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Detroit share lags despite new models

2304 Views 33 Replies 17 Participants Last post by  yoblues, 
Ming
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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A
Originally posted by vanshmack+Jul 4 2004, 05:47 AM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (vanshmack @ Jul 4 2004, 05:47 AM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-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.
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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! [/b][/quote]
We agree, but I should have been more careful with the word boring. To me the Camry is boring, but somewhat attractive. The Malibu, on the other hand, is just boring. The drawings of the Malibu showed such promise, but the end result is a disappointment in the exterior styling to me. The interior does not inspire me either. What I think the Camry has going for it is its "quality" reputation, and its luxury like content. The cheap Camrys are cheap, but the upscale versions look like an affordable Lexus.

When I went to this year's St. Louis Auto Show, I got to sit in a Malibu and Camry. The solid grey interior on the Malibu just brought my whole day down. I could see that it was well put together, but the all grey, no matter how well put together, was so drab. I think it even had grey leather interior.

The Camrys I looked at differed. The base model Camry looked cheap and old. It had a grey interior, but wasn't all grey. The seats were cheap grey cloth and it seemed more like a car for rental company. Nothing to get excited about. The top model on the other hand was very nice - almost too nice for a family sedan. It had nice grey leather with wood trim and chrome accents. It even had an open sunroof that made the car seem more upscale and more open. The Malibu, I don't think, had that option. In any case, the Camry (and most Japanese cars) seem to have a more open ****pit than American cars.

That may sound boring to some, but I think there a lot more people are looking for a relaxing drive home than for a sports sedan. Maybe that explains the allure of the Camry. Our world is so fast, so demanding, that by the time we enter our car, we just want to turn the key and glide effortlessly home. Even though I have a Mustang Mach 1, I yearn for that relaxing, comfortable drive home sometimes where I do not need to one-up somebody.
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That is one thing that the Camry may have benefited from; it was engineered to be a luxury car as well as something that would suit a rental fleet. You can call the Camry boring but the Malibu really needs help and I am not saying that because I like the Toyota Camry or even the Accord. In fact GM should have had no problem making a better looking car than the Accord but they didn’t, and that’s what really angers me. There is no way I can see the Malibu taking on a Camry with the styling it has right now. It screams economy from every angle on the outside, especially the rear end and its not an economy car! I thought the Malibu was going to fight on the value front against those two. Not happening. There are plenty of cars that are better suited for the fight. The Grand Prix from Pontiac would be a way better choice for someone who is really looking for value. Impala? No? You want a car that’s a little smaller but still a Chevy, I guess the Malibu has a purpose but you would have to be out of your mind to pass up the G6 for a Malibu. Then consider the Malibu went into the ring not able to take on the V6 offering from Honda. A 240hp V6 Accord vs. a 200hp V6 Malibu? Is GM even in the same decade as the rest of us? Sure, the Accord V6 may be several thousand more but what happens in a few years when its not? What happens when the 4 from Honda becomes even more powerful than it already is? What happens when the competition moves ahead and you’re still looking at where they were? Let Cadillac and Pontiac save GM in the near term and write the Malibu off at this point until what is probably going to be called the "Malibu SS" is what you get for a standard Malibu V6 in the first place.
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Ming
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.
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Very well said. One way to fix this would be to merge more brands into single dealerships, and cut down individual brand models.

There should be no crossover between Buick, GMC, and Pontiac, which all band together generally around here. Buick doesn't really NEED its own version of the Envoy, for instance.

Buick-only dealerships should be phased out. The only stand alone dealerships now should be Chevy, HUMMER, and Saturn (which should be dumped if it doesn't improve). Pair Cadillac with Saab.

GM's "portfolio problems" could be drastically improved if it doesn't have upteen gagillion models in every brand that tries to cover every possible segment. If Saturn dealerships were forced to pair with HUMMER, for instance, we wouldn't need the eventual Saturn full size SUV's, and HUMMER could stay upmarket without offering the H 0.5, a rebadged Chevy Aveo with a HUMMER grlle. ;)

You can keep all of the brands, just cut the models and force them to play off of each other's strong points, with Chevy as the only brand that covers it all.

Toyota may have just added Scion, but I think they will wisely keep the brand tied to Toyota dealerships in the long run, and not start offering Scion minivans and full size SUVs. Toyota, with a heavy dose of marketing, is also offering cars it offers in its home market of Japan.

GM has plenty of product in Europe it could bring here, instead of recreating the wheel at Saturn, Chevy, etc. with their own versions of small cars.
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paul8488
American Honda 2004 Posts New May Sales Record
Acura Posts All-Time Record Results; Honda Division Sets New May Record

TORRANCE, Calif., June 2 -- American Honda posted ten new sales records including its best ever May with sales of 143,193 Honda and Acura vehicles, a 14.0 percent rise over the previous May record set last year. American Honda also recorded its best May sales for passenger cars, up 23.6 percent for the year to 93,887 units, topping the previous record of 84,203 set in May 1990.

American Honda passenger car sales for the year are up 4.6 percent to 354,939 versus last year, while total year-to-date sales of American Honda vehicles are up 2.0 percent over a year ago to 569,923 cars and light trucks. May records by Division include:

* Record May sales for Honda Division
* Record May sales of Honda Passenger Cars
* All-time record sales of Civic Hybrid (third consecutive record month)
* All-time record sales of Odyssey
* Record May sales of Accord and Civic
* All-time record sales for Acura Division
* All-time record sales of Acura TSX
* Record May sales of Acura TL

"With gas prices on the rise, consumers are looking for fuel efficient choices, and with the highest rated overall fuel economy rating in the industry, Honda and Acura products are more competitive than ever," said **** Colliver, executive vice president of American Honda.

Honda Division posted a new May record on the way to its second best-ever sales month of 124,646 units, up 13.6 percent over year-ago totals including record May sales of Civic, up 26.9 percent to 35,608; and Accord, up 21.6 percent to 43,589 for the month. The Odyssey minivan also recorded its best month ever with sales of 16,682 units, up 8.4 percent for the month. Civic Hybrid posted its third consecutive record month with sales of 3,183 units. Year-to-date Civic Hybrid sales of 12,206 are up 19.6 percent over last-year's results.


Full article


incredible! what new products is honda offering consumers? the civic has new headlights... otherwise nothing from honda has been updated in years. no one can argue that GM isn't at least trying... but it's amazing that honda can see sales increases on products several years old, while GM is stuck with fresher vehicles sitting on their lots. there are still a few more new GM's to come out soon, and they look promising, but instead of the one step forward, two steps back GM market share seems to take, companies like honda seem only ever to make headway.
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Rex Raider
Originally posted by paul8488@Jul 5 2004, 09:36 AM
incredible! what new products is honda offering consumers? the civic has new headlights... otherwise nothing from honda has been updated in years.
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The Accord was all-new in 2003 (last year)
The Element was all-new for 2003
The Pilot was all-new in 2003.

The Civic was updated in 2004.
The S2000 was updated in 2004.

A Hybrid Civic last year, and hybrid Accord this year.

The Oddysey will be all new in 2005.

Hardly sounds like no updates.
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GM (and the other two) began this nosedive car wise 30 years ago. First GM lost the people like me, former GM buyers (one generation) and then the (second generation) that has grown up with Japaneese cars. Most people buy things (cars) that they are familliar with and have proven their reliability. If your going to get people to change you must go one better than your rival. Gm has not gone one better it is just barely catching up. I have come to the conclusion it may never really catch up. WHY? For the same reason the U.S. Government barely works. It got so BIG it has become unmanageable. I said this before. Toyota has two main divisions (I don't think Scion will be around very long) Honda has two main divisions. They sell these two divisions worldwide. GM has 5 car and 2 truck divisions in the U.S. alone and then you get to it's overseas companies and partnerships. ADVANTAGE: Toyota/Honda They use their engineering and design talent on two lines. The management chain of command for two lines is far smaller than GM's. They build the same cars in their overseas factories. They are just leaner meaner companies. Face facts. the big two (the third one is now a German company) are in trouble, if the truck/suv market ever gets wobbily they are in serious trouble.
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paul8488
Originally posted by Rex Raider+Jul 5 2004, 02:11 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Rex Raider @ Jul 5 2004, 02:11 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-paul8488@Jul 5 2004, 09:36 AM
incredible! what new products is honda offering consumers? the civic has new headlights... otherwise nothing from honda has been updated in years.
Click to expand...
The Accord was all-new in 2003 (last year)
The Element was all-new for 2003
The Pilot was all-new in 2003.

The Civic was updated in 2004.
The S2000 was updated in 2004.

A Hybrid Civic last year, and hybrid Accord this year.

The Oddysey will be all new in 2005.

Hardly sounds like no updates. [/b][/quote]
accord came out in 2002, like all 2003's.
element, same deal.
pilot, same again. we've seen it for 2 years.

civic has new headlights this year. otherwise, it's the same since the 2001 MY.
the 2004 S2000 doesn't look significantly different than the 2000 model.

hybrid civic was available summer 2002.

if a new odyssey is coming next year, it's none too fresh right now.


perhaps honda's lineup isn't super old, but my point was that there's nothing brand new and exciting (like the 300C) pushing sales. how does the odyssey at the end of its life manage an all-time sales record, when the new ford and chrysler vans aren't matching the market increase (i'm talking sales rate increase, not volume)?

guess i'm digging kinda deep here, but i don't think honda's lineup appears to be solid enough for this kinda performance. and yet it's been a record month in many areas. i'm constantly baffled by honda, even more than toyota. toyota has the quality crown (even if it's no longer earned) and a larger portfolio of vehicles. honda just keeps trucking along unchecked.
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they are cheap, and kids think they can just slap an intake, new exhaust tips, and then pay more for a new paint job and they are suddenly pulling a "13.7 quart bro" cause they have a K&N. Hell, with a few tweaks I bet my LeSabre could pull of a 13.7 quarter. (and by tweaks I mean high flow exhaust, custom headers, some porting and polishing, maybe a turbo, god.. just give me a damn 87 Turbo Trans am or GN.)
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How does Honda and Toyota keep on going? Your guess is as good as mine. I think a larger portion of the American consumer base is fed up and tired with Detroit and want an alternative.

Honda and Toyota are both seeing growth from their minivans. GM and Ford haven't because they never took their offering as seriously as these 2 companies. The new Sienna came out late last year and has seen large increases over the previous Sienna. Honda has had what some people consider the best minivan on the market in the Odyssey. It has been on the market for a long time so it would seem old to most people. However, since the NEW Odyssey is COMING OUT THIS FALL, Honda has decided to offer incentives on the remaining 04 models. That could explain why Odyssey sales are up this month.

I use the minivan comparision because this just shows how far GM and Ford are out of touch with the marketplace. A few years ago, hardly anybody even thought about the Toyota Sienna. I think there was just as much buzz over the Chevy Venture as there was for the older Sienna. Toyota was not much of a player in the minivan market. However, playing second to Honda was not acceptable to Toyota, and it released the current Sienna. Some consider this minivan to be the best on the market right now. How did Toyota go from being an afterthat in the minivan market to one of the hottest sellers in this segment? Why couldn't GM and Ford release a much stronger minivan while Toyota sold a forgettable Sienna and Honda sold an old Odyssey? The opportunity was there for these two to leapfrog the competition, but they never put out the effort.

I think America is tired of waiting for Detroit to get its act together, so they go and buy a Honda, Toyota, or Nissan. If the experience is good, it becomes even harder to convince them to leave.

That is my guess.
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Originally posted by yoblues@Jul 5 2004, 02:53 PM
GM (and the other two) began this nosedive car wise 30 years ago. First GM lost the people like me, former GM buyers (one generation) and then the (second generation) that has grown up with Japaneese cars.  Most people buy things (cars) that they are familliar with and have proven their reliability.  If your going to get people to change you must  go one better than your rival. Gm has not gone one better it is just barely catching up. I have come to the conclusion it may never really catch up. WHY? For the same reason the U.S. Government barely works. It got so BIG it has become unmanageable. I said this before.  Toyota has two main divisions (I don't think Scion will be around very long) Honda has two main divisions. They sell these two divisions worldwide.  GM has 5 car and 2 truck divisions in the U.S. alone and then you get to it's overseas companies and partnerships.  ADVANTAGE: Toyota/Honda      They use their engineering and design talent on two lines. The management chain of command for two lines is far smaller than GM's. They build the same cars in their overseas factories. They are just leaner meaner companies.  Face facts. the big two (the third one is now a German company) are in trouble, if the truck/suv market ever gets wobbily they are in serious trouble.
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Yoblues,

I think you are right about everything you wrote, except I don't think Scion will be leaving anytime soon. Ending Scion would be a major PR blunder to the "invinceable" Toyota Corporation. Toyota is committed to Scion for the long run. Little by little, Toyota is gaining market share. Part of the plan is for Scion to hit a part of the market that Toyota cannot hit.

I do agree about the rest of your post. I don't have an answer, but I have a feeling the change would have to come from us Americans changing our mindset - "bigger is better". Toyota, Honda, and Nissan are riding a wave of momentum now and I don't see it breaking any time soon. Plus, these 3 are getting American workers -college graduates, ex-Detroit auto workers, etc... that are just completely fed up. They see Nissan, Toyota, and Honda as having fresh ideas and more flexibility. It is kind of like a fresh, new beginning. I think many people still view Detroit as old, slow moving, and not really in touch with society. It is a perception battle, one I'm not sure Detroit has dented too much.

the big two (the third one is now a German company) are in trouble, if the truck/suv market ever gets wobbily they are in serious trouble.
Click to expand...
This statement should be highlighted in every domestic website and "Buy American" supported website.
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In case some of you missed it, Buick is the second most dependable brand of car in the world right now, according to JD Power. That's why they're getting the next big cash infusion to help them out. Buick makes some very fine cars as it is, but the styling leaves a bit to be desired. Of course, it was the reliability and awesome engine that first interested me in the 2000 Buick Regal GS that I now own. The comfort and ride quality sold me on it. For those who give Buick a chance, most of them will come away with an impression of great quality. But Buick currently has the same image as Oldsmobile did a couple years ago - a brand of wanna-be luxury that is just cheap GM junk. Heck, most Americans don't even know that Olds is gone, but most of them wouldn't care anyway. Buick needs some fresh styling and a really good ad campaign, and perhaps a #1 ranking on JD Power's long-term dependability list, and Toyota will really start to worry. Of course, let's not forget that Toyota is #8 on the list, behind Buick, Cadillac, and Lincoln - all domestic brands. Fancy that. Maybe more consumers should read these reports.
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Hudson
The JD Power survey you're quoting is "...of vehicles sold in the US," so "in the world" is a bit of an overstatement.
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awalbert88,

That is the most frustrating thing about the J.D. Power quality scores. The brands you listed are all starting to get a good quality reputation after fighting for decades to catch the imports, but all of them, except Cadillac, are not building the kinds of vehicles people want. That is what is most frustrating. Now is the time to show the quality gains by introducing fresh, new vehicles that wow the automotive public. The high quality gains would just be icing on the cake.

I remember back in 1990 or 1991 that Automotive News had a big feature on the front page about Buick being the first domestic brand to show quality gains right along with the imports. It was great news of joy. Since then, Buick has gotten a great reputation for building cars that last long and are high on quality. However, Buick sales are decreasing because it is not building the kinds of cars people want. Cadillac is starting to look like a smart buy in terms of quality, engineering, and status. It is still missing little things that can put it over the top, but it is becoming a known quality brand, with fresh, new products. Buick and Lincoln need that as well to keep up the momentum because these quality gains are heaven for a PR department. High quality scores combined with "gotta have" products is a great combination.

Having said that, I would still buy a Honda or Acura before I'd buy a Buick or Lincoln (upcoming Zypher not withstanding). Why? I like the sportier philosophy and attention to detail that the other two brands lack. I hear Buick and Lincoln will be getting big improvements in the future, but right now I'd take an Acura TL because it still has great quality and it has the features I want to have.
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The thing is Buick is not and will never be GM's saviour. Chevy is the key here. Chevy is the division that takes on Toyota/Honda cars/trucks. Buick is for Lexus/Acura. If you get Chevy roaring (sales with big rebates is not roaring to me) you go a long way in insolving the problem. Pour the money into Chevy, when chevy can out Toyota, Toyota, the problems are over.
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