Well, you knew it would. But does it really matter? Now that both Chrysler and GM depend entirely on federal tax money for their survival, who cares if they don’t sell anything? OK, back up. America’s zombie automakers need to sell enough vehicles to maintain some sort of credibility as “viable” companies. But then they can just use the federal “loans” to subsidize lower prices and keep moving the metal, as Chrysler has done. Until, of course, they can’t. Because the general public is well and truly fed-up. First, James Brown sang “Living in America” not “Paying Taxes to Support Detroit.” At the same time, the MSM’s “will they/won’t they file for C11” coverage has buyers nervous about American Leyland’s warranties and residuals. And the two failing automakers have decided to go radio silent on the whole issue (don’t want to scare the horses or queer the lobbyists’ pitch). Bottom line: falling sales and lost “consideration.” As documented by a survey of 40,000 car buyers over the last two months by CNW Research [via Automotive News, sub]:
Fewer new car shoppers are considering vehicles from General Motors and Chrysler LLC at a time when consumer attention is focused on their request for further U.S. government aid, according to a survey released today.
The share of car shoppers who say their primary choice would be a vehicle from one of the GM brands dropped by almost 12 percent, while the share for Chrysler dropped by a third, according to the study from CNW Research.
And more federal money will stop this trend how? In fact, Ford is already picking up from the itsgonnahappen.com failure of their cross-town rivals.
Ford Motor Co., the only U.S. automaker not relying on emergency aid from the U.S. government, has seen a nearly 12 percent increase in the share of car shoppers who say it would be their first choice.
Other winners . . .
“Hyundai and Kia show staggering increases in future consideration,” CNW said. “While that may be considered a distortion because they are starting with a low base market share, it is worthy of consideration considering how well both brands have been doing during the past rough months.”
Earlier this year, Hyundai rolled out a novel incentive program that allows car buyers to return their vehicles if they lose their jobs.
GM has said it is studying the Hyundai offer and may offer a similar program of its own.
Now THAT would be funny, in a tragic sort of way: GM guaranteeing buyers that the company on taxpayer funded life support will back them up if they go bust. Bailout Nation, eh?
I wonder how many people aren’t considering GM and Chrysler because of the uncertain future for both companies. If I were looking for a car, it wouldn’t be the bailout that led me away from those two, it would be that fact that my car is worthless if the manufacturer goes bust. Not to mention the hassle of losing a dealer network for service, the definite headache regarding warranty work, etc. GM and Chrysler are going about this the wrong way, a bailout will not work. CH11? Please?
I don’t necessarily agree that the carmakers have to show some sort of credibility as viable companies. That has not been a criterion so far. To the contrary, they have looked anything but viable, and got the money anyway. Nor other than congressional bluster is there any sign that they won’t get the money again and again.
Indeed, the gov made an extra effort to turn their heads away from demanding signs of viabiilty, in an effort to maintain the fiction.
The successful are now required to bailout the losers. The new America.
The UAW payoff should continue indefinately or until the government runs out of money.
Government tax receipts are down a huge amount. They are quickly putting themselves in the same situation as GM. When the government tells all the successful people that they are going to punish them if they invest and make a profit the money will flow where it is more welcome.
Correlation is not causation.
Unless the researchers ask the question, we have no way of knowing if GM and Chrysler’s greater decline in sales and lost market share over the past 5 months are due to backlash over the bailout with taxpayer cash, or due more to a generalized concern that GM and Chrysler may go out of business. Linking the sales decline to “a time when consumer attention is focused on their request for further U.S. government aid” makes no more sense than saying it is taking place at a time when consumer attention if focused on the possible bankruptcy of GM & Chrysler.
In other words, the argument that people won’t buy cars from a bankrupt car company may in fact be a valid position.
Troy Clarke, pres. of GMNA, told me at the NAIAS, after the first tranche of automaker money from the feds, that GM was consumer testing reactions to the government bailout. I’m pretty sure GM looked at the consumer testing and decided that taking money from the feds would harm consumer confidence in them as a going concern less than if they filed for Ch. 11.
Bloomberg just ran a snippet of an interview with Rattner. It was very reassuring, to me at least, to hear him say that both Wagoner and Nardelli were ‘good guys’ who have been very cooperative. I guess he doesn’t have much experience with panhandlers. Did he expect these losers to spit in his face?
All the almost car czar has to do is look at the history of Saturn and the fact that it’s still around. When this bailout thing started there were people on this board who said it was a payoff to the UAW, etc. I disagreed hoping that the Feds were just buying time, with lots of $, so that the public and all the players would understand there was really no alternative to BR when it came. I’m still holding on to a sliver of hope, but I also think some serious slapping around of the execs would be in order by this time.
Americans aren’t interested in buying rebadged, Opels, Holdens, and Daewoos. GM is probably aware of this because I heard a GM ad on the radio this morning promoting US design and engineering.
As for Chrylser they are a joke. They have had over 15 months to come up with either a legitimate replacement or redesign for the Sebring and have done nothing. Nardelli is proving that is performance at Home Depot was no fluke.
GM gets plenty of money whether I buy one of their vehicles or not. I’d prefer to buy from a company willing to earn my business than one that feels entitled to it. As a result, Ford has risen way up in my list while GM and Chrysler sit right at the bottom below Kia, Suzuki and Mitsubishi.
If I was the average car buyer who didn’t work on his/her own car, I would definitely be worried about who will work on my car, who will cover the warranty, where will they get parts, etc.
Even if some of these concerns are not necessarily valid, I would probably take the easy route and go to a GM/Chrysler competitor that is not in danger of closing shop.
So yes I agree that this is causing a huge drop in interest for GM/Chrysler vehicles.
Anecdote time: I was selling a Daewoo last fall, and every single person who called on it was asking me where they could find parts and service for this car. It was a hard sell, despite the fact that I was selling it dirt cheap compared to the same year and mileage Civics and Corollas.
Ford is getting a big upside from being seen as the last honest American car company. Hyundai and Kia are getting the same kind of positive business bump as Wal-Mart is by picking up move-down buyers. Honda is doing relatively well because its products are well priced values in their segments and it has built a solid reputation. Earning CR’s best automotive company rating isn’t hurting Honda either. In tighter times, more people are going to consult CR than they are The Robb Report.
It is interesting that there are now numbers to put on the anecdotes about a building buyer’s strike against GM and Chrysler for their begging. The C11 stigma those geniuses said they had to avoid at all costs is already upon the companies.
Ford is looking better and better to win the last man standing contest.
“I was selling a Daewoo last fall, and every single person who called on it was asking me where they could find parts and service for this car.”
The values of orphaned vehicles fall to nearly nothing very fast. The funny thing is, a quick look at rockauto.com shows that mechanical parts availability for Daewoos is still very good. Trim and body parts are probably hard to find though.
Kind of a story that is getting a bit old. Total uncertainty regarding the future, I mean.
It has to be clear, finally, that it would have been much better to have one or both in a government funded pre-pack C11 from the outset, or perhaps Chrysler straight to Ch7. Then people could actually see a future in whichever are in that kind of Ch11, because it would be obvious to all the government/taxpayer was truly in too deep for the Company to fail and they would be around for service, parts and warranty.
Well many of you in B&B land know I’m the “resident” member of the Society of Automotive Historians.
This scenario now happening to GM and Chrysler is pretty much exactly what happened to all of the non-big-3 automakers after WWII (which big-3 dealers always called ‘independents’ – in a slightly desparaging manner, of course).
Hudson. Winning at the racetrack time after time after time was not enough.
Packard. Essentially winning the Battle of Britain (without which Europe could not have been liberated) was not enough.
Studebaker. Gorgeous Euro-styling from 1953, the first ‘independent’ modern V8 from 1951, and a highly advanced automatic drive (3 speeds and a lock up torque convertor from 1950-1956, a good 28 years ahead of Chrysler), were not enough.
Willys. A far better-than-the-competition early 1950’s ‘compact’ car was not enough.
So, how will history look upon the early 21st century Dodge Avenger and Chrysler Sebring?
Four letters: D R E K
Ford’s success lately is puzzling considering on the whole their product line is inferior to GMs.
Ford really has nothing to compete with the CTS, Camaro, Malibu, and Corvette. Products aside, maybe Ford is just a better run company.
@akear
The quality of Ford products continues to improve. Their product line is not inferior to GM’s. Taste may be subjective, but quality is not.
As for Ford having nothing to compete with GM, I submit the following list of GM products you mentioned, and their stiff Ford competition:
CTS: MKZ
Camaro: Mustang
Malibu: Fusion
Corvette: Shelby GT500
Since Ford has made well-documented improvements in quality, and has dramatically lowered their warranty costs, interested buyers should seriously consider going with Ford.
Interesting that the stock ticker on the right doesn’t show that much disinterest in GM. Up above $3?????
akear: Ford really has nothing to compete with the CTS, Camaro, Malibu, and Corvette. Products aside, maybe Ford is just a better run company.
A full-line car company cannot survive on an entry-level luxury sedan, a retro-pony car and a $50,000 sports car, no matter how good they are.
GM may have better offerings than Ford in these segments, but they are obviously not enough to save the entire company.
And I would question whether the Malibu is better than the 2010 Fusion.
# FishTank :
March 20th, 2009 at 10:30 am
Interesting that the stock ticker on the right doesn’t show that much disinterest in GM. Up above $3?????
Does it really matter? 18 months ago, it was at $40, together with HMC.
geeber :
March 20th, 2009 at 10:42 am
A full-line car company cannot survive on an entry-level luxury sedan, a retro-pony car and a $50,000 sports car, no matter how good they are.
And I would question whether the Malibu is better than the 2010 Fusion.
Very true. CTS, Camaro, and Corvette are totally irrelevant.
Malibu is not better than the (new) Fusion. And there is nothing from GM to match the Focus.
Ford good. GM and Chrysler bad.
wsn :
March 20th, 2009 at 10:47 am
Malibu is not better than the (new) Fusion. And there is nothing from GM to match the Focus.
GM has better “halo” product, Ford has better bread and butter product. If Ford had invested money in bringing over the newer generation(s) of Focus instead of half-baked sheet metal restyles, they’d have sold my father a new one by now. He was the first in town to own a ZX3, the car has been autocrossed a LOT and he still commutes in it at 125k or so miles. It’s getting a little tired (needs paint, gear linkage is screwy and the clutch occasionally slips), but because Ford dropped the hatch and wagon on the US Focus, he’s holding out and hoping he likes the new Fiesta.
But (last I checked) the Focus still is worlds nicer than a Cobalt.
One good thing that could come of Chrysler’s demise, maybe Ford could then put the Cummins diesel in their trucks instead of the PowerJoke.
The GM & CryCo bailout didn’t stop me from considering them. I recently bought the Ford Fusion, liked the Impala LTZ & SS but 30K was too much, thought the Malibu was narrow width inside and uncomfortable seats. Pontiac G8 and G6 were too 90’s looking with their bugeye front ends. I don’t mind the new Sebring looks but seats didn’t fit me.
CHallenger, Camaro, Mustang… I’d be in jail or w/o a license by June.
Ford has the Fusion Hybrid coming in a few months, GM has the volt coming Nov 2010 (almost 2 years!) and Chryco has…
There’s no way I’d buy a Chrysler or GM product even when they were raking in money up through 2005 or so. Now that they’ve been feasting at the taxpayer trough, I have even less respect for them. If they were somehow both able to return to profitability and payback all the money they’ve “borrowed” and get quality on par with Honda and Toyota, I’d still be hesitant to buy anything from them. That’s because they let things get so bad and didn’t act soon enough to try to correct the problems.
However, I would look at a Ford product, assuming they don’t decide to turn to the dark side. The new Fiesta looks decent, but I’m still sad there’s no diesel option for the U.S. But at least it’ll be available in a 5 door configuration. Does anyone know when the Fiesta will be on sale? From what I found, the U.S. sale date is 2010?
My wife is looking for a new car and asking for my input. No way we are looking at GM/Chrysler. Ford? Yes, the other 2? No.
@ menno:
Packard didn’t win the Battle of Britain, if you mean their version of the Rolls Royce Merlin engine. B of B was June to October 1940. As the Brits would say, “Me Dad was there”.
Packard was selected to build an (SAE) version of the Merlin about October 1940, and their versions didn’t really come into use until 1942.
Packard didn’t win the Battle of Britain, if you mean their version of the Rolls Royce Merlin engine. B of B was June to October 1940.
Correct. Packard wasn’t making Merlins during the Battle of Britain. That was fought using Hurricanes and Spitfires powered by Rolls Royce engines.
The Packard-built Merlins were mostly installed in P-51’s, which did not participate in the Battle of Britain. So no, Packard didn’t play a role in that battle.
Other winners . . .
“Hyundai and Kia show staggering increases in future consideration,” CNW said.
This indicates to me that many ex GM and Chrysler owners will migrate to the Koreans (and some Japanese and Europeans) as well as Ford. Ford will not pick up all of them. They might not pick up most of them. This is why the “kill Chrylser to save GM” logic is so flawed.
akear:
“They have had over 15 months to come up with either a legitimate replacement or redesign for the Sebring and have done nothing.”
http://www.allpar.com/cars/concepts/chrysler/200C.html
“…(200C) has an exciting look which retains much of the 300’s feel, while modernizing it and giving it a much more aerodynamic-looking shape; reportedly, it looks like the Sebring prototype before Daimler got hold of it.”
Also the interior of the current Sebring wil be redone. Count on it. The first trial to get things right was the Patriot (and the new Ram). They wil apply what works there to the Sebring redo. Expected in MY 2010 (this fall).
akear :
As for Chrylser they are a joke. They have had over 15 months to come up with either a legitimate replacement or redesign for the Sebring and have done nothing. Nardelli is proving that is performance at Home Depot was no fluke.
FYI – you can’t change vehicle offerings on a finger-snap like you could screwdrivers at Home Depot. Platforms are planned for 4 to 6 year lives. New models take time. Tooling on existing models is paid…so any $$$ an OEM can get on an existing model is close to “money for nothing and chicks for free” at this point.
Love the graphic! I’m a B-17 docent at the Palm Springs Air Museum. Our bird, “Miss Angela” is only one of 11 B-17s left in the world that are still air-worthy. Am frequently asked by visitors how the crews got out in the case of an order to bail-out. Some of the hatches open into the windstream. The front one has a pin to pull the hinges. The tailgunner’s, however, does not.
I stand corrected re: Packard & Battle of Britain. See? You can tell I’m a car guy. My airplane knowledge is less than stellar.
But I’m sure everyone got the point; “doing great things and great cars doesn’t always cut it.”
Especially when the competition is cut-throat (as GM had been from the 1920’s on until epic fail started to creep in, at or around their zenith in the early 1960’s).
It’s taken 45 years for GM to fail.
I guess it takes a dinosaur a long time to die from smoking their own PR papers. Or something.
“Ford’s success lately is puzzling considering on the whole their product line is inferior to GMs.”
Say what?
The Focus is a better car than the Aveo or Cobalt.
The Taurus is a far better car than the Impala.
Malibu might have a slight edge on the Fusion, but Fusion has demonstrated excellent quality in its several years on the market while the new Malibu is an unknown.
Silverado vs. F150 is a very close battle.
GM kicking Ford’s product butt? I don’t think so.
“maybe Ford could then put the Cummins diesel in their trucks instead of the PowerJoke.”
The Navistar sourced PowerStroke dies the end of this year. Whether an internal Ford product or another engine supplier’s product replaces it is still the subject of much speculation.
I’m really surprised this quote wasn’t picked apart more:
“Ford Motor Co., the only U.S. automaker not relying on emergency aid from the U.S. government, has seen a nearly 12 percent increase in the share of car shoppers who say it would be their first choice.”
Ford got a large line of credit from the government instead of direct loans. In terms of severity, this is a long way from what GM & Chrysler got but to the Ford stakeholders the secure line of credit helped calm the stampede of repayment demands.
The GM/Chrysler loans do not remove the fact that the credit for Ford line was a) aid from the government and b) done in an emergency (since no self respecting bank at that time would have backed a credit line to any automaker).
akear, the Camaro looks nice and all, but any car you can actually buy beats one that only exists as a prototype. Why didn’t GM introduce it two years ago when Transformers came out?
wsn: And there is nothing from GM to match the Focus.
So what is the Astra? 3-door and 5-door versions. Last I checked the Focus that we get here in the USA is only 2 and four door sedans. Yuck. If I’m buying small I’ll take a hatchback. MUCH more useful that way…
akear: Americans aren’t interested in buying rebadged, Opels, Holdens, and Daewoos.
Nah – I just think Gm does a miserable jobof promoting them. MANY of the people I talk to don’t even know what Opel or Holden is. They aren’t buying the G8 b/c they don’t know what they are and the nearest Saturn dealer is over 100 miles away. I have YET to see an Astra in person. Neither are ever promoted very well.
FWIW I’d rather have an Opel or Holden design than most of what I see designed in Detroit by GM or Chrysler…
The relevance of comparing GM and Chrysler to the independents of the 50’s is this. Once, the public smells blood in the water, there is no turning back. People will not intentionally buy an orphan or soon to be one. Buyers know that Olds went first, saab, saturn, and hummer are next and pontiac will hang in the corner of a buick store by a thread thinner than the eye can see. Then there is buick, which has two car models and has a thread like a 5 pound fish line. That leaves chevy and caddy, neither the top performers in their markets. Can a specific motors “SM” be what is left of GM?
Great picture.
I’m wondering how much of the new goodwill toward Ford is deserved, or merely a result of the hate directed at C/GM.
The Koreans and Japanese will still top my list for next car purchase, but I love the depreciation of the Chryslers when searching the used car market.
John Horner :
March 20th, 2009 at 1:25 pm
“maybe Ford could then put the Cummins diesel in their trucks instead of the PowerJoke.”
The Navistar sourced PowerStroke dies the end of this year. Whether an internal Ford product or another engine supplier’s product replaces it is still the subject of much speculation.
Interesting to hear. The 7.3 was OK, the 6.0/6.4 not so much.
There’s a farmer who drives his 95ish Dodge Cummins by twice a day to feed his cows, and the truck runs fine, but the rest of the truck is literally coming apart. Same for another friend’s near identical Cummins. Great engine, junk everything else. Dropping the Cummins in the Super Duty would be like the old 70’s Reese’s peanut butter cup commercials…(ugly nose on the Ford notwithstanding).
joeaverage :
March 20th, 2009 at 4:01 pm
wsn: And there is nothing from GM to match the Focus.
So what is the Astra? 3-door and 5-door versions. Last I checked the Focus that we get here in the USA is only 2 and four door sedans. Yuck. If I’m buying small I’ll take a hatchback. MUCH more useful that way…
Agreed, but you’ll pay a premium for the Astra.
Chevy Aveo starts at $12,625
Ford Focus starts at $14,995
VW Rabbit starts at $16,300
Chevy Cobalt starts at $16,330
Vauxhall…err Opel…err..
Saturn Astra starts at $16,495
I did a quick online search of area dealers, but couldn’t find an Astra on the lot for under $19,000. I found a Focus marked “invoice” at $15,142, and a Rabbit at $17,414. Aveos can be had for $12,170 and Cobalts $16,860.
So while GM does have what is probably a fine product in the Astra, it’s hidden at the Saturn dealer where there hasn’t been decent product in more than a decade. If they’re still doing the “no dicker sticker” bit at the dealers, the poor car doesn’t have a chance when you can get the VW for less. And that’s without even looking at the Japanese products.
What I don’t get is with the Cobalt — on the same platform as the Astra — still looks like a re-skinned’91 Cavalier. But it does “more” engine for less money. Haven’t driven (or really studied) either, because if I was shopping the $15-20k segment, I’d be looking at Mazda3 and Subaru Impreza.
We are talking only $1500 difference between the Focus and the Astra. Believe me I’m not going to worry that much about $1500.
I’m going to buy what I want. If I am going so far as to spend HUGE money (anything more than $5K is huge money to me) on a depreciating asset then I’m going to buy what makes me happy. Sunroof, cruise, CD player, a/c, alloy wheels, etc.
Besides that is a $25 difference per month between the Focus and Astra if the vehicle is financed for 60 months. I did note that you ouldn’t find anything approaching the invoice price. I’d guess that if a person showed interest in an Astra that Saturn might “make a deal” just to move SOMETHING off of the lot. I haven’t bought a Saturn before so I don’t know how firmly they are priced.
GM prob ran the numbers and decided that they expected to sell X units and so they’d make more money building them in Europe. If the car was a runaway hit – I don’t know how since they keep it a secret – then they could build a production line here or Mexico.
As much as I want to reward GM for a product that I wholeheartedly approve of – this coming from a guy that still hasn’t seen one in person – I won’t be lining up to buy one b/c the timing is all wrong for me personally. Maybe on the used market? Makes me sad b/c finally GM did something right but I don’t feel like I can support them here. Want to. Not enough to dive into a car payment though.