Shock, horror, outrage, grudging acceptance, agreement. This pretty much covers the reaction to the announcement buried within Ford Motor Company’s first-quarter earnings report.
The automaker that brought us the Thunderbird, Fairlane, Crown Victoria, LTD, Galaxy, Torino, Pinto, Fairmont, Tempo, Taurus, Fusion, Fiesta, Festiva (sorry), LTD II, Contour, EXP, Custom, Five Hundred, and other car models will relegate its passenger car lineup to just the Mustang and a lightly lifted Focus hatch, now classified as a crossover.
Almost anything can be a crossover these days.
Be it bold or short-sighted, Ford has at least made its vision of the near-term automotive future crystal clear. And buyers helped form that vision. Consumer preference led Fiat Chrysler Automobiles to make a similar decision two years ago, just without the same resulting ripples of outrage. No one wanted a Dodge Dart or Chrysler 200, so it left the compact and midsize sandbox in the hands of other automakers. Traditionalists still have their Dodge Charger and Challenger and Chrysler 300, and police fleets can turn to the Charger if the Ford Police Interceptor Utility isn’t to their liking. Urban types have the Fiat brand while it’s still around.
That covers two-thirds of the Detroit Three. But what about General Motors?
Just in the last month, we’ve heard GM Korea say it’s thinking of scrapping the Chevrolet Spark in favor of a better-selling crossover, targeting the entry level space below the Chevrolet Trax. The subcompact Sonic appears doomed, as does the long-running Impala — a full-sizer nervously plodding along in a market that isn’t too kind to tradition.
That leaves the midsize Malibu (refreshed for 2019) and the compact Cruze (also refreshed, but now built on a single shift at Lordstown). Like the Mustang, the Camaro (again, refreshed for 2019) remains ready to compete in the pony car space and sprinkle athleticism over the brand.
Put yourself in Mary Barra’s shoes. Minus the Camaro and Corvette, there’s five passenger cars in the Chevrolet lineup. Two more populate the Buick stable, while Cadillac currently fields four (the short-term strategy shows the brand moving to three). You’re being asked to position the automaker as a forward-thinking company with a finger on the market’s pulse.
So, what do you do with GM’s passenger car space? It’s in your hands now. Which models live, which ones die, and which vehicles would you turn into … something else?
[Image: General Motors]
Look at the European model. There, pretty much all the “mainstream” marques sell crossovers, whereas the “premium” marques sell passenger sedans.
So follow Ford and kill the Chevy sedans, rebadge their replacements as Buick / Caddy.
+1
But I expect the Lincoln MKZ and Continental to die as well. So I see:
Chevy: Keep Cruise, Corvette and probably Camaro, kill the rest (RIP Impala)
Buick: Kill all but Regal (or whole division)
Cadillac: Add SUV’s, maybe trim one car line. (think livery, etc)
I am excluding electric cars in my Kill list. These will not be killed (and part of the reason to keep the Cruise)
Chevy:
Small/Medium: Cruze
Medium/Large: Malibu
Corvette
Camaro
Colorado
Silverado
Trax
Equinox
Traverse
Tahoe
Suburban
Small Electric: Bolt
Medium Electric: Cruze Electric
Buick:
Small/Medium: Regal Sportback
Large: LaCrosse
Wagon: Regal TourX
Encore
Envision
Enclave
-I don’t see them dropping anything but the Cascada because of the significant investment in the Avenir line. They need to build the sub-brand and expand it.
Cadillac:
Small/Medium: CT4
Large: CT6
XT4
XT5
XT7
Escalade
And resale value of the/any future discontinued models goes into the septic tank.
Ford and GM MORON executives have hitched their production schedules (or in GM’s case, are increasingly doing so) to higher purchase price vehicles – in many cases where the bulk of their current profit model rests on $50,000 to $85,000 large SUVs and pickups (that depend on low interest financing) in a bubble economy with rising interest rates (and inevitably, far higher fuel prices).
U.S. automakers GM and Ford are short-term thinking, incompetently-run companies, and have been since the 1980s.
Their upper management and especially executive ranks are full of true imbeciles, with very few exceptions over the last 40 years.
And now, they are making a far worse error, based on the same urge/itch, that they did in the 1990s, by putting way too many eggs in too few baskets, but in an even more extreme way as they eliminate sedans and coupes altogether, BASED ON CURRENT SALES NUMBERS AND CURRENT CONSUMER PREFERENCES.
GM, Ford and FCA (the D 2.5) are essentially going to mainly cede the car market to the Japanese, Koreans and Germans.
These companies are truly run by incompetent morons with their pea-size brains, fixated on a short-term fixated schedule/outlook, at the very risk of destroying the companies that they are employees and over-compensated (grossly) by.
When they went far too heavily into the SUV and pickup truck end of the pool in the 1990s in order to max profits, they at least didn’t eliminate plant/capital/production lines that still produced a full line of passenger sedans and coupes – you know – to NOT hand that segment over to the Japanese, Koreans and Germans, and to be up and running for when the pendulum ultimately swung back to some degree.
MORONS.
Execs at Toyota, Honda, Nissan and Hyundai, in particular, must look upon Ford and GM execs as the most incompetent human beings in the world.
Calling them morons over and over doesn’t change the facts. GM & Ford have made a legit effort to build and sell mainstream cars. The market is not willing to buy them in numbers or margins that warrant future investment. Why should they keep throwing good money after bad? The only morons here are the people who want these companies sell cars at a loss.
that’s it in a nutshell sportyaccordy, and the market always follows the price of fuel! fuel goes up, large vehicles go down, vice versa!maybe not for all people but the majority who can’t afford to pay $100 a week to propel them around, small sedans are being replaced by small cuvs. i went from a chevy cruze to a buick encore thinking the price of fuel 1 1/2 years ago was only going to go up, i was wrong at the time but here we go again! getting ready for electric next!
It’s not even that the execs are morons. The current system has shareholders expecting results now. Nobody is concerned about the future. The execs know they won’t be around in a few years. They have to kick the can down the road and focus on today. They’ll sell their stocks way before their actions have a negative impact on stock price. Look at DeNysschen. Although I don’t believe his strategy was going to work, but it was a long term strategy. I don’t understand investing so much money and resources in a long term plan and then killing it before it would have worked by his timeline.
Ditching cars completely makes no long term sense because the CUVs are always going to be built on passenger car architectures, and the investment isn’t big enough to risk the future. When you don’t care about the future, and the present is the only thing that matters, you can ignore the future to save a few dollars today. That’s where they’re coming from, and that’s how the system works for all public companies, not just automakers.
MBella you’ve got it nailed. This is all driven by activist shareholders that are driving vaunted market efficiency to some scary singularity where we’ve outsourced every single blue and white collar job overseas and consolidated and “synergized” for the sake of cost cutting and better returns and bumping GDP a percentage point. The longer I’ve been in the corporate world, the more I am realizing this, and the scarier the future seems. Is our future some sort of UBI/corporate welfare system modeled off of Wal Mart’s current operation?
A good friend of mine is an architect, and I once asked him, “Is it hard to get your clients to plan for 15 or 20 years down the road?” He looked at me with utter incredulity and said, “Are you kidding? You can’t even get them to look five years down the road.” These are businesses rather than homeowners, but they’re business that own their own buildings and will be there indefinitely.
This thread has me depressed, thinking about the a-hole president of my company . . . .
“Ditching cars completely makes no long term sense because the CUVs are always going to be built on passenger car architectures”
You don’t need to build a passenger car to design a passenger car architecture. If platforms could be built for sedans only as they were in the past, they could be built for crossovers only in the future.
You have to realize, the Fusion’s sales have slid by 1/3 (and falling) in the last two years. To put a number on that, that’s 100K cars. At this rate, Fusion sales will fall to zero by 2020. Probably extreme, but there’s no indication that will change, especially since competitors with full revamps are doing just as poorly. Why throw good money after the bad? Ford will still sell cars abroad. If demand picks back up again they can just re-federalize and come back. This is smart business both for short term shareholders and the long term. Dumping capital into undesirable products is just bad business.
The thing is that the Fusion sales dropped because Ford cut down the number they sold to gov’t and rental fleets dramatically which probably accounts for at least 60% of that drop. The other thing is that you can build a car alongside its platform mate CUV. The only reason what so ever that the Taurus has been available for the last 5 years is because it shares an assembly line and platform with the Explorer. Fact is as of 2017 the Fusion sold as many units as the Edge, MKX and MKZ combined.
DeadWeight,
I do enjoy reading your comments, and guess what? I don’t find you calling someone a moron offensive.
I do believe you are correct that the US vehicle manufacturers, GM in particular, since you loathe them are the issue.
But, how to resolve the issues and what are the issue I do believe you are totally incorrect.
You seem to concentrate on brands/models, look deeper mate and find out why the brands/models in some instances are incorrect.
The problem starts with management, I agree, but the problems are not what they select for vehicles. It what controls the industry, regulations and protection. This is the underlying problem with not just GM, but Ford and FCA.
@DeadWeight
Hyundai’s vehicle sales are in the Toilet. Good chance the company doesn’t survive until the next recession.
Toyota- Scions dead, Prius is dying, Designs new Camry then emmediatly starts to discount the Sh!t out of it. I don”t think those outdated gas guzzling trucks and SUVs are going to sell too well when gas prices spike
Honda-hard to take a brand seriously that can’t sell a pickup truck in the U.S.
Nissan- Fleet sales, Fleet sales Rah!Rah!Rah!
I’m not sure that they are morons. Look at it this way:
The exec makes some decisions that cause stock market analysts to say good things about the stock. Stock price goes up. Exec cashes in stock options and either “retires” or “gets fired” – it doesn’t really matter which because the golden parachute ensures that none of the exec’s descendants will ever have to work for a living.
Exec in question, having a large network of cronies, can repeat this cycle multiple times.
You can call this process a number of things, based on its effect on society and the larger long term economy, but I am not sure you can call those administering it “morons”.
As long as these characters have no risk of adverse consequences to their decisions (I don’t mean adverse consequences like people saying bad things about them and they still keep all their million$; I mean adverse consequences like “lost house, no money, living in a trailer and working at McDonalds”) there will be no change.
With GM’s pull out of Europe, I would expect only US-centric truckplatforms and Chinese-centric platforms to be produced. So Spark and maybe Cruze might stay, which are on compact/subcompact architectures that sell in high volume in China (although development may shift to China from Korea). But I think Opel-derived midsize car platforms will likely not get replacements.
Ine937s,
I think you are spot on. With the current structure of the US vehicle industry the only way for the Big 2 to survive is to maintain complete protection of it’s large vehicles and import cheap Chinese cars.
Numbers don’t lie… Here are the Chevys with the worst YOY sales drops through the end of 2017:
Sonic- 45%
Spark- 36%
Impala- 22%
Malibu- 18%
Volt- 18%
Corvette- 16%
Camaro- 6%
Suburban- 6%
Tahoe- 4%
Cruze- 2% (though December was -23%)
Everything else is positive. Ironically the Chevy with the biggest sales gains was the SS lmao.
Solution seems obvious. Anyone who thinks a revamp of cars like the Spark/Sonic would turn things around is nuts. If they want crossovers sell them crossovers!
Surprised the GM BOF SUVs are down at ll with how the market is going. My neighbors just re-upped trading in their 10th gen Yukon Denali on a new Tahoe iirc, their neighbors next door had bought a new Tahoe the year prior. Is it Ford’s resurgent Expedition coupled with Nissan’s value-packed Armada taking a bite out of GM’s stalwarts?
Goodcarbadcar used to be so easy to figure out. I’ve been trying to find the data on there but man has it gotten more difficult to use!
Chevy sold 3934 Sonics in March of 2018, which is UP from 3385 last year…. thats +16%! Malibu sold 14707 last month, and only sold 14,222 the same month last yer. Malibu is actually up 3.4%!
that wasn’t really the point I intended to argue though.
The point I intended to make is Chevy is selling a LOT of cars. Are people buying less of them? yes, but that doesn’t mean the market is GONE.
I don’t even know why we segment crossovers and cars the way we do. to me its a silly category.
The problem GM has is that to get decent volume from their cars they need to pile on profit-nuking 20%+ discounts and these segments usually just don’t have enough margin to keep doing that.
Exactly. They have to choose between market share or margin. Either way they are not making big profit in total. Not worth the effort.
I’d have thought you keep the Spark or Sonic around for cheapskates who can’t afford/don’t want to pay the CUV premium, but maybe not given those numbers.
It never made sense to make the Sonic in the US. At the time, GM was running out of cash and that was the only way they could extricate money from the government.
GM should make 5 cars:
A compact, midsize, and fullsizer Chevrolet
A “family man’s” Buick, possibly a wagon.
A retirement-special Caddy
Power the Fullsizer Chevy, the Buick, and the Cad with some variant of the LS V8, and make them RWD. Maybe make the V6 the base engine in the Chevy and Buick.
The current ‘Bu is a real looker, IMO. Chevy knocked it out of the park with that one. I see more than a few of them on the streets and I like them.
Compacts are tricky. The new Civic is a great car. Topping Honda is going to be tough. They may just have to cede ground here if they can’t do something revolutionary to beat the Big H.
Edit: The Caddy should have a “base” option level that aims to simplify operation for drivers who don’t want or need or can’t comprehend excessive tech. It should be luxurious in the classical sense- comfortable and easy to use. Swaths of leather everywhere, real wood, no plastic, and no touchscreens.
You think going back to the 60s-70s would make them more sales and profits?
Considering that was the last time they were hugely profitable…
;-)
I should edit, I forgot about the Camaro and ‘Vette. Obviously keep them.
I really think a well done Impala would sell. Chrysler seems to move the heck out of some Chargers.
“GM should make 5 cars…”
GM died in 2009 and should have stayed dead.
Before long GM will need another infusion of taxpayer bailout money.
And they will get it, while Ford is paring back its line of vehicles to what maximizes their profits.
Ford, the ONLY American carmaker left on the planet.
This administration isn’t bailing anybody out. At best they might facilitate a private equity purchase.
1. I think ford made a big calculation error
2. Chevy should capitalize… With ford giving up 50k/month in sedans, take them! haha. Double the sales of all your cars and you should be a happy camper.
Interest rates are rising, gas is going up, and cars still make up almost half of the sales.
The margin isn’t in cars because the competition is so stiff, but guess what- competition is stiffening in SUVs and Trucks! Like every other industry, that will again create margin compression, which again creates the same issue they are facing now.
What IS reasonable isn’t to “cut all cars” but downsize your offerings. We don’t need “subcompact, compact, midsize, Large Midsize, and full size”. the car offerings got too big for a shrinking market.
Chevy shouldn’t have a “spark, Sonic, Cruze, Malibu, and Impala”. It probabl should instead have:
1. Spark, 2. Malibu, 3. Impala Special*
Cut the Sonic and Cruze because those buyers can move into the spark and malibu.
Now the impala is the one I expect people to disagree with, because their sales are quite low. However, I would literally rebadge a Buick and put NO development into it. Margin compression isn’t as tight in the full size, and so rebadging another car may still make sense as long as you don’t expect volumes.
If you keep the impala as it is, then cut the malibu instead of the cruze. Eventually though you can probably get by with just the Malibu and Spark.
Camaro and Corvette stay, but lower your R&D budget on the camaro for lower volumes and slower ROI cycles.
+1
Malibu and Impala should be merged. gm needs a jeep fighter – the Colorado platform could support an FJ/wrangler type vehicle.
CTS & ATS merged. 2 Cadillac cars – CTS like (mid size 5 series equivalent), with V series and a halo large, powerful car. and design an original mid size suv/cross – the Lexus RX sold b/c is was unique. Caddy never had an equivalent.
Buick should have acura/3 series/infiniti like cars and one big halo car.
and make a special edition, 2 door Pontiac (don’t bring back the division) just name it Pontiac, put a V8 and limited production run.
I would love to see the Colorado platform become the basis for a 4Runner/Grand Cherokee competitor.
Yes please!
The new 8 speed seems to have really woken up the potential of the 3.6L in the Colorado, and the diesel is a really nice driving package (but with questionable reliability, even new). A midsize SUV based on these bones seem like a no-brainer, then again I’m not privy to how CAFE might mess with the business case.
I actually thought the old CTS was the right approach… Bigger than a 3 series, smaller than a 5 series, one vehicle to fit between the other two.
I don’t know why they split it and decided they needed two separate models to fight the germans head to head when frankly they were probably “ahead of their time” in the sedan front. I agree on the CTS argument..
Spark – Kill
Cruze – Kill
Malibu – Kill
Impala – Kill
Volt – Kill
Bolt – Lives
Corvette – Lives (I’d also keep it front-engined)
Camaro – Lives
Regal – Kill
LaCrosse – Lives
ATS – Kill
CTS – Kill
XTS – Lives (and even gets some money spent on it)
CT6 – Lives (and gets a coupe variant)
Generally like your linup. I think a few are definitely judgment calls, some should be kept for image, marketing purposes even if they sell at a loss. I would suggest following lineup:
-Spark – Kill
-Sonic – Kill
-Cruze – Keep and offer additional ride height on the hatchback)
-Malibu – Keep, even if a loss per unit. Still very important space to compete in.
-Impala – Kill
-Volt – Keep to maintain green cred, recent model, soldier on.
-Bolt – Lives
-Corvette – Lives (keep a front engine heritage edition, but go mid engine moving forward)
-Camaro – Lives or last generation (This is a questionable decision as it is a low volume, always second fiddle to Mustang and there is Corvette to fly the performance banner)
-Regal – keep only the wagon/crossover variant
-LaCrosse – Kill (beautiful car with dumb name and no sales)
-ATS – Kill, too small.
-CTS – Lives as entry level sedan, slightly down market to occupy space in A4, 3 Series territory. ATS was too small to compete there and CTS was too expensive to compete there)
-XTS – Kill with fire.
-CT6 – Lives as flagship sedan.
That new Regal SW and liftback will be the shortest-lived things. Like a late Saab 9-5 for parts availability later on.
Still really tempting to chase the TourX or the GS model, buy new – keep long enough to pay off the note. Just to say you had one when all the “cars” are gone or the anonymous transportation pods arrive.
It will be a good story for me to tell in the nursing home. ;-)
Why, I remember the time when I had this Opel wagon built by Peugeot. What a grand day that was!
If you look at inventory levels the new Regal GS certainly seems to be “the car GM doesn’t want me to buy.”
There seems to be only a handful in the country.
I’ve seen “reviews” but not instrumented tests, I’m curious if it is appreciably faster than a Lacrosse with the same basic powertrain.
Although if I can get a deal on a Lacrosse with the “brandy” leather interior – eff the Regal.
I like the Regal GS okay. I don’t think it would be my “last meal” car though.
I’d probably go for a Corvette, Mustang GT, 300C, or Camry V6 for that role.
Camry V6 > than 310 hp V6 + AWD + massaging German chiropractor approved seats + Sport & GS mode + FULL instrumentation ?
Splain yourself young man.
The Camry V6 is a genuine article Toyota.
The Regal is a short-lived German/China/French mutt (although still an endearing one) with a Euroback body style that wears several costumes depending on the continent it is being sold in.
The Buick Regal is currently outselling the Malibu.
I see all the Bizarro-world brand managers are chiming in this morning.
Wagons. All the wagons.
Keep calm and make cars.
My fixes:
Shun convention as much as possible while still meeting current consumer needs.
You need to sell directly to consumers. Build a relationship with the customer.
Forget about market share…don’t make a product because you think it will sell….make a great product.
U.S. automakers GM and Ford are short-term thinking, incompetently-run companies, and have been since the 1980s.
Their upper management and especially executive ranks are full of true imbeciles, with very few exceptions over the last 40 years.
And now, they are making a far worse error, based on the same urge/itch, that they did in the 1990s, by putting way too many eggs in too few baskets, but in an even more extreme way as they eliminate sedans and coupes altogether, BASED ON CURRENT SALES NUMBERS AND CURRENT CONSUMER PREFERENCES.
GM, Ford and FCA (the D 2.5) are essentially going to mainly cede the car market to the Japanese, Koreans and Germans.
These companies are truly run by incompetent morons with their pea-size brains, fixated on a short-term fixated schedule/outlook, at the very risk of destroying the companies that they are employees and over-compensated (grossly) by.
When they went far too heavily into the SUV and pickup truck end of the pool in the 1990s in order to max profits, they at least didn’t eliminate plant/capital/production lines that still produced a full line of passenger sedans and coupes – you know – to NOT hand that segment over to the Japanese, Koreans and Germans, and to be up and running for when the pendulum ultimately swung back to some degree.
MORONS.
I don’t like aggressively calling people morons and pea brained, but I actually fully agree with your argument besides your use of words ;)
I think a big difference is that during the first episode of ‘SUV Mania’ GM and Ford were still using low-cost 70s/80s era engineering on most of their cars so you could justify keeping the the lines for a Grand Am or Vulcan Taurus going even at fire sale pricing.
Ford went especially hard into Euro/”premium” for their cars post-recession and it looks like it didn’t give them much wiggle room in relation to volume or transaction price.
ajla,
Also, the US made “Euro” cars were of a lower quality than their European made counterparts.
Here’s some interesting thoughts for you…
Most of Chevy’s cars outsell what the Wrangler sold per year through 2012, but the wrangler was never killed because it wasn’t expected to sell in those volumes.
The FJ Cruiser never sold more than about 5000 in a month, and no one calls that a total failure.
The Nissan xterra was a worthwhile project despite not exceeding an avg of 1710 units a month over the last 9 years (but wasn’t worth rebuilding at those volumes for new crash and emissions standards).
The sedan market isn’t “dead”. thats writers overhyping articles to create clickbait sensationalism- Just like “SUVs” weren’t a new invention in 2012….
My point simply being that companies like Ford and Chevy need to recognize and adapt to demand shifts. cancelling all your cars literally doesn’t make sense.
Ford sold 210,000 Fusions last year… 210 THOUSAND! Know how many they sold in 2006, 2007, 2008, or 2009? Way less.
Cars are in decline, but car companies need to simply adapt. Slower refresh, focus on cost controls, etc. learn from Nissan here… you don’t need 3 year refresh cycles to justify a car. Start building SUVs at your Car assembly plants, and lower your expectations.
again, 210 THOUSAND Cars is a TON… and thats just the fusion. And say it drops 10% a year for 10 years? Its still 73 THOUSAND per year which is likely viable.
Share platforms. Increase refresh cycles. Rebrand. Cut costs.. but why would you literally just give up on a market that is still huge and viable? I don’t know.
I agree with the sharing of platforms for Ford however they have gone down a hwy without an exit. They have already starting building the Focus in China and the only way to share is to have the Fusion be based on the Focus and shipped here.
I can tell you that one sell very well here. The people that buy Volvos dont care where they are made however the folks that buy Ford do. Yes they can be made in Mexico or Canada or even Korea but not China.
It would have been better if they redid the Fusion completely and based the Focus on it. Its better to reach down than up when sharing a platform.
Well, the only Chinese-made vehicle will apparently be that silly Focus-based Crosstrek-wannabee thing. Do you really think a buyer in the market for that kind of vehicle will care? I don’t.
Easy.
Kill the Spark and Sonic to premiumize the brand.
Keep the rest, with a redesigned Impala and ATS/CTS.
Gas prices may be relatively low, but even now as they’re steadily climbing, people may start favoring mid-size sedans over crossovers again, among other reasons.
Already seen a few driveways in my area trading in their SUVs for sedans – Older couples who don’t need their family Veracruz anymore, downsizing to a Regal; first gen Traverse’s disappearing and new Malibu’s appearing. (Granted I live in the Great Lakes, where the big 3 are still favored over Japanese.)
GM could stay the one domestic brand capitalizing on this eventual trend.
Short term pain for long term gain?
I don’t understand the impulse to try and change commodity brands into premium brands. That’s what Buick/Cadillac/GMC are for. Chevrolet will always be a pleb-mobile. That’s why it exists.
R&D dollars are scarce.
The buying public has made it fairly evident they prefer a CUV/SUV. Development dollars need to be spent on what sells, cars don’t. Time to stop allocating scarce resources to 14 (thx ajla)cars that really don’t sell all that well. Pick the core, Vette’ Camaro for me to start, and move on to CUV.
I am not against the evolution of the name though, as their is no law I am aware of the Impala or Malibu have to remain a car in the sedan sense we think of them today.
You get a CUV (or SUV)…and YOU get a CUV (or SUV)…everybody gets a CUV/SUV. I’m beginning to believe that the vast majority of automotive manufacturers will only provide CUVs/SUVs for the United States market. Maybe I’ll keep my 2013 Cruze, after all. Just one more step towards the inevitable conclusion of driving/riding in your POD. But for now, not everybody wants a SUV/CUV, so I guess the Big 2.5 will turn the sedan market over to the Japanese, Koreans, Germans (and unfortunately, Chinese).
I bought my first korean CAR last year…
Kill them all. All of that money they’ve sunk, and are still sinking, into market dud cars could have filled in the gaping, money bleeding holes in the segments that actually sell.
It’s 2018. Audi has 4 crossovers. BMW and Mercedes have 6 apiece. Cadillac has ONE.
The K2XX trucks are 5 years old and were also-rans even when they were new.
Their mainstream CUV lineup jumps directly from compact to enormous.
No Wrangler. No midsize SUV. No coupe styled CUV. No junior Escalade.
Instead they’ve been building brand new Cruz, Malibu, Lacrosse, CTS, Regal, etc. that nobody wants.
I don’t understand why they sink so much money into it.
There’s a middle ground between “create a new car every 3 years with a 5 billion dollar R&D fund” and “Quit”
ARACH dont waste you time. I have been reading this particular Dan’s last few entries and he obviously hates American companies but probably loves Apple.
If sedans become a niche, dividing the remaining sales among fewer automakers is good for biz- particularly for GM, whose sedans probably get cross-shopped the most against Ford’s. The spark and Sonic should still die, but there may be enough sales for everything else except maybe the Impala.
Other than the Fusion, there’s nothing in this lineup that I would have remotely considered buying anyway.
Ford will still make cars in Europe, and can somewhat quickly bring them here if the demand picks up. GM gave up the European market, leaving them with the cars produced in China. So Ford could reintroduce cars back into the US/Canada market much easier than GM could.
Slap: Remember how that worked for FoMoCo on the Contour/Mystique? The only reason the Fusion did as well is that it was designed from day #1 to be a world car.
Polishdon,
The Focus is in the same league as the Mondeo, it was aimed at a global audience.
The Ranger is the same as well, it’s a true global product. The Transit is another good Ford product.
One of the problems I have noticed is these global vehicle come to the US and are “Americanised” which generally detracts and reduces vehicle quality.
Polishdon:
The Fusion is a world car.
The Focus is a world car.
The Fiesta is a world car.
A world that excludes North America apparently.
I’d rather change the marketing and sell more cars. imagine that.
Tell us about your plan.
“Maybe we could have like a valet who like can’t find the Buick because it’s so anony— I mean luxurious.”
I liked the one Real People commercial with a bunch of college kids being amazed at how much Impala you get for $300/mo or something.
It didn’t sell any Impalas to college kids, however.
Chevy should keep Cruze and Malibu. They sell OK and should be able to survive as Ford competition exits.
Buick and Cadillac should have a large Sedan the size of lwb S-Class, and one midsizer sizer.
This gives each brand two cars.
Buick is probably in the biggest bind. They don’t want to look irrelevant and not in step with the market by fielding too many cars, but if they concentrate on crossovers they’ll step on GMC’s toes and they share a showroom.
Cadillac has too many sedans now – they really should have one sedan (also available in coupe and hatchback, and maybe wagon) that’s sized between the BMW 3 and 5 series, maybe one large sedan, three crossovers (small two row, medium and large three row, and a BOF SUV (Escalade). Abandon efforts to build sport sedans (except V models) – even BMW doesn’t care much about that market anymore – and concentrate on luxury, features, and comfort. Also abandon the silly and meaningless alphanumeric designations (ever notice how well the Escalade sells? Would it sell better if it called the CT7?).
Chevrolet should keep a Malibu sized car and maybe the Impala if it can share its platform, the Vette of course, and continue with lots of CUVs and SUVs. Also work on a small van that can sell to both the consumer and commercial markets; Transit Connects are everywhere, and consumer minivans still sell if you do it right and they have much less competition than crossovers.
I say just send Buick 100% to China.
Nice!! lets get rid of all GM cars, the only car maker whose cars stand out in most cases. sure lets give the market to look a like cuv’s the stupidest vehicle craze ever. also keep in mind that when the craze ends(and it most definitely will)most car makers will not have any kind of sedan to sell. although i like Cadillac’s cuv’s and thats all i like as the Caddy stands out in a sea of look a likes and would like the Sububan/tahoe/Escalade(GMC is redundant)to continue i feel killing off your cars is the dumbest,stupidest most moronic thing an automaker can do.
also as a driver,i like to be able to see the actions of the car thats in front of the car in front of me. try doing that when behind an suv or cuv. keep all the cars
“The world risks a full-blown oil shock within months as three geostrategic crises come to the boil and Saudi Arabia hints at US$100 crude, setting off a speculative scramble by commodity hedge funds.” Financial Post 4-25-2018
Detroit 2½ profits are largely driven by truck sales. If oil prices top US$100 barrel the bloom will come off that rose real quick. With few sedans to sell, then what?
“With few sedans to sell, then what?”
Market consolidation.
Sergio called it several years ago.
Hybrid trucks, 1.5L turbo trucks, things which are not trucks made to look like trucks, and a windfall for buy-and-hold fracking investors. But not cars.
Be the last man standing in the car selling world. Reap the benefits.
FYI this is only reinforcing my plan to buy a sedan or wagon next time around (2019 calendar year) – it may be among my last chances given that I go 6 or 7 years between purchases.
The E2XX is still relatively new and quite good. I could see a Subaru-esque future for both the Opelibu and the Cruze platform as higher-margin active-lifestyle 5-doors, maybe even in GMC garb. Hard to dream up the point of the other Chevy passenger cars except maybe a Volt successor, depending on the market.
The sports cars … I’d keep the Camaro, or at least the platform, as long as it wasn’t insane. They’re getting ridiculously capable and Corvettes may be a hard sell to the class of adults now approaching middle age, to whom they mainly signal an inability to afford a Porsche.
Cadillac doesn’t need sedans and should devote itself unswervingly to making overpowered and useless X4/6/whatever competitors, preferably on the Camaro platform, preferably two-doored to drive the point home. No significant portion of BMW sedan intenders considers a Caddy.
Buick is without a North American future irrespective of form-factor mix. That is still Grandma’s Desert Sand LeSabre to everybody under 50 (see, e.g., my grandma and her Desert Sand LeSabre).
Meanwhile Honda and Toyota keep trying to outdo each other as to who can build the uglier sedan. It’s like they know they have a captive audience, so might as well put on a comedy show. Good thing for Mazda lol
Five gets you ten that Mazda is an all-crossover + Miata lineup by the end of the current product cycle.
Sam…not going to happen. Mazda is so small that they need all the sales they can get. They saw that the Mazda 2 was not selling and shipped it to Toyota and they are selling much better with that badge on it. The 3 is their second best seller and the CX3 is just to small. Even if they bring over the CX7 that gives them 4 CUVs and only three sedans.
And if you think they are going to stop making the MX5…you are wrong.
Doubt it and certainly hope not. I mean if Kia can have what six sedans in the US why shouldn’t Mazda have two?
The Flop Hundred, er, Five Hundred? I’d have left that one out.
Oh, and it’s Galaxie, not Galaxy, unless you’re talking about the European market MPV:
https://en.wikipedia.org/wiki/Ford_Galaxy
GM has been trying to “beat the Japanese” with their cars for my entire life. Give up. It ain’t going to happen.
Circle the wagons and make SUVs/CUVs GM’s last stand. Hope it turns out better than the Alamo.
Actually I would argue that they just started about 10 years ago. Up until that point it is well known that they built to a price point and not to compete with rivals. They even admitted it.
Chevrolet: Corvette coupe and convertible, Silverado, Colorado, Tahoe, Suburban, Traverse, 2 row Traverse, Equinox, Trax, Spark-based CUV, Malibu, Cruze sedan and hatch, Bolt, Bolt CUV, Bolt sedan (to replace the Volt)
Cadillac: Escalade, Escalade styled 3 row Aviator fighter, Enclave rebadged as a Cadillac, CTS reduced in price (5 series for 3 series money), CTS Wagon with lifted variant, large flagship sedan with V8 and EV versions, XT5, XT4, Encore rebadged as a Cadillac
GMC: Sierra, Canyon, Canyon based Wrangler/Bronco fighter, Terrain, Acadia, 2 row Acadia, Yukon, something square and smaller than the Terrain (Renegade competitor), Electric CUV. Maybe Electric pickup
Buick: RIP
I’d keep the C7 around reduced in price, base and Grand Sport, to capture the Camaro market, and the C8 will be the true halo car and will get the Z06 and ZR1 nameplates.
Also all cars will have AWD availability
I got nothin’ about GM.
But I just spent a week in Iceland, and there ain’t a lot of sedans there, all told.
I find a future of wagons and “crossovers” doesn’t bother me at all.
(Bring us Americans the Skoda Octavia and some Toyota wagons!)
GM should, at the very least, dump the CTS. The CT6 is not large enough or good enough to be a flagship, but if they dropped the base price to $49k to compete with the midsize class they might have something. If ATS gets another generation, it needs to be larger and offer more value (you know, like the previous-gen CTS that actually moved units).
Spark, Sonic, and Impala are already dead. Size the next Malibu up to the far end of the midsize class and offer a top-shelf version for the handful of people who really, really want to spend $40k on a Chevy sedan. Pull a page out of the Nissan/Dacia playbook and sell the Cruze on price: old tech, cheap materials, and little-to-no evolution year-by-year. Extra points if they can squeak a totally base model’s MSRP under the $10k mark.
Judging by many of the above comments, the B&B are looking at GM’s issues the same as GM management. That is what do we cull or retain in our brand/model line up. This should be the final consideration.
Sadly the problem isn’t with the vehicles, the vehicles are the outcome of deeper rooted problems within the whole US vehicle manufacturing industry.
FCA was first off the block with the move towards larger “trucks”, then Ford. But why?
Many allude to the fact it’s ‘murican to have large vehicles. But, is it really? Or could the basic problems confronting the US manufacturers be in the rules that apply within the US for vehicle manufacture and the US business culture/model needs an overhaul to remain competitive?
After decades of quite significant protection, the Big 3 have become more disconnected from what is going on globally. This has created a situation where the Big 3 now are totally reliant on building to suit what regulations and protection offered within the US.
The sad fact is the Big 3 were instrumental in setting up the tariff barriers and regulations thinking this offered them immunity from a competitive world.
Oddly enough the tipping point or the beginning of the end of US vehicle manufacturing dominance was the energy crissis, way back 40 years ago. This is when the shift in how and what the US manufacturers ran their business should of made the necessary changes.
As I started out with, it isn’t the models that the US manufacturers need to address first, the correct brands and models will follow once a realistic foundation is made in which to operate a globally competitive industry.
Changes are needed across the board, from looking at vehicle design and regulations, how tariffs might be artificially embracing a particular style of vehicle at the expense of other vehicle types.
The best car in East Germany was the Trabant, it must of been a world leader, just ask any East German at the time.
The US in its wisdom has created a Jurrasic Park of motor vehicles, an Easter Island. It is doomed to fail, a slow agonising demise ………… unless real action is taken to rectify the issue protecting the industry.
it’s not the cars, it’s the marketing.
promises of new product never pan out after marketing fails.
it’s the process people.
Buickman,
I don’t agree.
Marketing doesn’t fix an outdated business model.
Billy returned from the New York “Auto Show” with orders for 1108 machines, the Buick is certainly a success!
Al, it all starts when somebody sells something my friend.
“After decades of quite significant protection, the Big 3 have become more disconnected from what is going on globally. This has created a situation where the Big 3 now are totally reliant on building to suit what regulations and protection offered within the US.”
Not accurate at all. After 2008 Ford and GM significantly merged their US and European platforms and are now selling much the same product worldwide – especially Ford. Even FCA is selling identical Fiats as they do in Europe, the smaller Ram vans are the same as Fiats in Europe, etc.
dwford,
That again is discussing brands and models!
This is not the issue!
Then why did GM fail in the EU? Why is GM failing in Korea, Australia?
So, much for the US manufacturers using outside brands and models, it has failed! Even these “imported” brands and models failed within their regions.
Maybe, just maybe GM will do well in Sth America.
The US manufacturers have been failing with their global operations compared to their competitors. This is very evident.
The Asian and European manufacturers can set up shop and operate anywhere in the world, more profitably than their US peers.
The US business model is not working that well. There are several reasons.
1. The US has been dominant in business for decades, this is now challenged by newer and better structured business.
2. The US vehicle market has it’s own individual set of rules to the point where a 25% import tariff is needed. This is now the only protection the US manufacturers have to maintain their competitivness within the US …… not outside of the US.
3. US brands and models are the outcome of the business model.
Despite all this “Protection” you squawk about, the US has let quite a few foreign automakers into the US market and steal The Big Three’s lunch.
Yet despite what you claim, you can find more brands, models and segments of cars and trucks here than any other meaningful market in the world.
Any brands not represented in the US lineup probably couldn’t cut the Safety, Emissions and Lemon Laws mustard.
Personally, I believe GM would be smart to have some cars stick around to pick up the void the other two domestics are leaving. Without that, they’re simply handing money over to Honda/Toyota. Here’s my take on their line-up.
Chevrolet: Spark – Keep *maybe* – People still buy cheap city cars in urban areas, I see quite a few of these and Mirage’s around Pittsburgh.
Sonic- Kill.
Cruze – Keep Make larger and merge with Malibu. Think it has better name value than the ‘Bu and resonates better with younger buyers (sorry boomers). Possibly keep the hatchback and only make it a stupid “Active version”.
Malibu – Kill. Fleet/commercial queen. Nobody aspires to buy a Malibu lol. Merge with Cruze
Impala – Keep *maybe* I struggle with this one. It’s a good car and has a place, but is it really worth keeping around?
Buick: Ugh can we listen to Jack on this one. But until then..
Regal – Kill. Sorry it’s not a bad car, however, it doesn’t do one thing better than the competition (maybe being quieter). GS is a lame attempt to use that badge.
TourX (read: outback) – Keep. As lame as the Buick badge is nowadays, I have a feeling this has the potential to do well. Just look at the Crosstrek, Outback. Buick needs better marketing for this one.
Lacrosse – Keep, no KILL. Think it should stick around but I believe Cadillac has a better purpose for this.
Cadillac:
ATS – Kill. Too small, fun to drive, but no charm. No Luxury. No wonder my friend who bought one traded it on an Accord lol.
CTS – Keep. Go back to previous generation size. Focus on the interior more than the driving experience.
XTS – Keep. Lower price slightly to fill in for Lacrosse. Make a better no excuse FWD luxobarge. Ya know, a Caddy. Sell to my dad.
CT6 – Keep *if* you can make it a real flagship. Give it a real interior. If not make a flagship Crossover cuz that’s what the people want dammit.
Well, that’s my plan. Idk if it’s smart, but I do believe cars do still matter in GM’s lineup. Coming to you 20% soon!
GM needs to cut Chevy to 2 sedans – Cruze and Malibu, Buick to 1 sedan (they basically already have), and Cadillac to 2 – CT5 and CT6.
There’s really no point in having sedans below the Cruze – especially once you consider the massive discounts on the Cruze. No sane person would get a Sonic or Spark when you can get the same mileage and same price in a larger car.
Everyone needs to keep in mind that all these sedans getting killed by all the automakers are going to get replaced with new EV models to a certain extent. Maybe sedan styles, maybe crossover styles.
CAFE is as much a factor in Ford’s decision as the current market trends. The unrealistic mileage targets for passenger vehicles for 2025 and beyond would require significant investment in advanced materials that there is no likely return on. Better to pull the cars now than invest in a new generation and instead focus on pure electric products to fill those segments. The more lenient CAFE standards for light trucks make those products in their current form more feasible going forward together with this is what people actually want to buy.
I expect that this will provide GM with an excuse not to invest in their automotive lineup (because they think don’t have any competition). Then, when their lineup of cars tanks, they will also stop producing cars and concentrate on trucks, SUVs and CUVs.
Toyota and Honda are going to cleanup, especially when the price of gas goes up.
Small cars are overrated. How long would it really take The Big Three to design small cars and dust off assembly lines, while re-badging Mazdas, Mitsu, Isuzus, Fiats, etc for the short term?
Or they could collaborate, same boring small cars for all (different skins) like GM/Ford did their 10-speed trans
But the Big Three “failed” for lots more reason that the price of gas.
A business plan that losses money constantly (or only breaks even) for the sake of a spectacular event that may or may never happen isn’t so good a plan.
Just imagine if The Big Three could actually stockpile their billions from pickup, large SUV earnings instead burning it on smaller cars..
Perhaps buy up some small island nations, or together buyout Australia, then liquidate when/if the need arises.
Despite claims of incompetence, it seem the Big Three know exactly what they’re doing with this.
Since it’s never good idea to live outside your means, paycheck to paycheck, etc, why do we encourage huge corporations to do just that?
The merde will hit the fan if and when gasoline costs escalade.(Mistake on purpose.) I’m just saying that this will likely happen again before we go all electric Smart vehicles. And I will be as a quick minnow laughing at the whales on the road.
Idiotic decision!
When gas hits $4.00/gal. (not “if”), the stupid soccer-mommy-mobiles will have to be sent to the crusher, and the dealers will take a loss!
If anyone is paying attention at that time, provided that a Chinese manufacturer hasn’t established a beachhead in North America, I can guarantee people will be looking at country of origin! And it ain’t gonna be pretty!
The last time I had a CR-V as a loaner, the fuel mileage was still a couple behind what I could get with a car! (And no, the turbos aren’t going to help things; my guess is that the gulf between car and wagon-on-stilts will only grow. It’s physics! It is going to take more power to move a heavier object down the road!)
I thought CAFE 2025 would only usher in the advent of the turbos teaching to the test! The footprint crap is what’s created where we are today!
This genie isn’t going back into the bottle! What will stem this stupid xUV tide? Probably the arrival of GoogAmazZuckBezosAllYourLivesAreBelongToUsBichez pods!
I agree with most of this.
Short answer: Detroit built cars that sucked and they are reaping the whirlwind. No power, poor mileage, less space, no visibility comes back to bite hard.
My strategy for GM sedans would be to go back to the good ole days, really!
Position Chevrolet as a well-built first tier vehicle.
Only have the Cruze and the Malibu. Keep the designs to have family resemblance. The Cruze should be a Mini-me Malibu. Sedans should only be offered in FWD.
Retain the front engine RWD Corvette and the RWD Camaro.
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Buick sedans should be for the professional. These sedans should ALL be AWD and full size while heavily branded around AWD. The drivetrain will need some snappy AWD marketing name.
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Cadillac sedans should all be built on the existing RWD platforms with AWD only as an option.
Discontinue the XTS as not to compete with Buick.
Kill the ATS 4 -door but keep the ATS Coupe.
Continue to build the ATS coupe along-side the Camero. ONLY offer the ATS Coupe with a V8. No other engine! This will be the halo performance car to keep the magazines buzzing.
Keep the CTS as the lower end luxury car to replace the ATS 4-door. Offer only a 4 or 6 cylinder for the CTS and LOWER the price.
Keep the CT6 as the luxury high end halo car. It should only have a V8.
Cadillac should get the mid-engine Corvette, renamed of course.
Move the New York office back to Detroit and hire me!
I see many comments on here lashing out at domestic CEOs for killing cars. Cars are not selling. CUVs and trucks are.
Thing is, just as GM can take a car platform and turn it into a successful CUV, couldn’t they just as easily (and with the same minimal development costs) take a platform meant for a random CUV and build cars on it, should they return to popularity with consumers?
That to me is the beauty of building versatile platforms that can be interchangeable between sedans/CUVs.