Canada’s Derosiers Automotive Consultants had a think about the future of the North American new car market. You can read the results of their analysis here, for no money down, no money per month, for no months. To make a pretty pdf short, the Detroit Three still have “an inferior business model from most perspectives.” In fact, “[i]t is a huge leap of faith to believe that their strategy will work given historical precedent.” Uh-oh. “Unless the D-3 can turn around their market share losses then no amount of Government money can save all three of these companies. Best case is we end up with two Detroit based companies instead of three and there is a very real scenario where we end up with only one.” In other words, this could well be the most expensive game of musical chairs the Canadian and US government has ever played. OK, not ever. But in a long time.
Well GM hasn’t yet made enough changes to their business strategy to make me believe that they’re on the winning track. A new 4 cylinder Buick isn’t going to fix a company with serious image issues and the absolute ineptitude to get anything done in a timely manner. Their executive offices need to be cleaned up and restaffed with people that give a damn. Pronto.
Chrysler could pull it off, I think, with the right products, but does that mean rebadged Fiats and Alfa Romeos based on the LX platform? And does Sergio give a rat’s ass about the Chrysler brands, or is he simply interested in a Fiat relaunch and then, “Arrive derci, Chrysler”?
Ford’s teetering right now, and another bad year could bring their house of cards down too. Lots of people are giving them credit when really they’ve done the same thing as GM and Chrysler for a long time, focusing on trucks while cars were pushed to the back burner. Their saving grace so far has been all about timing, having set up private financing before the collapse happened. Don’t get me wrong, their new products look promising, but so do some of GM’s. At this point I think the difference with Ford isn’t going to be a great product strategy, it’s going to be based on a quick recovery of the world economy.
We could very easily be left with no American automakers, or a couple that are on (government) life support. The blatant mismanagement of all three has finally caught up with them.
The words “deckchair” and “titanic” spring to mind….
We could very easily be left with no American automakers, or a couple that are on (government) life support. The blatant mismanagement of all three has finally caught up with them.
Yes and no. Ford actually has a good line up of cars. Nothing too bling and nothing too bland. The pricing’s about right and there’s the added incentive that some pious Americans will get smug satisfaction of not driving a Gov’t Motors.
Seriously people, since when have we been so disillusioned to believe that the D3 can’t pull themselves out of their tail spin? We all act like if they don’t make a profit in the next five minutes, then they obviously can’t make a profit in ten. Huge corporations are like supertankers; they take a long time to turn themselves completely around, but it can be done.
If the Japanese and Koreans make such damn wonderful cars, then why don’t I see an ’86 Accord tooling around or a ’91 Accent like I do an ’86 Impala or ’91 Taurus? That goes the same for the Germans. I love BMWs, they’re great cars but I can’t afford one nor can I afford the maintenance of one. The Mini right now has been recognized as having the most problems per car in the first 90 days in yesterday’s USA today, while Ford is in the top ten of least probs.
The money slide to me was the one showing market share… the trend has been consistently downward for at least 15 years. The current “crisis” accelerated the trend and demonstrated the lack of urgency amongst the managers of GM.
The market share decline has continued through at least 3 or 4 model cycles so the continuous “this new SUX6000 model is going to change things for us” blabber really comes into perspective. Additionally, the “Big 3” weren’t able to really take advantage of the huge sales volume in the U.S. over the past few years as their piece of it. I can’t recall the last time GM actually made an operating profit in North America if one removes GMAC mortgage financing.
Ford may have a chance. They got religion back in the late 70’s and managed to make the Taurus. They then did pretty well for 5 years or so, but like all reformed drinkers (koolaide in this case) eventually went back to their old evil ways.
GM? Well, what’s the old line?
“Insanity is doing the same things over and over and expecting the result to come out differently”.
See the Volt article.
Because they’re a consulting think tank, that makes them smarter? That’s been said here for, um….. how long now?
stevelovescars:
I’m not sure I’ve been looking at the same market share data as you. What I’ve seen had both Ford and Chrysler getting hammered between 79 and 82 or so, then holding within a roughly steady range until gas spiked 3 yrs ago. GM has been another matter – they came through the 79-82 fiasco pretty much unscathed, with market share still in the mid 40s. But since 84 or 85 have been on a solid downward trend, that was accellerated 3 yrs ago.
There is a significant share of the market (much of it, but not all, southern, midwestern and rural) that still considers a US make the first option. These are forgiving customers, and if the US brands start to provide some solid, long term quality, this is something to build on.
If I am an anecdotal example, I was very happy with my Ford E-150 Club Wagon, and would have bought another until the summer of 06 when gas hit $4.25. I decided to nail down a small car. Nothing built by a US manufacturer was that appealing, and I had heard hundreds of examples of short-lived Escorts, Neons, Cavaliers and the like. Bought a Honda Fit. Had there been a US built small car with the kind of reputation that Honda has earned over the years, I would have shopped it.
The biggest asset that Ford has that *neither* the other two have is the complete revamp of their lineup, bought and paid for. That will pay dividends for at least four years while GM has a few bits and pieces and Fiatsler has Photoshop.
It’s a real bitch to try the “new and improved” bit when it’s the same old crap that we weren’t buying before.
You have to wonder why GM, Chrysler and Ford can´t build cars that americans want.
After all they should know that better than the Europeans and the Asians.
@delorean23:
“If the Japanese and Koreans make such damn wonderful cars, then why don’t I see an ‘86 Accord tooling around or a ‘91 Accent like I do an ‘86 Impala or ‘91 Taurus?”
Possibly because the Accent wasn’t sold until 1995 ;-)
However, let’s compare a 1991 Ford Taurus, 1991 Toyota Camry, and 1991 Honda Accord. For each, I selected the most basic models, assumed 100,000 miles (for an 18-year-old car), and marked them as ‘good’ condition. The “private party” results from edmunds.com:
’91 Taurus L Sedan 4D : $ 750
’91 Honda Accord DX Sedan 4D : $1,975
’91 Toyota Camry Sedan 4D : $1,975
That’s not the same as “seeing them around,” but it does show you what the market (aka public) thinks they’re worth.
If the Japanese and Koreans make such damn wonderful cars, then why don’t I see an ‘86 Accord tooling around or a ‘91 Accent like I do an ‘86 Impala or ‘91 Taurus?
86 Impala? Most of them are either donked up with crate 350 motors and 26″ or 30″ wheels or smashed up at demolition derbies.
91 Accent? Didn’t exist. You did have the Excel, though, which thankfully aren’t around in any large number.
But I will say this: the average 86 Accord is usually in better mechanical shape around here than a 91 Taurus is. The Accord’s only soft spot of that vintage are rust and those pop-up lamps being stuck in the up position.
I began to ‘see the light’ after test-driving the much-anticipated Chevrolet Citation X car in the fall of ’79 which to me was a total turn-off.
Prior to that I owned 2 GM and 2 Ford vehicles and have not owned any Chrysler cars in 52 years of automobile ownership.
Like so many others commenting on the plight of the former so-called ‘Big Three’ they have been the masters of their own undoing—lack of innovation, shoddy products, a condescending attitude towards their customers, short-term thinking, businesses run largely by finance and marketing men—and for the past 20 or so years influenced by the MBA types and their vaunted business models—how sad!
Aug 30 2007 “These cuts will be temporary”. May 18 2008 “Theres no crisis in the auto industry”
Just a couple of quotes from Dennis DesRosiers. DeRosiers has been exposed as a fraud. None as in zero of his predictions in the last 10 years have born fruit.
Mr Farago, your predictions are about 95% more accurate than DesRosiers. Your man in the US,I think his name is Cole. His daddy was a GM CEO. Mr Cole is a company mouthpiece,but he would be a model of integrity compared to DesRosiers.
DesRosiers is a whore, he will fuck anybody for the right amount of cash.
Robert, do TTAC a service and don’t ever quote the BS that erupts from DesRosiers yap.
The key to survival will be quality low cost product. Just as it was in the Great Depression. The Koreans are champs in this regards. The Japanese are no slouches. The Europeans are so far out of it they don’t count. Ford – Focus/Fiesta/Fusion probably won’t keep them in the game. They don’t stack up well against the Japanese or Koreans. GM – Cobalt, Cavalier, Malibu – Same problem as Ford, having one world class car is not enough to keep them in business. Chrysler – nothing competitive.
More than likely, we will see Saturn under Penske, and some other startups, such as the Chinese, replace the diminished three. Odds are against any of them making it.
Dimwit :
June 24th, 2009 at 6:09 pm
The biggest asset that Ford has that *neither* the other two have is the complete revamp of their lineup, bought and paid for. That will pay dividends for at least four years while GM has a few bits and pieces and Fiatsler has Photoshop.
Actually their biggest asset is they don’t have the government directing their business.
Good report that covers pretty much everything.
Yup. Derosier qualifies as one of the “Best and Brightest”.
dolorean23, I see 3rd-generation (1986-1989) Accords driving around Denver all the time. In fact I drive one myself (`87).
Cheers,
Jeremy