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The Current State of the US Auto Market

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  • fintailfintail Posts: 33,781
    edited November 2013
    I think the biggest impact to MB was that Lexus forced lower profit margins. MBs, especially in the upper range, have seen pretty low price inflation over the past 20 years. A 30K 190E from 1990 is a 36K C in 2014, a 90K 500SEL from 1992 is a 105K S550 for 2014. Not bad. I don't think Lexus forced better quality - heck, MBs got worse not long after Lexus came around.

    And still, Lexus has made more than one mis-step (get really boring, then become reactionary and add bizarre styling, which isn't setting sales afire), and continues to be more of a North American idea (Luxury EXperiment for the US) than elsewhere, while the others still sell by the boatload worldwide.
  • berriberri Posts: 4,201
    I think the clueless suits and the UAW, along with many politician types thought that forcing Japan to build here would ruin them. Forget that you preached about being patriotic by buying cars assembled in America, or that transplants would reduce Japan's transportation costs and allow them to be less impacted by currency fluctuations. Sometimes I wonder if the ivy league is better at teaching arrogance than common sense?
  • tlongtlong CaliforniaPosts: 4,754
    Having grown up and lived on and off in the Midwest, I'm going to play devil's advocate on this topic with my perception of why Detroit hung on longer in the Midwest (besides the D3 and vendor factories). I'm not saying I'm right, but I think it was more a supply issue than a demand one.

    Well that's a bit inconsistent with the stories I heard. I had a good friend in the late '70's whose family was from MI, but now lived in southern California. They tended to drive Oldsmobiles, but then decided to get a VW Super Beetle for him when he graduated from HS. My friend went back to MI to visit grandma every year or so. I remember him telling me that if he had his VW in Michigan it would probably be keyed or have its tires slashed if he was parked in a large parking lot at a place like a mall or something (his grandparents lived in Dearborn I believe). I was incredulous, as being from CA I couldn't fathom such behavior.
  • uplanderguyuplanderguy Kent, OHPosts: 7,494
    I'm not being a wise guy, but "unadjusted history"? That's a new one. History is history. We shouldn't "adjust" it. ;)
  • uplanderguyuplanderguy Kent, OHPosts: 7,494
    "(just look at the SIZE of American cars from 1979-1985, and plot that size and weight against a graph of fuel prices 1979-1985. What do you see? You see evidence that D3 didn't even care."

    Huh?

    You can say the domestic makers didn't do them well, but there wasn't a single domestic automobile in those years that wasn't smaller and lighter than the cars they replaced.

    First domestic front-drive compacts out in '78 (Chrysler) and GM ('79, as '80 models), also.
  • circlewcirclew Posts: 8,380
    edited November 2013
    Comical. I'm sure you know Berri meant this:

    "Many contract audit applications of regression analysis include variables which are affected by changes in wage and price levels. When economic changes have significantly affected any of the variables during the period covered by the historical data, the regression analysis applied to the raw data will not produce reliable results. In such cases it is necessary to (1) include a measure of economic change as a separate explanatory variable in multiple regression or (2) adjust the data to eliminate the effects of the economic changes."

    But of course, when it comes to GM, nothing ever goes wrong. ;)

    Right?:)
  • circlewcirclew Posts: 8,380
    edited November 2013
    Only in the 1970s, after the first oil shock, did faults start to become visible. The finned and chromed V8-powered monsters beloved of Americans were replaced by dumpy, front-wheel-drive boxes designed to meet new rules (known as CAFE standards) limiting the average fuel economy of carmakers' fleets and to compete with Japanese imports. As well as being dull to look at, the new cars were less reliable than equivalent Japanese models.

    By the early 1980s it had begun to dawn on GM that the Japanese could not only make better cars but also do so far more efficiently. A joint venture with Toyota to manufacture cars in California was an eye-opener. It convinced GM's management that “lean” manufacturing was of the highest importance. Unfortunately, that meant still less attention being paid to the quality of the cars GM was turning out. Most were indistinguishable, badge-engineered nonentities. As the appeal of its products sank, so did the prices GM could ask. New ways had to be found to cut costs further, making the cars still less attractive to buyers.

    Respite came with the decline in oil prices from the late 1980s and an anomaly of the CAFE regulations that allowed passenger vehicles classed as light trucks a much slacker standard. Rather than invest in low-margin cars, GM and the two other Detroit firms concentrated on building profitable pickups and SUVs. After recovering from losses of over $30 billion in the early 1990s, the company was in trouble again at the beginning of the next decade. Its market share had been steadily falling (see chart 2), while higher interest rates and an economic downturn led to a pensions and benefits crisis.


    History is History. You can't change it! :shades:
  • circlewcirclew Posts: 8,380
    image

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    These new cars and light trucks could not arrive too soon. With the exception of 2011 during which the company's U.S. market share edged up .4%, GM has bled share every year since (at least) 2007. And in 2012, this trend accelerated with the company's share sliding 1.7 points to 17.90*, its lowest level since the 1920s. If anything is going to stop GM's share decline, this impressive array of all-new or redesigned products should do it. In fact, GM has refrained from taking the pre-recession route of heaping on incentives to buy business, hoping instead that its redesigned and all-new products on their own will resonate sufficiently with the consumer to boost sales and share. Polk's U.S. Light Vehicle Forecast indicates that GM's share indeed will rise slightly in 2013 to the 18.0 – 18.5% range.
  • circlewcirclew Posts: 8,380
    edited November 2013
    esla is top seller in nation's wealthiest enclaves

    These sales aren't to the"Sheeple" some on this forum have labeled, are they?

    Just askin' 'cause I really don't know!
  • uplanderguyuplanderguy Kent, OHPosts: 7,494
    Somehow, I'm now thinking of Cliff Clavin on 'Cheers'. ;)
  • uplanderguyuplanderguy Kent, OHPosts: 7,494
    Back to the original statement: I seriously do not remember anyone making public statements that GM was doomed to failure, in the '70's.
  • circlewcirclew Posts: 8,380
    Somehow, I'm thinking of Frank Slade from "Scent of a Woman". :)
  • steverstever Viva Las CrucesPosts: 40,784
    Now find us a graph showing GM's profit the last decade or so.

    All this GM ragging is pretty tiring - the US auto market has a few other players you know.

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  • berriberri Posts: 4,201
    "his VW in Michigan it would probably be keyed or have its tires slashed if he was parked"

    I'd heard of that around some parts of Chicago, but I don't think it was really all that prevalent there. Detroit is it's own story. I haven't been into there for probably 4 or 5 years, but last time there I was reading a local paper in the hotel lobby waiting for the shuttle and actually saw an article that keying cars was still going on there. I was a bit surprised because there are more than a few imports there, especially in the suburbs. Detroit, as well as other auto plant towns are kind of unique though because so many people in those areas are eligible for A or X plan pricing that it can distort the ownership breakdown statistics.
  • berriberri Posts: 4,201
    "All this GM ragging is pretty tiring - the US auto market has a few other players you know."

    You mean like Ford ecoboost and new Fiesta transmissions?
  • dieselonedieselone Posts: 5,650
    edited November 2013
    " I remember him telling me that if he had his VW in Michigan it would probably be keyed or have its tires slashed if he was parked in a large parking lot at a place like a mall or something (his grandparents lived in Dearborn I believe). I was incredulous, as being from CA I couldn't fathom such behavior."

    There is some truth to that during those times. I grew up around the steel mills and I remember seeing union members on TV taking sledge hammers to Toyotas to make a point in the late 70's and early 80's.

    I remember when my aunt and uncle bought a Honda in the late 80's. My grandpa wouldn't let them park it in his driveway. Now my dad and all his siblings drive foreign makes.

    My BIL works for a auto supplier in Grand Rapids, MI and he drives a Tundra and my SIL drives an odyssey and it's not a big deal anymore.
  • dieselonedieselone Posts: 5,650
    "For several years now, I've heard a saying that goes something like "a 3 year old car today is as good or better than a new car was 10 years ago". I think that saying was especially true 10 or 15 years ago."

    Or 30. My aunt ordered a new '83 Mustang and it over heated and blew a head gasket on the way home from the dealer. IIRC, it was a casting issue in either the head or block. Anyway, it needed a new engine after 7 miles.

    My grandpa used to be a Ford salesman and I remember many of his demos had issues in the early 80's before he finally retired. Ford's in that era were really junk, probably why Ford nearly escaped bankruptcy back then.
  • dieselonedieselone Posts: 5,650
    "You mean like Ford ecoboost and new Fiesta transmissions?"

    I know a guy that has a late model Focus and another with a Cruze Eco. Both have had trans problems. The Focus needed a clutch assembly replaced in the auto dual clutch trans and the Cruze Eco needed a master cylinder and something else in the hydraulics in the clutch replaced. It actually road on a hook to the dealer due to the clutch not disengaging.
  • berriberri Posts: 4,201
    I think Ford has been getting sort of a free ride in the press because they avoided the bailouts. The new management team did a great job with that, but I'm not sure they are fixing engineering and purchasing deficiencies at Ford. Looks like GM kind of kicked Ford's [non-permissible content removed] in the latest CR surveys and reviews.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,013
    Okay so they replaced big elephants by slightly smaller elephants that ran worse----agreed.

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  • xrunner2xrunner2 Posts: 3,062
    >>>>>>Can you just imagine what expensive piles of crap American cars would be today if the Japanese hadn't come over and set up assembly plants in the States? Duopoly vs. competition!>>>>>>

    Exactly. If not for the Japanese and their superior products starting in the 80's, the big 3 would have continued to build the same crap they offered us in the 70's. The Japanese forced the big 3 to improve everything about how they produce vehicles. From design and engineering to procurement of parts, manufacturing and assembly.
  • dieselonedieselone Posts: 5,650
    "I think Ford has been getting sort of a free ride in the press because they avoided the bailouts. The new management team did a great job with that, but I'm not sure they are fixing engineering and purchasing deficiencies at Ford. Looks like GM kind of kicked Ford's [non-permissible content removed] in the latest CR surveys and reviews. "

    Ford did pursue more advanced technology in high volume vehicles. When you look at where they put technology with Sync and My Ford Touch, DCT in the Focus and Fiesta, direct injection and turbos in several vehicles and in the F series. Plus they did all of the above in a short amount of time and the quality surveys show the effects of Ford possibly biting off more than they could chew.
  • dieselonedieselone Posts: 5,650
    edited November 2013
    "Exactly. If not for the Japanese and their superior products starting in the 80's, the big 3 would have continued to build the same crap they offered us in the 70's. "

    I agree, competition is a good thing and I don't doubt for a second the D3 would have kept building garbage. Just look at how much D3 pickups have improved since Nissan introduced the Titan in '04 and Toyota's Tundra in '07. Sure they never threatened in the sales race, but in many ways, those two trucks were better in key areas at the time of their introductions. Looking at what the D3 offers today and it's obvious they are serious about keeping the lead in both sales, but in offering truly competitive trucks.
  • xrunner2xrunner2 Posts: 3,062
    >>>>>>I remember the first time I took apart an engine on a Toyota pickup truck. The quality of the castings and the precision of the engine just amazed me, given the cost of the truck. Also it felt like the future of engine tech, not the past of it.>>>>>

    How about other Japanese brands?
  • dieselonedieselone Posts: 5,650
    "I remember the first time I took apart an engine on a Toyota pickup truck. The quality of the castings and the precision of the engine just amazed me, given the cost of the truck. Also it felt like the future of engine tech, not the past of it."

    I don't doubt that. Toyota's 5.7 v8 that was introduced in '07 is still competitive with the latest offerings from Ford, Ram, and GM. Back then it was way ahead.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,013
    The other Japanese brands varied back then, as I recall. Datsun made the 240Z of course, which I personally thought, for the money, was about 10X better made and engineered than anything British or the price-equivalent Porsche 914. (Americans didn't build 'sports cars' back then unless you wanted to include the rather bestial Corvette, which cost considerably more).

    Subaru wasn't much back then, rather tinny and crude but they ran well.

    Mazda had the rotary RX-3 about the same time as the Z, and I remember thinking that the RX-3 station wagon was a beautifully made car for the money...too bad the engines were such turkeys.

    Toyota also had the little Corolla, which was pretty cheap and flimsy but a very tough little car.

    Honda was still in "tiny car land" but again, these cars ran very well and foreshadowed the success of the later Accord.

    This was also the time when Honda had their new motorcycle, the 750-4, which destroyed the British motorcycle industry in about 3 years flat, and made a Harley look like a quaint throwback to 1920.

    But yeah, Japanese sheet metal and interiors were 'built to a price" (except for the Mazda, which I thought was better), and I was not impressed by build quality in general, but they ran much better than American cars, in my recollection, and of course, got way better MPG.

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  • tlongtlong CaliforniaPosts: 4,754
    Honestly, for GM the most important metric is profitability. Apple is a relatively small share of the smartphone market worldwide, but they vacuum up most of the profits. As long as GM is profitable, it doesn't really matter (within reason) what their market share is.
  • fintailfintail Posts: 33,781
    Not to mention the bad designs and wheezy engines. Pretty sad when a Tempo would be an improvement. My mom's big 70s T-Bird only made it a little over 10 years - and that was just accepted with a shrug by my parents. Today, that would be intolerable. My dad's 85 S10 Blazer was also really iffy by its 10th birthday. The good old days weren't always so good - for cars anyway, this isn't a bad time.
  • fintailfintail Posts: 33,781
    I think with few exceptions, the modern cookie cutter MBA clone is a one-trick pony, focusing on cutting labor costs at the expense of everything else. I don't know if the big business schools teach anything about long term consequences. The ones hired by the D3 were no better.
  • greg128greg128 Posts: 345
    "Toyota's 5.7 v8 that was introduced in '07 is still competitive"

    It gets terrible gas mileage and I would't trust their rust-prone flimsy frames that may or may not have been fixed.
This discussion has been closed.