According to perceived wisdom, GM's overseas ops will keep the corporate mothership afloat. Some 64 percent of first quarter sales came from outside our borders, as well as ALL of GM’s profits. The General claims that foreign markets will account for 75 percent of its profit by decade’s end. So why not just shut down the NA operations and firewall the rest as “Global Motors?” A closer look at GM’s three international units tells the tale.
GME (Europe) covers the EU15 countries, Eastern Europe and Russia. There might as well be a reverse iron (lead?) curtain when it comes to GM’s sales growth and market share in Europe; it’s all happening on the eastern side.
GM’s woes in Western Europe closely mirror its death-rattle in the US. In fact, Opel/Vauxhall has pulled off a perfect imitation of GM’s US market share free-fall: a 30 percent share drop from 1995 to 2007. Opel’s market share has plummeted 55 by percent in its German home base. The Astra, the perennial number two behind VW’s Golf, now struggles for fourth or fifth place.
GME reported a loss of $514m in 2007, despite “strong demand for GM [Chevy-badged Daewoos] vehicles in Ukraine, Greece and Russia, where sales doubled”. But GM’s recent losing bid (to Renault) for Russian automaker Autovaz puts a crimp on future growth. And Toyota has just opened a modern plant in St. Petersburg.
But GM is throwing €9b at Opel, hoping (once again) that new models will turn things around. Opel’s brand image has morphed from boringly reliable to reliably boring, It’s caught in the pincers of the “premium” brands above it and discount brands below.
Thanks to Latin America’s bubbly economy, GM’s bright spot (for the moment) is GMLAAM (Latin America, Africa and Middle East). But dark clouds are already on the horizon (Argentina’s inflation is up to 25 percent again).
Brazil is GM’s third largest market. Because of numerous constrictions on the market, it has all the symptoms of a seller’s market bubble. Chevrolet’s Vectra (Cobalt) goes for $48k. No wonder GMLAAM booked a $1.3 billion profit in 2007.
But the Latin fiesta won’t last (it never does). Growth is slowing, and the competition is moving in. Toyota sees a 50 percent rise in sales. Hyundai is building a plant. And two Chinese firms are setting up shop in low-cost Uruguay to export to Brazil and Argentina.
That brings us to GMAP (Australia-Pacific). GM’s Australian Death Watch has been well documented here. But then there’s China, and as we all know, when it comes to car sales growth the East Glows. Or not.
GM has minted serious coin on their Buicks; $65k for each Park Avenue sedan. But GM’s China-fest is petering out. GM’s current growth is stalled at 7.4 percent. Meanwhile, the competition racks up big gains: Toyota: 62 percent, VW: 33 percent, Hyundai: 64 percent. Chinese drivers are shunning the aging Buick Excelle (Daewoo) in favor of Toyota’s Camry. But GM has a plan! Rushing our unloved (and now unbuilt) Enclaves and Escalades to China.
China’s most explosive period of growth is over, forever. The stock market is down 40 percent, and the real estate bubble has popped. As the car market turns into a buyer’s market, Chinese consumers will have greater choice in cost, quality, economy and reliability. And this is where GM faces a huge downside, not only in China, but in every other gold-rush market around the globe.
GM’s developing world cars are almost exclusively from Daewoo. Aveo’s US EPA numbers are 26 percent worse than the Yaris, and in China, it’s down 47 percent against a Lifan or BYD. Auto analyst, Jia Xinguang, says that “the Toyota Vios (Aygo) and Yaris will soon snap up a large share and dominate the small car niche”. Sounds familiar, once again.
In the hot global CUV market, the Chevrolet Captiva/Saturn Vue from Daewoo is uncompetitive. It weighs 4325lbs and has an EPA rating of 16/22, compared to 3500lbs for a Honda CRV with 20/26 EPA rating.
GM’s losses in Australia and the increasingly competitive market in China are showing up in the earnings statements. Whereas GMAP booked a $1.2b profit in 2006, in 2007 that shrank to $744m.
GM’s global expansion and profits were the result of two decisions made decades ago: to hang on to its roller-coaster Brazil operations, and to be an early pioneer in China. When these two are/were on the upswing, GM enjoyed oversized profits due to an imbalance in supply and demand. But as these and other hot-spot markets mature, GM will face the same final exam that it does at home: are its sub-compact (Aveo) and compact (Cobalt, Astra, etc.) products truly competitive with the best in the world?
GM may not have jumped the overseas shark yet, but it’s on the ramp.
My wife’s aunt works for a GM factory outside of Sao Paulo. She makes some nice $$$. She has a gorgeous house in a great neighboorhood, and a farm in the country as well. Her husband works for “Volks” (as it’s called in Brazil) & makes some nice coin as well.
With the weakness of the dollar, hopefully cars over there will get cheaper. A small CUV over there is $40+G’s.
“GM’s losses in Australia and the increasingly competitive market in China are showing up in the earnings statements. Whereas GMAP booked a $1.2b profit in 2006, in 2007 that shrank to $744b.”
I think that last value should be $744m” because the company would be in great shape if their profits wents from $1.2b to $744b!
Jeff in Canada:
I think that last value should be $744m” because the company would be in great shape if their profits wents from $1.2b to $744b!
Right you are. My bad. text amended.
Paul Niedemeyer: But GM is throwing €9b at Opel, hoping (once again) that new models will turn things around. Opel’s brand image has morphed from boringly reliable to reliably boring.
My relatives are German, and my cousin works for Opel…one thing that HAS improved at Opel is reliability. The company had serious quality problems in the 1990s, but the cars are getting much better. They do, however, still seem to be boring.
While at a conference today discussing globalisation I received two press releases from Toyota to my phone.
One stated that Toyota had now sold just over 100.000 Prius Hybrids in Europe.
The other that they had now sold over 1 million of the beasts worldwide. And we began discussing this, relative to GM. Why didn’t GM get behind the move to smaller less gas hungry cars sooner?
One major culprit is the short term perspective financial investments market, which is demanding results NOW! The Prius and the Hybrid Synergy Drive (which is really what’s exceptional about the car) came about because Toyota allowed itself a long view perspective on automotion. GMAC, starving suppliers, building vehicles on ancient platforms and going for the easy profit proposition landcruiser today — all loaded up with insane incentives – came about because Wall Street is blind to long term.
Ironically, and as reported in Newsweek recently, Exxon was punished by the market after delivering its strongest quarter ever. Why? It wasn’t as strong as expected.
You try running a car behemoth such as GM against such irrational expectations. Things won’t improve for GM, or any other major carmaker, as long as they are forced to obey the whims of irrational investing. How to change that? It will be forced upon them by market realities …
Are we going to have this death watch for Ford too? I see many similarities between the General and Fords markets.
“My relatives are German, and my cousin works for Opel…one thing that HAS improved at Opel is reliability. The company had serious quality problems in the 1990s, but the cars are getting much better. They do, however, still seem to be boring.”
Opel/Vauxhall has ALWAYS had “serious quality problems”, compared to the european competition. In the same way the rest of GM has, everywhere else. It’s not until the current Astra and Vectra that quality is on par. GM Europe gained some heavy sales in the 80’s, due to the demise of the english auto industry, they have been living on those sales for a long time. Volkswagen upped the stakes in the mid 90’s, and now it’s time for both GM and Ford to catch up, or lose sales. Ford Europe has done well so far, with the Focus, Mondeo, S-Max and so on. The problem with Opel is not that they build bad cars, but that their cachet is boring on the borderline of being irrelevant…
BostonTeaParty, Ford’s had its own Death Watch for a while; TTAC is up to installment #44 on that.
In fact, #44 is about Kirk Kerkorian betting, big, that Ford will disappoint those waiting for its demise.
There are things I like about Ford’s prospects, myself.
Stein X Leikanger: GMAC, starving suppliers, building ancient vehicles and going for the easy profit proposition today — all loaded up with insane incentives – came about because Wall Street is blind to long term.
Blaming Wall Street is too easy. If that were the case, why is GM’s stock price in the toilet? That is the ultimate verdict from Wall Street on the company and how it is being run. Obviously, Wall Street doesn’t like what it sees any better than we do.
The problem is that GM’s bean-counter oriented management THINKS it needs to please Wall Street, because that is what it really understands. It understands accounting and cutting costs, and not much else. The idea of having a long-term vision of the future of the car, or even of assuming a leadership position within the industry, is alien to them. It is beyond their comprehension (despite what the press releases say).
This problem originates in Detroit, not Wall Street.
GM had to bring in Bob Lutz to show it how to make remotely desirable cars again, for crying out loud. Mr. Lutz has (fairly) taken his share of lumps on this site for speaking out of turn on various subjects (global warming, whether GM’s brands have strong identities in the marketplace, etc.), but he HAS improved GM’s vehicle development processes.
The mere fact that GM had to bring in someone to revamp its vehicle development processes – or, basically show a car company how to build desirable cars – speaks volumes.
In 1958, when Frederick Donner took over the corporation, he stated that the company needed to pay attention to the price of its stock. This greatly disturbed the late, great, Bunkie Knudsen, who felt that GM should concentrate on building the best cars possible, and if it did so, the stock price would take care of itself.
Today, of course, we know that Bunkie was right. That is the lesson that GM management needs to relearn…but, at this point, it may be too late.
BostonTeaParty: Are we going to have this death watch for Ford too? I see many similarities between the General and Fords markets.
Yes. Ford’s beautiful Mondeo is selling at a slower rate in Europe than the old Mondeo it replaced. Other problems abound. Stay tuned.
@geeber
Yes, the truth is nuanced – but when your personal pay-off is in the form of stock-related options and bonuses, then the desire to let the financial market massage your decision making is hard to resist.
Paul: Didn’t Ford try to move the new Mondeo upmarket by making it more expensive?
Stein: Very true, but the problem still lies in Detroit, not Wall Street. If executives are focused on the stock price because it constitutes a large part of their compensation package, then the package needs to be changed or adjusted in some way. If the GM Board doesn’t feel the need to change this, then they are part of the problem…which has been pointed out numerous times on this site.
In the hot global CUV market, the Chevrolet Captiva/Saturn Vue from Daewoo is uncompetitive. It weighs 4325lbs and has an EPA rating of 16/22, compared to 3500lbs for a Honda CRV with 20/26 EPA rating.
I like you guys, but give me a break. Apples to Apples mean anything to you?? The FWD VUE 4-cylinder is rated at 19/26 (22 combined). The FWD CRV is rated 20/27 (23 combined). I’d say, given the weight disadvantage of the Saturn, it’s the CRV that looks like a fuel-hog. That much less poundage and only ONE MPG better? Sad.
You lose credibility when you compare the incomparable.
Of course, in the same vein as comparing the V6 VUE to the 4-cylinder-only CRV, you could compare the Hybrid VUE to the CRV: 25/32 (28 combined) for the Saturn vs. 20/27 (23 combined) for the Honda. See, two can play at that game.
In Europe, another thing is spoken about less often is the profit margin by which you can buy a Vauxhall. The UK is GM’s largest market in Europe (beating Germany), and yet you can buy (on average) a Vauxhall Astra with a 27% discount. This can amount to nearly £5K off the price. That’s a lot of money which GM are losing. I always hear about market share gains (or losses), but rarely does one hear about the profits made. Except last year, where GM Europe made a £126 million loss.
There is a clear overcapacity in the European network, with plants in Spain, the UK, Poland, Hungary, Belgium, Sweden and 4 in Germany (Russelheim, Bochum, Eisnach and Kaiserslautern). When GM announced the new generation Astra would be made in Poland, the UK, Germany and Hungary (or it might have been Sweden?) this provided GM with a perfect opportunity to close the Belgium site down. But it caved in to strike demands and gave them 2 new models. 2 models which another plant could have easily absorbed. Now GM have recently announced that 5 plants in Europe have been assured until 2016 when it really should be looking at cutting a plant or two. The GM Europe network really needs attention.
GM shouldn’t, also, get too comfortable with Latin America. The French manufacturers are making huge inroads there (Renault will make a serious push there) and Toyota has a huge following there. Not to mention that Russia is still anybody’s game and China is no longer GM’s playground with VW making a huge push there and many other manufacturers settling there.
India could be an untapped market, but they’ll have to consider their pricing as the majority of people can only afford a cheap car (Tata Nano anyone?), which is why Toyota is stalling there, but Suzuki are making great progress.
In short, GM’s global operations have a few birght spots, but others are muscling in fast. GM need to get in gear, not just in North America….
Buick61: I like you guys, but give me a break. Apples to Apples mean anything to you??
The reason I compared the Vue V6 with the CRV is because due to its porkiness, the 4cyl Vue is one to two seconds slower in the 0-60, depending on whose numbers you use. Still not exactly apples-to-apples, but close enough.
Dear Mr. Niedermeyer, I beg to differ. The Chevrolet Vectra sold in Brazil is VERY different than the US Cobalt. In fact the Cobalt is not sold in South America as you can see in http://www.chevrolet.com.br, http://www.chevrolet.com.ve and http://www.chevrolet.com.co. The current Vectra is as far as I know, a rebodied Astra.
South America is not only Brazil, it’s also Argentina, Venezuela and Colombia in selling volumes, just to name the “big” ones. Certainly, Brazil is the only one with proper mass production.
Here in Venezuela, GM has been the market leader for more than 25 straight years. It has more than 30% market share, and last year there were 500K vehicles sold here. The current ranking is GM, Ford and Toyota in the first 3 spots, with Toyota sometimes during the year going up to place #2.
Also, GM has this country’s biggest assembly plant/installed capacity, which gives them good access to the important import licenses.
I think part of the success of GM here has to do with the fact that they offer a good price/value relation in their products. Yes, they’re usually the least expensive option. But, for example, the Optra (US Suzuki Forenza, EU Chevrolet Nubira) has a sunroof, 1.8 lts engine, leather seat, digital A/C system, all wheel discs and is priced very competitively against a similarly equipped Corolla (which is not offered with sunroof here). As a matter of fact, it dethroned the Corolla, along with the Astra from the 1st position in its segment some years ago. Something similar happens with the Aveo and Spark, in this case, their main competition is Ford’s Fiesta.
I personally don’t like the idea of buying a Daewoo at Chevy prices. And an Optra is about $35K-40K, but a Corolla is between $40K-45K, so big profits in “emerging countries” (BS politically correct word for Third World) are not only for GM but for everyone. Chinese cars are NOT cheap here as everybody would expect.
The chinese are also entering here, but mostly is imports, and last year the government changed the policy to put, beginning this year, a big brake to imports (from ALL sellers).
Here as I guess in most other markets, Toyota is also the “quality” “prestige” brand. No surprise, since it took them at least 10 years of brainwashing and quality Corollas/Land Cruisers to get there.
GM is growing in emerging markets as you pointed out. And yes, I guess too, they’re going to eventually go through their current US situation.
But if their smart enough, they should avoid it using their global growth in revenues and profits, their global R&D platform to produce the cars that will eventually take them back to the top (if such thing is possible).
Stingray: Dear Mr. Niedermeyer, I beg to differ. The Chevrolet Vectra sold in Brazil is VERY different than the US Cobalt.
Dear Mr. Stingray, I beg to differ. I didn’t say it WAS the Cobalt, but in reality, they’re VERY similar, as are all GM Delta platform cars. The Brazilian Vectra shares nothing with the European Vectra; it’s essentially an Astra with a trunk grafted on. Which is essentially what the Cobalt is. Look at pictures of both of them; they’re VERY similar, minus a few surface creases.
http://stadium.weblogsinc.com/autoblog/hirezpics/astra_sedan_06.jpg
As to the rest of your comments, they generally confirm what I said: GM is riding the profit wave of a sellers market. One of two things will happen: either Latin America’s economy deteriorates, and the local producers are hurt, or the economy stays strong, and competition moves in, which will bring prices down eventually.
geeber: Paul: Didn’t Ford try to move the new Mondeo upmarket by making it more expensive?
Slightly; in that most new models usually have a bit of a bump, but not a dramatic one.
Gee, guys, you sound so pessimistic about GM. If the company didn’t have surplus cash, solid profits and a bright future, how could they do this:
“DETROIT – General Motors Corp. (NYSE: GM) today announced a second-quarter dividend of $0.25 per share on GM common stock. The dividend is payable June 10, 2008, to holders of record as of May 16, 2008. The dividend is unchanged from the previous quarter.”
GM wouldn’t cannibalize itself just to continue paying dividends. Or would it?
The reason I compared the Vue V6 with the CRV is because due to its porkiness, the 4cyl Vue is one to two seconds slower in the 0-60, depending on whose numbers you use. Still not exactly apples-to-apples, but close enough.
And, so? The V6 VUE is 1-2 seconds faster to 60 than the CR-V (Depending on which V6, check Car & Driver for verification). A acceleratory dissonance still exists, so your rationalization is bunk. You chose that setup to put the VUE in the worst light possible.
Paul Niedermeyer:
“Brazil is GM’s third largest market. Because of numerous constrictions on the market, it has all the symptoms of a seller’s market bubble. Chevrolet’s Vectra (Cobalt) goes for $48k. No wonder GMLAAM booked a $1.3 billion profit in 2007.”
This for me checks as “the same”. Anyways, it’s not an honor point for me or you =). And both are fugly. I prefer the Astra.
Yes, externally they’re very similar, but the interior is another different story (see the pics in chevrolet.com and chevrolet.com.br) we usually get cars that don’t look so much “nice”. They also use Ecotec engines down here. But you don’t get the Flex engines, that can burn any mix from straight ethanol to gas.
Anyway, I REALLY hope the economy doesn’t tank. I personally don’t see the prices going down, competition will effectively move in (I see the chinese coming) but their prices are NOT cheap as you would expect. A Chery QQ goes very similar to a Chevy Spark.
The main thing here, is that we don’t have the market “freedom” you have in the US. Our governments puts restrictions and rules to both manufacturers and sellers. Example, here is the government that establishes how many cars can import each company, if your assembly volume is high, you get a high imports quota, if you’re only an importer, then you’re fu@#$%d, ’cause you get less cars.
Brazil has similar different conditions, a car to be sold there and being competitive, must have a certain percentage of local parts. That’s why plants are being opened in Brazil, Argentina and Uruguay (and Mercosur in general).
I agree with you on the seller’s market thing. Right now is the situation here. You’ve got car to sell, you sell, otherwise it’s another.
Buick61: You chose that setup to put the VUE in the worst light possible.
The Vue has a serious weight problem, under any light, or in pitch blackness.
It represents the inability of Daewoo to develop fully competitive products. Show me one Daewoo/Chevy that’s anywhere close to the segment leaders in any segment they compete in.
50merc:
“DETROIT – General Motors Corp. (NYSE: GM) today announced a second-quarter dividend of $0.25 per share on GM common stock. The dividend is payable June 10, 2008, to holders of record as of May 16, 2008. The dividend is unchanged from the previous quarter.”
GM wouldn’t cannibalize itself just to continue paying dividends. Or would it?
GM used to pay $1 per share dividend. And yes, they would cannibalize themselves. Have done for decades, one way or another.
Paul Niedermeyer :
May 15th, 2008 at 7:09 pm
Buick61: You chose that setup to put the VUE in the worst light possible.
The Vue has a serious weight problem, under any light, or in pitch blackness.
It represents the inability of Daewoo to develop fully competitive products. Show me one Daewoo/Chevy that’s anywhere close to the segment leaders in any segment they compete in.
No one is arguing the VUE doesn’t have a weight problem. You’re running away from the matter at hand. The issue is that even WITH that weight problem, the VUE gets the virtually the same MPGs as the much lighter CR-V.
Buick61: You’re running away from the matter at hand
The matter at hand is which vehicles are considered (by customers) more competitive on the global market. Compare CRVs’ sales numbers with the Vue’s, and then let’s get back to the matter at hand: GM’s problems.
Buick61
That’s actually an interesting find. If the carmakers’ stats are to be trusted, the mileage is very similar despite a difference of almost 200kg (equivalent of two large adult males). I admit I’m surprised that what I thought was a coarse and inefficient unit (the Ecotec) seems more efficient than a Honda.
Buick61,
The fact of the matter is, the Vue is a lard-ass. It’s 500lbs heavier than a Rav4, 500lbs heavier than an Escape and 500lbs heavier than a CR-V. The base vehicles all have similar size and power engines and all the others are significantly faster than the Vue because it’s a lard-ass.
In spite of the additional bulk and weight, the Vue doesn’t have more interior room and, in base trim, doesn’t tow more than the others or offer any significant advantage, except for “road hogging hugging weight.”
GM might have managed an EPA rating similar to the others by pumping up the tires to 175psi or something but when you get this lard-ass out on the road, it is going to get worse fuel economy under most circumstances than the other vehicles. You have to blow up more little drops of gasoline to move the extra 500lbs of dead weight. I’ll bet we find the Vue gets lousy brake life, too, as those pads work overtime to horse the lard-ass back down to a stop time after time.
Back in the day, say when one was buying a ’61 Buick, the performance disadvantage of a lard-ass automobile could be offset, economically, by shoving a bigger engine or thirstier carb in and calling it good. No one gave a damn about fuel economy.
Times have changed. Performance still matters but you can’t just go to the head of your class in performance by burning more fuel. You have to engineer a car that’s as light and efficient as the competition. GM has either not figured out that they must do this or has tried and failed.
p00ch: That’s actually an interesting find. If the carmakers’ stats are to be trusted, the mileage is very similar despite a difference of almost 200kg
It’s not hard to optimise a vehicle for maximum EPA results, especially in the gearing. Here’s the reality: the Vue 4 cyl takes some 11 seconds or more to get from 0-60. That’s slow, for today’s standards. And that’s why over half the Vues sold have the V6. The CRV doesn’t need a V6 for decent performance.
Folks buying so many V6 affects GM’s fleet CAFE negatively. I can assure you, that GM would prefer to be in Honda’s shoes: selling only 4 cylinders CUV’s, and selling LOTS of them.
It’s not hard to optimise a vehicle for maximum EPA results, especially in the gearing. Here’s the reality: the Vue 4 cyl takes some 11 seconds or more to get from 0-60. That’s slow, for today’s standards. And that’s why over half the Vues sold have the V6. The CRV doesn’t need a V6 for decent performance.
Can we assume Honda maximizes it’s vehicle for EPA results then?
Here’s some more reality: a few weeks ago, on these boards, we had a discussion about how silly the old “naught to 60” metric is. Normal people simply do not stomp the go pedal to see how fast they can get from dead to a mile a minute.
The CR-V will go 0-60 in 9.5 seconds, so it’s slightly quicker than the Vue. Will the average driver notice? No. They’ll notice 45-70 acceleration as they get on the freeway, and the difference here will be a fraction of a second.
Just to be picky, MT reports the 0-60 time for the 4 cyl. Vue as 10.6, (GM’s own data) so that’s just barely more than 1 second slower than the CR-V. In the real world of “normal” driving, this is absolutely meaningless.
For the record, my wife and I are long time Honda buyers. We love our CR-V and did not consider the Vue – but the decission had nothing to do with 0-60 times, nor the difference of 1 mpg. It’s just that the Honda was made by Honda.
I hate to quibble again, but there are 27 countries in the EU, not 15. Just sayin’.
Poor GM. I don’t feel sorry for the company, but I feel sorry for the workers whose livelihoods are jeoparidized by this colossus’s ineptitude.
carinamerica: I hate to quibble again, but there are 27 countries in the EU, not 15. Just sayin’
I was purposely seperating Western Europe (commonly referred to as the original EU15 states) from Eastern Europe in my editorial.
Frankly, I feel like I’m being quibbled to death on this editorial. The whole issue about the Vue’s specs is taking one point (about it being overweight) out of proportion. Please take the time to read what I’m really saying about GM’s global problems. It’s not an editorial about the Vue vs. the CRV. Just sayin’.
And will be left unemployed when it finally collapses. OUCH
Stingray: And will be left unemployed when it finally collapses. OUCH
TTAC has offered me a fabulous golden parachute when I’ve killed off GM.
Frankly, I feel like I’m being quibbled to death on this editorial. The whole issue about the Vue’s specs is taking one point (about it being overweight) out of proportion. Please take the time to read what I’m really saying about GM’s global problems. It’s not an editorial about the Vue vs. the CRV. Just sayin’.
Point taken. We’re a quibbling bunch here.
Since I was 12, I haven’t been able to figure out why the Detroit 3 have been so slow to ‘globalize’ their products. Having hundreds of different models around the world prevents them from achieving economies of scale. Why not split the development costs across many markets, rather than just one or two? Sure, it’s a good idea to have a couple of models that are unique to each market, but there should be a lot more sharing of mainstream models. And forget importing; simply re-tool local plants and build global cars locally.
I never really understood the concept that each local market needs its own models. Marketing 101 tells you that a modern corporation creates the market, it doesn’t just respond to it. And more to the point, after having lived and been a car owner and driver in the Carribean, Europe, Japan and North America all I ever wanted was a small car, mostly for city driving, with good reliability and a bit “sport” to it. So one had a fancier radio or CD player and the other had a sunroof and one was blue and the other red. But really, my needs were exactly the same in each place. And now in New York who even wants a car? There is a tough local market for GM – either limos or the subway.
p00ch
Since I was 12, I haven’t been able to figure out why the Detroit 3 have been so slow to ‘globalize’ their products.
Actually don’t be too sure about that. It was only the other day it dawned on me that GM ARE globalising their brands and I didn’t realise it.
Chevrolet and Cadillac are active in pretty much all of the world and it is my guess that GM are (by salami tactics) trying to make Chevrolet and Cadillac their main 2 brands. What it seems they are trying to do is introduce those brands in all markets and let them cannibalise the other brands there (i.e Chevrolet is rising in Europe while Vauxhall/Opel is plummeting) until Chevrolet is dominant. Likewise, Cadillac is doing the same, but with slower results.
Unless, I’m imagining the whole thing, I think GM are starting to form something resembling a plan….
Paul Niedermeyer: The Brazilian Vectra shares nothing with the European Vectra; it’s essentially an Astra with a trunk grafted on. Which is essentially what the Cobalt is. Look at pictures of both of them; they’re VERY similar, minus a few surface creases.
And this is part of the reason I don’t understand why they sell the cheap looking POS Cobalt. For the price of some details the car look to me hugely upscale compared the blah and meh Cobalt/G5 twins.
Why don’t they do that with the USA cars? Why don’t they give them style for the price of the creases and the details? Don’t want Americans to quit buying their trucks? Why not try to be best in ALL the classes?
Build the car you linked to and add in the quality necessary to make the windows and the a/c and the suspension (etc) work WELL for 150K miles. Sometimes it is only the difference in the materials – a better plastic or aluminum compared to a plastic.
Paul Niedermeyer: Frankly, I feel like I’m being quibbled to death on this editorial. The whole issue about the Vue’s specs is taking one point (about it being overweight) out of proportion.
We have a Gen-1 CR-V (153K miles I think) and my in-laws have a Gen-1 Vue. Both have four cylinders. The Vue has the CVT. Both have AWD. CR-V has a 5 speed.
I think the only real difference in the size of the vehicles is the Vue’s width. The Vue seems about four inches wider than the CR-V. Larger interior. I prefer the CR-Vs “leaner” look but the added heft of the Vue does make for a quieter and more comfortable ride on the interstate. I don’t think I would say the Vue is any bulkier in any other meaningful way.
Where the CR-V wins is it’s durability. It’s why we bought a Honda rather than a GM product. At 153K miles vs 80K miles the CR-V has been much less trouble and the Vue has a serious transmission problem on the horizon. The CVT is on it’s way out judging by the noisy chain inside. The web tells me that the CVT is hugely expensive to rebuild %($4300 was price) and it is unlikely that a person could find a good used one b/c GM quit building the CVT after two years b/c of the troubles they had with the design.
Why or why didn’t they get it right before they started selling them? Why oh why didn’t they keep developing the transmission instead of tossing it out the window and starting all over again?
At 153K miles my CR-V hasn’t even needed it’s first clutch. 2nd set of front brake pads. Needed a radiator (plastic tank to aluminum core seam started leaking). Front sway bar links need replacement.
I was offered the Vue to purchase but I politely declined b/c of the impending CVT failure.
If the Vue equals the CR-V in everyway, I’m still going to buy the CR-V despite wanting to support a domestic auto maker.
A big reason that GM and Ford have been slow to “globalize” their products (particularly their European ones) for the North American market is that the size-price correlation is not the same for both markets.
I remembering visting Germany in the summer of 2004 and looking at a brand-new Opel Astra five-door sedan on the showroom floor. The sticker price converted to about $29,000 in the U.S.
GM would go broke even faster than it already is trying to sell an Astra five-door hatchback at that price in the U.S. The posters on this site may say “it’s worth it,” (or it would still be worth it at even, say, $23,000), but the posters on this site are not typical American car buyers. Most Americans, if given the choice between a Taurus or an Astra/Focus at the same price, are going to go with the Taurus.
Note that even Honda sells the smaller, less roomy European Accord here as the more focused Acura TSX. The number of TSXs it sells in the U.S. is about 1/10th the number of U.S-spec Accords it sells here.
geeber
I fully agree on the size-price correlation. That is why we get a beast of an Accord while other markets get the slimmer TSX twin.
However, I don’t think the price of a US/Canada/Mexico-built Astra would be significantly higher than that of a Cobalt/G5. With current exchange rates, a Euro-built Astra is a no-go but if built here, it would be priced like most other cars in its class. And, with oil prices heading north, the size-price correlation may become less of an issue.
# geeber: I remembering visting Germany in the summer of 2004 and looking at a brand-new Opel Astra five-door sedan on the showroom floor. The sticker price converted to about $29,000 in the U.S. Note that even Honda sells the smaller, less roomy European Accord here as the more focused Acura TSX.
Maybe that is what GM needs to do then. Bring them here and take them “upscale”. Maybe that is what they are trying to do with Saturn now – I don’t know.
My point is I will pay for quality b/c quality means I don’t have to buy cars as often. Were the German prices you quoted also including German taxes? I know Italian taxes were huge – annual registration costs were several hundred dollars based on the class of car, type of fuel it consumed, etc. Sales tax was so high it would give ya altitude sickness… I think I heard 30% at one point.