GM's poor showing.  They have done a lot in the past 5 years that in my mind should at least merit flat sales, not such a nosedive in them.  Do they do some products poorly?  Absolutely and without a doubt.  But, GM also does a whole lot right, and it should at least be rewarded with industry average performance.
I wholeheartedly agree with everything you just said.

In answer to all your questions, it boils down to perception. Toyota and JD Power have been telling us all that they build the best cars. This has been going on for years. And for most of that time, it's been true. The buying public puts Toyota into that special box, and even though their quality is beginning to slip, the reputation is already secure. I seem to remember reading an article on this site about "perceived quality" versus actual quality...[/b][/quote]
Have any of you guys driven a Toyota Tundra or Corolla? They're much quieter and use better interior materials than their compeition. Yes, GM's reliability has improved but they're still using cheap plastics and rattles seem to always pop up after 10K miles. The future doesn't look any better - look at the "New" Malibu - its interior is attrocious - Boob Lutz needs to go.

Next, look at resale value. After a 5 year period a the average Toyota holds on to much more of its value than a GM vehicle (with the exception being the Chevrolet Tahoe) (check your blue books). Why would anyone want to waste their money on a car that will lose 80% of its value over five years when they can have a car that will only lose 50%? Hell, even the discounts don't make up for it. GM needs to stop selling to fleets and scale back the employee discounts to prop up resale value.
 

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Originally posted by tgagneguam@Jul 3 2004, 03:50 PM
Honestly, I'm not so sure why GM's sales are down. Sure, you can guess reasons why, but nothing clearly stands out, particularly when you consider what GM is doing and what its competitors are doing, though something can be said for fresh vehicles. It doesn't explain the story completely, though.

If you look at the divisions that have received cash for new products, they're sales are up this year. Cadillac is up 10.9% (ahead of the market), and Chevrolet was next to receive cash (with some vehicles yet to be introduced) and is up 3.5% (albeit slightly less than the market).

GMC, the 2nd largest division at GM by sales and the division that everyone seems to think should get the boot, is up higher than the market (i.e., it seems to have proven its raison d'etre); sales are up 7.8%. There are other divisions that should go before GMC, in my mind.

Pontiac, perhaps through fleet sales(?), has seen its sales surge 12.5% this H1.

Much of GM's share slide is a result of the neglected divisions. Buick, which will be receiving much needed product (though I doubt that what's coming will be sufficient), is down 3.4% YTD (in an up market). Hummer, which we know is a fad vehicle and contributes in a very minor way to GM's total massive sales, is down 24.4%. But it, too, is receiving new product. The defunct Oldsmobile, which we all know is obviously going to post poor sales, is down nearly 65% YTD - that was a loss of almost 60,000 units in H1 of 2004. Saab, which really ought to can the Saab loyalists - it's a fleetingly small number of consumers - saw sales dive 20.6%. It needs a broader range of vehicles, which is why I agree with vehicle concepts as the 9-2X and 9-7X (though I'm disappointed in what Saab has served up in reality). Then, there's the truly neglected division, Saturn, down 22.9%.

Quite honestly, though, managing GM's enormous product portfolio is truly a daunting task that I don't think anyone here could do better than the people in charge at GM, despite people's claimed clairvoyance. Any simpleton can be a Monday-morning quaterback.

Many people have asked GM to improve in substantial ways: quality, productivity, and the adoption of lean manufacturing and constant improvement methods, to name four. To my knowledge, they have made substantial strides in many areas. As one example, it's in the company of only four other manufacturers who beat the industry average in reliability in the last dependability survey. LGR and Detroit/Hamtramck continue to outperform the vaunted Marysville, Ohio and Georgetown, Kentucky plants in terms of producing high quality vehicles. Of course, GM has made foibles; no one is perfect. But should they be punished with a 15% sales dive in an up market. Come on!

When I compare GM to its competitors, I'm honestly perplexed by their success and GM's failure. Are Kia's substantially better than comparable GM products to merit a 31% improvement in Kia sales?! Really? You think so? I certainly don't Kia has nothing on anyone, including price, that should merit that kind of performance. Yet, that's what GM is up against.

Are Toyota's that much better designed for that company to continue gaining market share at the expense of Detroit? Really? You honestly think the Corolla and Camry are such sexy vehicles that they should sell two:eek:ne to GM's comparable vehicles, particularly when GM's comparable vehicles outrank Toyota's in a variety of ways. I don't see that as being the fault of GM, per se. I had to drive a Camry to figure out what all the hype is about this 450,000 unit/year vehicle. I must have missed something on my test drive.

Lexus has quality, but Cadillac does, too. It's right behind Lexus and ahead of other luxury makes in a variety of ways. Then why should Lexus sales be up nearly 25% to Caddy's 10%? I cannot explain that. As an example, the ES330 (a gussied up Camry with lower quality and comparable price to the CTS) sells in droves; how is that explanable? Where did GM supposedly go wrong there? I cannot put my finger on it. Have you driven the ES330; I think it's quite uninspiring, and it has nothing on anyone in terms of design. The commercial professing its sporty inclinations is an absolute joke, but America seems to be swallowing that load of crap.

And do you think the Tundra is vastly superior to the Silverado? I don't at all, honestly. Yet Tundra sales are up double digits whereas the Silverado lags the market after June's poor showing (yes, Silverado sales dwarf Tundra sales). But why the discrepancy in rate of change of sales? GM dealers are better overall at satisfying customers than many other manufacturers, especially Toyota, so that can't expalin it.

Honestly, I'm dumbfounded by GM's poor showing. They have done a lot in the past 5 years that in my mind should at least merit flat sales, not such a nosedive in them. Do they do some products poorly? Absolutely and without a doubt. But, GM also does a whole lot right, and it should at least be rewarded with industry average performance.
Very well said, I could not agree more.
My brother has a 03 camry and my dad a 04 Malibu. No doubt in my mind I would choose the BU. The Camry does absolutely nothing for me. While the Bu is not perfect it is a very nice car. My brother and I just went on a two day 907 mile trip and averaged 34.6 mpg. That is impressive for a V6 if you ask me. And that was with the air running 75% of the time and stuck in wonderful Chicago traffic for a couple of hours.
So why is the Bu not selling as well as GM thought? Is the styling really that bad? You can lease one for pretty reasonable payments and there are plenty of incentives. I honestly do not think the Accord or Camry is much if any better. So, what gives? Maybe it truely is perception?
 

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Malibu would probably sell better if it were a little better looking. It's a very good car, but I would skip it for a G6 anyday.

G6 should be a bomb of a hit and the Cobalt should also. These will give GM some big car numbers which it needs bad. Hopefull it doesn't have a slow production start as they will need to fill demand.
 

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Originally posted by 4runner@Jul 3 2004, 06:01 PM
Have any of you guys driven a Toyota Tundra or Corolla? They're much quieter and use better interior materials than their compeition. Yes, GM's reliability has improved but they're still using cheap plastics and rattles seem to always pop up after 10K miles. The future doesn't look any better - look at the "New" Malibu - its interior is attrocious - Boob Lutz needs to go.

Next, look at resale value. After a 5 year period a the average Toyota holds on to much more of its value than a GM vehicle (with the exception being the Chevrolet Tahoe) (check your blue books). Why would anyone want to waste their money on a car that will lose 80% of its value over five years when they can have a car that will only lose 50%? Hell, even the discounts don't make up for it. GM needs to stop selling to fleets and scale back the employee discounts to prop up resale value.
That's it?! That's all you have to explain the domestics' poor showing?! Thrill me, then, with why Kia is doing so well. And why did Mitsubishi until recently?

And no, Peaches, the Malibu is not vastly inferior to a Corolla or Camry, which both need to learn from the Malibu in terms of initial quality and longterm reliability. Chevrolet can also teach Toyota about sales satisfaction, another objective measure in which Chevrolet creams Toyota. And if you think that the Corolla or Camry has anything on the Malibu in interior materials, you're simply not being honest with yourself. Let me guess: Toyota's designs are more appealing than Chevrolet's, right? Please...

I can go tit for tat with you on anything that Toyota does and anything that Chevrolet does. The point would be that Toyota is not vastly superior, which should mean that Toyota's performance should be equal (and not superlatively better) than Chevrolet's in sales.

Let's not go into all that Kia and Hyundai do quite poorly...
 

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I was afraid this was going to happen. America's last two car companies were so sure they would gain market share this year, that they could almost taste it. It really makes me question the people in charge. Do they think they will capture market share just because they said they would?

I think the long run of incentives and other "come buy our vehicle" gimmicks has run its course. I see GM's new marketing incentives as desperation. GM seems to be so focused on the deal of the month that it doesn't spend the time to work on its products. However, the problem is that GM needs these incentives to get it to the time when the hot products do come out. But, these incentives, I think, throw a negative perception on GM's vehicles. It cheapens them in the long run.

How Toyota is able to gain is beyond me, but it shows that Toyota is hitting the right targets and doing the things that are needed to increase sales month after month. It also doesn't hurt that Toyota's long term scores in J.D. Power surveys have been great year after year. Just think of how many English speaking papers carried those scores. It just enforces the thought in the mainstream that Toyota is still the best choice when buying a car. I really can't answer how Toyota is able to do it month after month, but just wait until the new Lexus and Toyota hybrid SUVs are out. GM does not have an answer. And then, look at the new Sienna minivan that is growing by leaps and bounds. GM is going to combat it with the CSVs (or whatever)?

As for Kia, I think its sales are growing due to its Sedona minivan and Sorrento SUV. The Sedona minivan is one of the cheapest minvans on the market. GM has no answer for it, and doesn't seem to care either. I also think Kia has profitted from the low entry level market. There are several people I know that don't have much money, but still want a new car. A Kia or Hyundai can still be had cheaper than most GM products. The Cavalier/Sunfire are not on the radar screen.

I also think many Americans no longer care or think about GM anymore. There are so many choices out there, that people don't want to put up with a mediocre product anymore. I feel GM is getting better, but the styling and interiors are still sticking points for me. Here is the world's largest car company, yet it sometimes offers vehicles that are behind. That is unacceptable. I still think GM is unconnected to the American public. Somehow, some way, GM does not have the attention of the American public like it did in the 50s and 60s when it could do no wrong. GM needs to find that magic. I get the impression that GM is happy to put out a 95% vehicle. In this day and age, GM has to put out 110% in every single product it does so people can look at it. It doesn't help when you have little Chrysler Group outworking GM at every corner. That doesn't help GM either.

I hope GM (and Ford) can get their acts together because what they are doing is not working. They are not winning over the American public. I think Lutz needs to shut his mouth and just build great cars and trucks at GM. He is beginning to sound too similiar to Iacocca and his "Buy America" tirade of the late 80s. Toyota doesn't talk - it listens and it is listening to the American people. Did GM listen to all you Camaro/Firebird fans out there? No! What about a new, much improved minivan? No! Lutz knows better, but I get this feeling he is just so casual about things. The same thing about Ford. These two need to be become agressive, listen to the American public, and start quietly building great cars instead of bragging about it and underdelivering. They need to take market share now, though great products, instead of watching the competition eat them up.

I don't mean to rip on GM, but I have this feeling somebody somewhere needs to light a fire under its butt.
 

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Originally posted by dindak@Jul 3 2004, 01:19 PM
Malibu would probably sell better if it were a little better looking. It's a very good car, but I would skip it for a G6 anyday.
Malibu and G6 serve completely different purposes. Malibu is the family sedan and G6 is meant to be sporty. Obviously the Malibu isn't going to have outrageous styling as it's meant to appear as neutral as possible to attract it's core buyers.
 

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Originally posted by 4runner+Jul 3 2004, 01:01 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (4runner @ Jul 3 2004, 01:01 PM)</td></tr><tr><td id='QUOTE'>
Originally posted by [email protected] 3 2004, 04:06 PM
<!--QuoteBegin-tgagneguam
@Jul 3 2004, 10:50 AM
Honestly, I'm not so sure why GM's sales are down.  Sure, you can guess reasons why, but nothing clearly stands out, particularly when you consider what GM is doing and what its competitors are doing, though something can be said for fresh vehicles.  It doesn't explain the story completely, though.

If you look at the divisions that have received cash for new products, they're sales are up this year.  Cadillac is up 10.9% (ahead of the market), and Chevrolet was next to receive cash (with some vehicles yet to be introduced) and is up 3.5% (albeit slightly less than the market). 

GMC, the 2nd largest division at GM by sales and the division that everyone seems to think should get the boot, is up higher than the market (i.e., it seems to have proven its raison d'etre); sales are up 7.8%.  There are other divisions that should go before GMC, in my mind. 

Pontiac, perhaps through fleet sales(?), has seen its sales surge 12.5% this H1.

Much of GM's share slide is a result of the neglected divisions.  Buick, which will be receiving much needed product (though I doubt that what's coming will be sufficient), is down 3.4% YTD (in an up market).  Hummer, which we know is a fad vehicle and contributes in a very minor way to GM's total massive sales, is down 24.4%. But it, too, is receiving new product.  The defunct Oldsmobile, which we all know is obviously going to post poor sales, is down nearly 65% YTD - that was a loss of almost 60,000 units in H1 of 2004.  Saab, which really ought to can the Saab loyalists - it's a fleetingly small number of consumers - saw sales dive 20.6%.  It needs a broader range of vehicles, which is why I agree with vehicle concepts as the 9-2X and 9-7X (though I'm disappointed in what Saab has served up in reality).  Then, there's the truly neglected division, Saturn, down 22.9%.

Quite honestly, though, managing GM's enormous product portfolio is truly a daunting task that I don't think anyone here could do better than the people in charge at GM, despite people's claimed clairvoyance.  Any simpleton can be a Monday-morning quaterback.

Many people have asked GM to improve in substantial ways: quality, productivity, and the adoption of lean manufacturing and constant improvement methods, to name four.  To my knowledge, they have made substantial strides in many areas.  As one example, it's in the company of only four other manufacturers who beat the industry average in reliability in the last dependability survey.  LGR and Detroit/Hamtramck continue to outperform the vaunted Marysville, Ohio and Georgetown, Kentucky plants in terms of producing high quality vehicles. Of course, GM has made foibles; no one is perfect.  But should they be punished with a 15% sales dive in an up market.  Come on!

When I compare GM to its competitors, I'm honestly perplexed by their success and GM's failure.  Are Kia's substantially better than comparable GM products to merit a 31% improvement in Kia sales?!  Really?  You think so?  I certainly don't Kia has nothing on anyone, including price, that should merit that kind of performance.  Yet, that's what GM is up against. 

Are Toyota's that much better designed for that company to continue gaining market share at the expense of Detroit?  Really?  You honestly think the Corolla and Camry are such sexy vehicles that they should sell two:eek:ne to GM's comparable vehicles, particularly when GM's comparable vehicles outrank Toyota's in a variety of ways.  I don't see that as being the fault of GM, per se.  I had to drive a Camry to figure out what all the hype is about this 450,000 unit/year vehicle.  I must have missed something on my test drive.

Lexus has quality, but Cadillac does, too.  It's right behind Lexus and ahead of other luxury makes in a variety of ways.  Then why should Lexus sales be up nearly 25% to Caddy's 10%?  I cannot explain that.  As an example, the ES330 (a gussied up Camry with lower quality and comparable price to the CTS) sells in droves; how is that explanable?  Where did GM supposedly go wrong there?  I cannot put my finger on it.  Have you driven the ES330; I think it's quite uninspiring, and it has nothing on anyone in terms of design.  The commercial professing its sporty inclinations is an absolute joke, but America seems to be swallowing that load of crap.

And do you think the Tundra is vastly superior to the Silverado?  I don't at all, honestly.  Yet Tundra sales are up double digits whereas the Silverado lags the market after June's poor showing (yes, Silverado sales dwarf Tundra sales).  But why the discrepancy in rate of change of sales?  GM dealers are better overall at satisfying customers than many other manufacturers, especially Toyota, so that can't expalin it.

Honestly, I'm dumbfounded by GM's poor showing.  They have done a lot in the past 5 years that in my mind should at least merit flat sales, not such a nosedive in them.  Do they do some products poorly?  Absolutely and without a doubt.  But, GM also does a whole lot right, and it should at least be rewarded with industry average performance.

I wholeheartedly agree with everything you just said.

In answer to all your questions, it boils down to perception. Toyota and JD Power have been telling us all that they build the best cars. This has been going on for years. And for most of that time, it's been true. The buying public puts Toyota into that special box, and even though their quality is beginning to slip, the reputation is already secure. I seem to remember reading an article on this site about "perceived quality" versus actual quality...
Have any of you guys driven a Toyota Tundra or Corolla? They're much quieter and use better interior materials than their compeition. Yes, GM's reliability has improved but they're still using cheap plastics and rattles seem to always pop up after 10K miles. The future doesn't look any better - look at the "New" Malibu - its interior is attrocious - Boob Lutz needs to go.

Next, look at resale value. After a 5 year period a the average Toyota holds on to much more of its value than a GM vehicle (with the exception being the Chevrolet Tahoe) (check your blue books). Why would anyone want to waste their money on a car that will lose 80% of its value over five years when they can have a car that will only lose 50%? Hell, even the discounts don't make up for it. GM needs to stop selling to fleets and scale back the employee discounts to prop up resale value. [/b][/quote]
Actually, I have driven a Tundra and recent Camry. Very solid, very uninspiring. Interior ftiment is good, but material quality seemed quite average. The Tundra had the "iForce V8" and performance was abysmal for truck. The Camry had the V6, and I can tell you a 3800 powered GP or Impala would probably smoke it. They just felt weak to me. Both cars were well screwed together, rode pleasantly and didn't make any obscene noises. They would serve the undemanding driver well.

Not trying to bash Toyota, just illustrating a point:

People who view automobiles as simple appliances buy Toyotas. People with even a remote passion for driving look elsewhere.

BTW- I love the resale value arguement these people like to make. When all else fails, point out that your boring Toyota is going to be worth a grand more after 5 years. Is that before or after you get raped on replacing things like timing belts and $120 headlight lenses? You wind up paying for that inflated resale value in other ways. The reality is, you paid more for the car in the first place, and it ought to be worth more than a less expensive car that was heavily incentive-laden when new. It's simple math.

The difference is, your Toyota will still be boring after 5 years.
 

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Another article apparently written by a desk jockey, not someone knowledgeable about the car business.

There have been FEW new domestic products rolled out so far (from the expected crop of new models). For the author to write anything about the ineffectiveness of the products is premature. It is also indicative of the stupid journalism that permeates much of the automotive press today.

I noticed that the author ignored new products from Japanese manufacturers like the Nissan Quest, the Armada, and the Titan. All bombs in the marketplace. Ignored are the collection of forgettable creatures from Scion. All bombs. Ignored is the hohum impact of the Tundra four door on the product line. Toyota Tundra sales are down significantly.

I'm a bit fed up with the yellow (pun intended) journalism of the automotive press that is so pro-Japanese. They ignore the obvious facts and don't bother to compare apples with apples and instead compare Sushi with peanuts.

Even the homely Cadillac division with its BMW ugly styling has had a modicum of success (albeit compared to its prior moribund product offering). Again ignored by the author.

Perhaps articles that offer such fact-less basis shouldn't be reprinted here.
 

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BTW- I love the resale value arguement these people like to make. When all else fails, point out that your boring Toyota is going to be worth a grand more after 5 years. Is that before or after you get raped on replacing things like timing belts and $120 headlight lenses? You wind up paying for that inflated resale value in other ways. The reality is, you paid more for the car in the first place, and it ought to be worth more than a less expensive car that was heavily incentive-laden when new. It's simple math.
I can't respond to the $120 headlight issues or timing belt replacements for Toyotas, but I have come to the realiziation that having a good resale value is a good thing to have. Do you have any idea what it is like trying to sell or trade a late 80s model Chrysler product? I'm sure a GM or Ford product will be a little better, but if I am going to buy a new car, I want to buy one that allows a good trade in when the time comes. Of course I have to like the style, performance, and quality of the car, but I also want to have good leverage when I do get to change. I'm out of Chrysler products, and have given Ford a chance with the Mustang. I will see what kind of trade in value we get with a GM vehicle when the time comes for my brother to trade in his 2001 Grand Perix coupe.

The difference is, your Toyota will still be boring after 5 years.
That is your opinion. Many people still buy Toyota and don't really care how boring it is to people. They like it. Not everybody cares about having a sports sedan or muscle car.
 

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Originally posted by AJR@Jul 3 2004, 11:20 PM
I was afraid this was going to happen. America's last two car companies were so sure they would gain market share this year, that they could almost taste it. It really makes me question the people in charge. Do they think they will capture market share just because they said they would?

I think the long run of incentives and other "come buy our vehicle" gimmicks has run its course. I see GM's new marketing incentives as desperation. GM seems to be so focused on the deal of the month that it doesn't spend the time to work on its products. However, the problem is that GM needs these incentives to get it to the time when the hot products do come out. But, these incentives, I think, throw a negative perception on GM's vehicles. It cheapens them in the long run...
As usual, AJR, your points are well taken.

I've wrestled with many of the issues that you raise. But I cannot help but think that each issue is immensely complex, and people's specious arguments for and against the things that GM does is irritating - I'm not referring to your thoughtful comments, incidentally.

Take the rebates issue. As we all know, GM screwed customers royally in the 80's and 90's, and they have paid enormously for it. Now, they appear to have seen the light (to some degree) and have made great strides to ameliorate their past wrongdoings. However, GM is in a precarious predicament: they need a carrot to lure the millions of people who have soured to the thoughts of buying a vehicle from GM into GM showrooms. How do you go about doing that? How do you consistently get millions of people to even walk in your showroom. You cannot wait until perception matches reality, and you cannot wait until Zeta arrives in 2007. There are decabillions in invested capital and decathousands of workers who by their contract are paid whether or not vehicles are built and sold. That's a significant financial liability. Not to mention the centithousands of shareholders to whom GM's executives must answer. They control a majority of the voting stock, and they want answers today. You need to make a return on your investment now, not in 3 years. Now.

Contrast that to the price you pay for offering generous rebates: a hindered recovery in perceived quality and desirability (as you illustrated) and diminutive profits. What do you do? There is no clear-cut decision.

I don't envy the positions in which John Devine, Gary Cowger, Bob Lutz, Rick Wagoner and their team find themselves (though their compensations certainly must make it more palatable!).

It's funny, when I buy many other consumer products, I don't think I give a second thought to where it's built or who makes it. As an example, I needed a replacement PDA for work. After several weeks of contemplation and research, I purchased one. Oddly, and quite sadly, only after I got it home and opened the package to charge it did I discover that it was made in China. How disappointing... But I love my PDA. Did I make a bad choice? I'm not so sure.

I imagine many Americans don't care from whom they purchase their car, much in the same way that I don't care about the brand of my PDA. Maybe there's a website that would roast me for purchasing my PDA... But for some reason, I have a stronger allegiance to car brands than I do to other consumer products.

I suppose that's why the world is seen through gray lenses as opposed to black and white ones.
 

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I noticed that the author ignored new products from Japanese manufacturers like the Nissan Quest, the Armada, and the Titan. All bombs in the marketplace. Ignored are the collection of forgettable creatures from Scion. All bombs.
How do you know these vehicles are bombs? The thing to remember is that Nissan and Toyota had sales increases not only in June, but over the last 10-12 consecutive months even with these vehicles falling behind projections. Just think where these companies would be if these products were red hot!

I can't call Scion a bomb. It was just launched to most of the United States in June. Reports are that Scion's success in California even surprised Toyota. It was better than people thought it would be. Personally, I can't stand the Scion Xb and can barely stomach the Xa. However, the Scion tC has a chance of making Scion a legit car divison to the mainstream youths. The Japanese usually don't expect a burst of sales success right off the bat. As long as it hits sales goals, then they are happy. They look for growing long term sales momentum. Toyota did the same thing with Lexus when people wrote it off before it was launched. Now, those same people know better than to right off any Toyota idea - whether it is Scion or something else. Toyota has a way of getting the job done when it has to.

The Nissan Titan is the one to watch. I don't think much of the Quest or Armada, but I think the Titan will spell trouble for Detroit several years down the road. Its impact may not be sales, but rather what it forces Toyota to do with its next Tundra. Toyota will learn form Nissan's mistakes and make an ever better truck. It may not sell as much as the Dodge Ram, but continuous improvement and gradual sales success are what these companies are looking for. They will get at it piece by piece.

And I just want to say that I am not some Toyota or Nissan loyalist on this site. I used to be very pro-domestic in the late 80s and througout the 90s. As I see Toyota, Honda, and Nissan continue to grow month after month, year after year, I asked myself why this keeps happening. My thought is that the Japanese outsmart are Detroit companies. By the time it takes Detroit to catch the Japanese in quality, the Japanese will have a big start on hybrid technology, and other future technologies. The Japanese usually do not like to put out a half hearted effort, unlike GM and Ford's minivans. They are very humble and not very outspoken like Detroit leaders. They let their results talk for them. That is something I think Lutz and the other GM officials need to learn.

I would like to see Detroit come back, but my desire is just about dead. Waiting for Detroit to get is act together for at least 15 years does get tiring.
 

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tgagneguam,

I can see you have been wrestling with these issues as well. These issues are very complex as you said. I have tried to understand why Detroit continues to lose ground. Maybe I've become more pessimistic ever since Daimler came in and ate up Chrysler. That moment demonstrated to me that Detroit is not the strong auto industry people want to believe it is. If our industry was so strong, why would we welcome a purchase of one of our glorious Big 3 companies? It is almost like people welcomed it and just threw their hands up in the air and said "do whatever you can to save us. We are at the end of our rope." I get this feeling that Detroit is at the point of just basic survival. That is why Oldsmobile and Plymouth are gone (although it should have been Saturn that left). I view the American auto industry in a downward spiral, and I don't know what will stop it. The imports have had such a big lead for so long, and have become a staple of our culture that they have become "family".

We were in business when the imports were starting to show some gains in the 80s. At the time, I wondered like you guys why this is happening because I did not think the Japanese had anything to talk about. They were the enemy and most people at that time were very loyal to American brands. When Toyota launched Lexus in 1989, I think things changed. They were the ones to take on the Germans when Detroit kept pumping out cars like the Chrysler Imperial, Cadillac Allante, and Lincoln Continental. These cars were suppose to be the best America had, and yet a little Japanese company known for making fuel efficient cars came right out and smacked the living daylights out of the Europeans. How were they able to do it, when we could not? I think it has to do with the mindset of the Japanese that building half-hearted efforts is embarrassing and disrespectful to the customers and employees. They had to prove they were worthy to the American people. America saw this effort and quickly realized that Toyota was a legitamate world car company. The effort was there from day 1 unlike Detroit's "we'll improve" mindset that we hear decade after decade.

This leads us to the incentive deals. Yes, GM is in a catch 22. It is building good vehicles, but it has to get people into the showrooms. However, is an incentive needed? Why couldn't GM wow the public with surprisingly beautiful cars and trucks? Chrysler went from the K-car king in the 80s into the hottest car company in the 90s with some hot (even outrageous) designed cars and trucks. Chrysler took a chance with styling and overwhelmed the world. The quality was terrible, but for a while Chrysler set the world on its head. That is the kind of stuff people keep asking from GM. When I visit import websites, there usually is a post about GM increasing its incentives. Naturally, GM is the joke of the forum because they see that GM has to pretty much hand out cars to people. The world's largest car company can do better than that. Get more cars out there that are truly inspired, and incentives may not be needed. Ford is trying it so we'll see if it works. Good cars that people want is what GM should be aiming for. However, the incentives are what GM needs to get through the tough times.

I see what you saying, but I still believe GM has to be smarter, more passionate, and work harder to keep market share. I'm not quite convinced yet.
 

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Originally posted by AJR@Jul 3 2004, 09:58 PM

That is your opinion. Many people still buy Toyota and don't really care how boring it is to people. They like it. Not everybody cares about having a sports sedan or muscle car.
It looks like we agree! :D

Boring does not enter into the equation for the typical Toyota buyer. They don't view cars as boring or exciting...only as transportation to get from point A to point B in relative comfort.

You are absolutely right, AJR, not everybody wants a sport sedan or a muscle car. Those are the people who buy Toyotas!
 
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