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The Current State of the US Auto Market

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  • berriberri Posts: 3,997
    In the 50's and 60's Buick dealers often sold Opel as well as Buick. Might make more sense to sell some of this Opel stuff as an Opel rather than downgrading the near lux image they have tried to give the Buick line. I can only see things like this tiny coupe and Encore bringing Buick's consumer image lower - contrary to what I thought GM's goal was with Buick going more upscale???
  • Buick *is* upscale in many foreign markets. Foreign buyers have no idea of Buick's history or reputation.
  • berriberri Posts: 3,997
    But the bulk of the profits still come from the NA marketplace.
  • tlongtlong CaliforniaPosts: 4,695
    I find the engine in my son's 2007 Cobalt to be smoother than the turbo 4 in my cousin's RDX. .

    Well I hope it's smoother than the turbo 4 in the Cruze I rented recently. Talk about a growler.
  • uplanderguyuplanderguy Kent, OHPosts: 7,325
    edited September 2013
    The 2.2 in my Cobalt is literally so smooth at idle, one cannot tell it is running. That is no joke.

    So it was a Turbo you rented? I seem to remember correspondence here where you weren't sure it was a 1.4 or 1.8, but I don't recall for sure.
  • imidazol97imidazol97 Crossroads of America: I70 & I75Posts: 17,690
    edited September 2013
    > you weren't sure it was a 1.4 or 1.8,

    Odd, how if an engine makes noise while someone's driving it in a US branded car that is awful. If a Honda or toyo makes noise while being driven in the same way, it's quality. Gotta love 'em. God bless them.

    I have to admit that my 3800's make noise while running. Especially if driven more aggressively than I usually need to accelerate, I can actually hear the exhaust. However, I could hear the neighbor's Acura(s) when he would acclerate gently down the road from his driveway, and those are V6's. Of course, Honda's having some troubles with their VCM so maybe that's the excuse.

    This message has been approved.

  • robr2robr2 BostonPosts: 7,597
    But the bulk of the profits still come from the NA marketplace.

    I'll disagree.

    Buick sells about 2.5 times the number of vehicles in China than in the North America.

    August 2013:

    North America: 27K units
    China: 68K units
  • berriberri Posts: 3,997
    But are you sure about the profit margins? New plants over there, much lower selling prices> I'm sure their cost of goods sold is lower in China, but it still has to absorb corporate overhead and the Chinese labor rates have been sky rocketing lately.

    But the biggest risk I think is when China steals their technology, plant operational capabilities and processes, and drawings. Then the state will facilitate a Chinese firm to build similar product cheaper with gov subsidies and eventually erode Buick over there. China may act capitalist, but the gov is Communist which means in economics they are still thugs. By the way, where is the Chinese bailout money for GM?
  • robr2robr2 BostonPosts: 7,597
    But are you sure about the profit margins?

    No I'm not and since GM doesn't tell us, we have to make some assumptions. I can make an educated guess that when one is selling 2.5 times more product, it takes quite a bit of additional cost to reduce GP that much.

    The Buck Excelle is the top selling car in China - it's the Verano here. They sold 250K of them in 2012. The US Equivilant is the Verano and they are on target to sell 50K this year.

    Let's assume 10% gross profit.

    Excelle: 250K x 16K base price x 10% = $400 million.
    Verano: 50K x 24K base price x 10% = $120 million.

    It may not be perfect, but it's an educated guess.

    But the biggest risk I think is when China steals their technology, plant operational capabilities and processes, and drawings. Then the state will facilitate a Chinese firm to build similar product cheaper with gov subsidies and eventually erode Buick over there.

    Yes that happens in China but the one thing they can't copy is the Buick brand. It's the top selling auto company in China and is popular among the affluent and upwardly mobile Chinese. Keep in mind that the Chinese favor American brands often eschewing cheaper Chinese brands for names such as Ethan Allen, Apple and Pampers.
  • dieselonedieselone Posts: 5,627
    "I have to admit that my 3800's make noise while running. Especially if driven more aggressively than I usually need to accelerate, I can actually hear the exhaust. However, I could hear the neighbor's Acura(s) when he would acclerate gently down the road from his driveway, and those are V6's. Of course, Honda's having some troubles with their VCM so maybe that's the excuse. "

    The 3800 we had sounded and felt crude compared to any Honda, Toyota, or even the the 3.5 Duratec in the Taurus.

    When I ride/drive in any Honda/toyoa v6 vehicle, I always notice right away how much smoother they are comparedthan the domestic v6's I've sampled. My MIL's Camry v6 with 200k miles is noticeably smoother and quieter than my wife's Taurus. Same goes for my dad's v6 Accord. I now some people aren't as sensitive to those areas as I am and I realize that alone don't make the asian makes infinitely better. As I've posted a few times, my dad's '09 Accord V6 has been torn apart twice of VCM oil consumption issues.

    What's weird is the 3.5 in my wife's '13 Taurus doesn't sound as refined as the one in the '11. Particularly at idle, it's not nearly as quiet. I know Ford added independent variable valve timing on the intake and exhaust cams. Which ironically make the engine feel a little more peaky. It seems a bit slower at lower rpm, but once it revs past 4k it will pull pretty hard.
  • xrunner2xrunner2 Posts: 3,062
    There is absolutely no question but that, overall, German and Japanese auto manufacturers have the smoothest and most sophisticated engines. Probably now for 25-30 years. American brands have been playing catch up.
  • berriberri Posts: 3,997
    I know you can play all kinds of accounting games based on taxes, etc. But I doubt that Chinese vehicles have the same profit margin rate as domestic ones primarily because they are still absorbing the higher fixed costs from the relatively new plants they are being built in. The other issue that comes into play is product mix. For example, Buick is selling a lot of high margin Enclaves here that I'm sure bring in substantially more profit margin than a Verano. I do agree about the current prestige factor of a Buick in China, but remember there was a time when brands like Buick and Cadillac had prestige in the US too. I think some brands like BMW may already be cutting into Buick's prestige factor over there as well.
  • tlongtlong CaliforniaPosts: 4,695
    So it was a Turbo you rented? I seem to remember correspondence here where you weren't sure it was a 1.4 or 1.8, but I don't recall for sure.

    I had taken a picture with a coworker which I saw later and the car was in the background and the Cobalt was an LT. I believe that's a 1.4 turbo, correct me if I'm wrong.
  • tlongtlong CaliforniaPosts: 4,695
    Odd, how if an engine makes noise while someone's driving it in a US branded car that is awful. If a Honda or toyo makes noise while being driven in the same way, it's quality. Gotta love 'em. God bless them.

    You're conveniently pretending that there is no difference. I have had a VW, Honda, and Mazda with 4 cyls that were much less harsh than the Cruze I'm comparing to. As an aside, I just had an Altima rental (4 cyl I presume) and it was fairly bad, too.
  • Well there is 'engine song" and "miserable thrashing sounds"---however, you are right in that this is a very subjective type of rating. Porsches and Ferraris are noisy, for instance.
  • Michaell@EdmundsMichaell@Edmunds ColoradoPosts: 1,082
    I believe that's a 1.4 turbo, correct me if I'm wrong.

    The Cruze LS has the 1.8L NA engine; the LT1, LT2 and LTZ all have the 1.4L turbo.

    I've got the cousin to uplanders Cobalt - Saturn ION - with the 2.2L Ecotec. Good engine, reasonably quiet. Getting 25-27MPG on mostly city driving.

    95K on it and going strong.

    michaell@edmunds.com

    Moderator, Prices Paid and Leasing Experiences

    2013 Hyundai Elantra GT / 2010 Mazda CX-7 GT / 2014 MINI Countryman S ALL4

  • robr2robr2 BostonPosts: 7,597
    edited September 2013
    I know you can play all kinds of accounting games based on taxes, etc.

    Trying to do the best I can making educated assumptions. If you have more specific data, please share. China outsells NA by 2.5 times. In order for North America to out earn China would mean that that the Chinese models have to be 60% less profitable. I highly doubt that is the case.

    For example, Buick is selling a lot of high margin Enclaves here that I'm sure bring in substantially more profit margin than a Verano.

    And in China Buick is selling a lot of high margin GL8 mini-vans that high powered business executives prefer to drive. Those retail for $45-60K.

    I do agree about the current prestige factor of a Buick in China, but remember there was a time when brands like Buick and Cadillac had prestige in the US too. I think some brands like BMW may already be cutting into Buick's prestige factor over there as well.

    Buick is playing in the premium segment and targets upwardly mobile professionals. BMW is in the luxury market which is where Cadillac is trying to play - and not doing too well. BMW does well with the 5 and 7 series as their target customer has a chauffeur.
  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,916
    high powered business executives

    Gee, I'd fit right in. I should apply for one of those "token" American jobs to lend credence to some GM supplier over there.
  • anythngbutgmanythngbutgm Posts: 4,158
    edited September 2013
    "Odd, how if an engine makes noise while someone's driving it in a US branded car that is awful. If a Honda or toyo makes noise while being driven in the same way, it's quality. Gotta love 'em. God bless them"

    The only thing "odd" here is your generalization...

    By your logic the sounds made by a Mack truck and a Yamaha motorcycle are equally pleasing/displeasing?

    Try revving out a J-series Honda V6 sometime, it's smooth, refined and linear and doesn't sound like it's going to explode.

    http://www.youtube.com/watch?v=IVA1zuQ-IgA

    http://www.youtube.com/watch?v=RXNOFmBCy7Y

    Conversely, "Try" and rev out a 3800 for instance (I mean "try" because anything over 4 grand sounds like a cement mixer with marbles in it IMO).

    http://www.youtube.com/watch?v=cjOAQ5rijqg

    http://www.youtube.com/watch?v=FapMOd27_0k

    And add a Supercharger?

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