GM News, New Models and Market Share

andre1969 · February 2013

Gotta duck to get in that back seat, and the seats aren't very good.

LOL, that's me with most cars! The one thing the Dart has going, for me at least, is the front seat. It has, by far, the most legroom of any compact car in my recent memory...at least in terms of how well I fit. Published specs might disagree with me. However, I'm basing that on the Dart I sat in a few months ago at the Dodge dealer, as the one I sat in at the DC auto show had the power disconnected, so I couldn't adjust the seat.

I think its biggest problem is that fuel economy really isn't all that astounding. With the 2.0/automatic, which will probably be the most common engine choice, it's rated 24/34. And for a compact car, that's just not very good.

Chevy's somewhat guilty of this phenomenon as well, as their Cruze 1.8/automatic, which again is probably the most common version, is rated 22/35. Looks like Ford did their homework though, as the Focus 2.0/auto gets 27/38.

busiris · February 2013

Subaru, BMW, and Hyundai/Kia have the shortest supply and simply cannot build their cars fast enough. That's not a positive - they lack capacity, it's a missed opportunity.

Financially speaking, I agree. Lack of product = missed sales and less revenue.

OTOH, keeping a tight control over production in order to control quality, thereby limiting production (costing immediate sales) is taking the long view, which is what so many often complain about the Big-3 NOT doing.

This same scenario played out in the early 1990's at Harley Davidson. After the introduction of the new "evolution" engine and redesigned bikes, the factory simply couldn't meet customer demand for several years. Having been through the lousy quality wringer in the 1970-80's, Harley management understood the value of quality as simply a cost of business, and left short-term revenue on the table while a taking the long view. It was a huge success for the company, yet there were those screaming for a rapid expansion in production.

IMO, if product shortage is due to keeping the quality (as well as the perception of quality) high, it's a small price to pay, as long as production is gradually being increased.

Look up a guy called "Chainsaw Al" and see what he did to Sunbeam appliances. That's a worst case scenario of promoting revenue above all else.

bpizzuti · February 2013

I've said this before, but as a customer, this doesn't bother me.

If you prefer GM vehicles it should concern you a little, if GM can't make a profit they won't be around. Oh wait....

This is why he doesn't have a problem with it and we do. We basically have to subsidize his favorite cars and company because they don't know how to operate profitably. But to let them go bankrupt is somehow a violation of the American Way.

uplanderguy · February 2013

Sure not like a foreign manufacturer hasn't ever been subsidized, either here or in their home country, n'est-ce pas?

I've said it before, I'll say it again....I am positively stupefied at how much energy is exerted on a GM board by people who hate GM.

ateixeira · February 2013

There are economies of scale as production increases, though. The incremental cost of producing one more car gets lower and lower. The overhead is fixed, but production costs are not.

dieselone · February 2013

Chevy's somewhat guilty of this phenomenon as well, as their Cruze 1.8/automatic, which again is probably the most common version, is rated 22/35. Looks like Ford did their homework though, as the Focus 2.0/auto gets 27/38.

I'm glad Ford didn't waste their time on a base/premium engine option in the Focus.

GM should have just made one engine available for the Cruze. No other compact I know have has two engines available unless it's for a high performance trim. I'd be curious to see the break down between the 1.8 and 1.4T.

busiris · February 2013

There are economies of scale as production increases, though. The incremental cost of producing one more car gets lower and lower. The overhead is fixed, but production costs are not.

Yes, up to a point.

A simple example...

Lets say I'm in the overseas shipping business. I have a ship that will carry up to a thousand units (cars, bales of cotton, whatever). My fixed cost is the ship itself, along with the crew. My variable costs are things such as fuel.

The ideal situation is for me to carry 1000 units during each and every crossing. As I approach the magic number of 1000, my cost per unit drop.

Once I have to transport unit number 1001, I've got a problem.

So, its not a linear decrease, although sections of the decrease have linear characteristics.

Overall, as you approach infinity, I do agree with your premise.

dieselone · February 2013

There are economies of scale as production increases, though.

True, but if you build more than will sell, you have to either cut production or lower the price to move excess inventory which likely will negate any savings of extra production beyond demand.

dieselone · February 2013

I've said it before, I'll say it again....I am positively stupefied at how much energy is exerted on a GM board by people who hate GM.

I could go on and on about Ford too, but that forum is dead. Apparently no one cares about Ford.

I don't exert much energy, my negativity towards GM just comes naturally. It's almost therapeutic;)

uplanderguy · February 2013

I'd be surprised if the 1.8 was the most popular engine in the Cruze. It's only in the LS. I see mostly LT's and Eco's, more than LS's 'out there' and on dealers' lots--unscientifically though.

dieselone · February 2013

I see mostly LT's and Eco's, more than LS's 'out there' and on dealers' lots--unscientifically though.

Is the 1.4T standard in the LT trim and up? Looking at them used, it seems the LT is the most common.

uplanderguy · February 2013

To be honest, I haven't looked at Cruzes for a while but that's what I remember when they came out. Only the cheapest LS trim level had the 1.8 and all others had the turbo.

andre1969 · February 2013

I just did an unscientific search using the inventory of a local dealer (www.fitzmall.com). Looks like they have 43 Cruzes in stock, but only 14 are LS models.

So, it looks like GM is doing a pretty good job of luring in buyers who want something more than just a cheap, basic compact. That should help their profit margins.

anythngbutgm · February 2013

Is the Turbo the one that was recalled for catching fire?

I was talking with one of my co-workers about his and he has the base model without the Turbo. Never got a recall notice so that's why I am asking...

He likes it but I guess the seats are awful. But no issues at 35k.

Edit: looks like my answere is yes. The 1.4T is built in Austria and the recall was for the same engine all over the world, no mention of the 1.8... Didn't realize the Tranny came from Mexico? Only 45% US content...

tlong · February 2013

Sure not like a foreign manufacturer hasn't ever been subsidized, either here or in their home country, n'est-ce pas?

And two wrongs make a right? You don't really address the point of the original post.

I also think using the word "hate" for people who criticize is inflammatory, as I doubt many of us hate GM. We may be here because we'd like them to improve. Not something you'd do if you hated them.

imidazol97 · February 2013

>I am positively stupefied at how much energy is exerted on a GM board by people who hate GM.

The hypocrisy by some as to how foreign makes ~~were~~ are subsidized in various ways but that was okay, but because GM was helped by the administration that's not okay. Wow. Just wow.

Further, someone thought it's not okay to have posts here about another company's recalls, let's say toyota for example, but then it's okay for all the kvetching about GM and okay for people to post how much they love another favorite (insert name) car company over GM here on the GM discussion? Wow. Just wow.

tlong · February 2013

The hypocrisy by some as to how foreign makes were are subsidized in various ways but that was okay, but because GM was helped by the administration that's not okay. Wow. Just wow.

I don't get the use of the word "hypocrisy" and the lack of understanding of some basic ideas.

If my kid is cheating at school, I'm going to rag on him about it. When he states "But other kids cheat, too", I'm going to say "I don't care about the other kids, I don't want YOU to cheat." Whereas in this "surprise" from some posters, they would obviously say to their kids "OK, then go ahead and keep on cheating."

Wow. Just wow. :surprise:

bpizzuti · February 2013

Sure not like a foreign manufacturer hasn't ever been subsidized, either here or in their home country, n'est-ce pas?

I've said it before, I'll say it again....I am positively stupefied at how much energy is exerted on a GM board by people who hate GM.

So two wrongs makes it OK to be as bad as them?

I don't hate GM at all. I dislike the government for giving them a taxpayer-sponsored "Get out of bankruptcy free" card. I dislike some of their current cars, and the decisions they've made pre and post. But frankly, I criticize because I want them to know where they're screwing up so they can improve.

On the other hand, you want to give them a free pass because they're GM.

busiris · February 2013

If my kid is cheating at school, I'm going to rag on him about it. When he states "But other kids cheat, too", I'm going to say "I don't care about the other kids, I don't want YOU to cheat." Whereas in this "surprise" from some posters, they would obviously say to their kids "OK, then go ahead and keep on cheating."

Too bad Lance Armstrong didn't have parents like you.

uplanderguy · February 2013

I don't give them a free pass, but I dislike seeing errors of fact on this board, one or two or so of which you have posted. I'm also not a fan of leaving relevant information out of a discussion, but at least that's not posting just-plain wrong things.

Guys like you give the other guys a free pass by saying things like, "Geez, look at GM's average owner age"--when it's the same or extremely close to all the other big manufacturers. Come on. Your high school debate teacher would shake his or her head at that one (I know that particular example wasn't you). That is so typical of the endless posts on this board.

Please don't make me itemize the list of factually incorrect things I've seen on this board again.

ateixeira · February 2013

But GM probably has labor agreements and in some cases may be paying people not to work. A production stoppage may not save nearly as much as we think.

bpizzuti · February 2013

Please don't make me itemize the list of factually incorrect things I've seen on this board again.

Oh, no, please feel free to do so. :shades:

fintail · February 2013

But at the same time, if your kid falls behind in part due to the others cheating (and many of his own bad decisions, of course), and ends up the lowest ranked of his peers, then passed up for advancement or scholarship, how does that play out? And when your own taxes subsidize the cheating perpetrated by others? That's how it works in regards to cheating in the auto industry.

Two wrongs don't make a right, but sometimes, an additional wrong is needed to simply keep afloat. Either that, or playing field leveling trade policies, which make those who believe the lie of "free trade" scream and cry. Many of these screamers also embrace dirty tax havens and idiotic defective trickle down style theory.

We can either assess equalizing and even punitive measures against those who cheat and wish to have access to our markets, or we can cheat to even things up a little. No other way about it.

ateixeira · February 2013

Simple punitive measure - tax the cheaters so as to level the playing field.

Example: if China doesn't pay for health insurance for their laborers, tax imports to even out what it would cost if they did.

bpizzuti · February 2013

The difference is that the Asians currently being subsidized in Asia are not being subsidized because they can't sell enough cars. Or because they can't figure out how to make a profit. Honda and Toyota do that quite well, as does Hyundai.

GM forgot how to make money, and for that they demanded subsidies or they would take down the entire auto industry. At least that's how it looked to some.

busiris · February 2013

But GM probably has labor agreements and in some cases may be paying people not to work. A production stoppage may not save nearly as much as we think.

I'm sure you're right. Few things are ever simply black or white, although quite a few seem to see the world in those 2 shades only.

There are probably a hosts of qualifiers, including tax incentive clawbacks for idled plants, etc.

busiris · February 2013

Simple punitive measure - tax the cheaters so as to level the playing field.

Example: if China doesn't pay for health insurance for their laborers, tax imports to even out what it would cost if they did.

Excellent idea... Then, take that money and use it to pay for the uninsured folks in the US.

You oughta run for elected office!

LOL!

fintail · February 2013

The reason alone doesn't really matter, the mere existence of the subsidy does too.

I suppose sending Japan and South Korea bills for military presence in the region, keeping the monster to the south at bay, would change this drastically.

Not long ago Kia was dead man walking, and the Hyundai group had some troubles too - but their feds stepped in even moreso than usual (and they have huge governmental involvement through good times and bad) yet nobody says a bad word.

fintail · February 2013

Exactly. Also compensate for Chinese environmental abuse.

And if an automaker receives gifts from their respective government, that can be compensated for as well. Either that, or we have to play the same game. There's no other solution.

andres3 · February 2013

I think the Dart is sharp looking on the exterior (see a Ralleye) version parked near me at work.

The Dart would be a winner if they had halfway decent build and design quality. Knowing Chrysler as well as I do, I know that's a virtual impossibility. But a Dart with a Civic SI power train and AC would be cool. At least then, those expensive parts wouldn't break down so fast.

Also, they probably overprice them. Frankly, they should just give them away for free to former Neon owners as an apology.

dieselone · February 2013

Not long ago Kia was dead man walking, and the Hyundai group had some troubles too - but their feds stepped in even moreso than usual (and they have huge governmental involvement through good times and bad) yet nobody says a bad word.

From what I remember Hyundai auto acquired Kia after Kia filed for bankruptcy. IIRC, Hyundai Auto was profitable when the Chaebol collapsed and was only like 30% of the total business. I believe it was the construction division that took Hyundai down, that and the business/political relationships in Korea at the time. Hyundai was split up after the Asian financial crisis.

So no, I really don't have any thing bad to say about the deal. That was Korea's business not mine.

uplanderguy · February 2013

The Dart would be a winner if they had halfway decent build and design quality. Knowing Chrysler as well as I do, I know that's a virtual impossibility

And you're basing this on.....what? Oh, that's right, a '95 Neon.

uplanderguy · February 2013

So no, I really don't have any thing bad to say about the deal. That was Korea's business not mine.

"heh, not my problem!"

andres3 · February 2013

. I think their reliability has improved overall but quality and fit-n-finish still leave a lot to be desired.

But doesn't seeing obvious quality control gaps and shortcomings in a car lead you (logically I say) to thinking and at least perceiving that perhaps other shortcuts were taken under the hood, inside the wheels, and other unseen places?

If visible portions look cheap, I shudder to think what cost savings measures were taken where the eye can't see normally.

dieselone · February 2013

It appears Korea fixed many of the problems by breaking up institutions that were to large. Maybe we can learn something from them;)

greg128 · February 2013

Guys like you give the other guys a free pass by saying things like, "Geez, look at GM's average owner age"--when it's the same or extremely close to all the other big manufacturers.

That applies to recent reliability ratings of GM cars compared to others. My family and myself own GM cars that have been very reliable and we are very happy with our purchases.

andres3 · February 2013

I've said it before, I'll say it again....I am positively stupefied at how much energy is exerted on a GM board by people who hate GM.

The hate could have been avoided if the 40% that were pro-bailout offered to pay for 100% of the costs, and leave the rest of us 60% that were against the bailouts with a tax refund or rebate. How the minority convinced 2 Presidents from 2 parties to go against the majority is beyond me. I will say, it tends to show that there is no difference between the two parties anymore, or the differences are comical and minor in relation to the big picture.

Pro GM and GM fanboy people should offer to subsidize GM on their own. Those against GM should be able to UNCHECK that tax box on their tax forms this Spring.

uplanderguy · February 2013

It is my understanding that "anything"'s domestic content percentage, and also engine assembly point, was only for the earliest Cruzes, but I will have to look and verify when I take my car in for an oil change this weekend.

What do you drive, anything? I drive a Cobalt and my wife drives an '11 Malibu. It'd be interesting to see about recalls on what you drive, but I honestly don't remember you saying.

I do remember you saying that one could absolutely not get factory cruise control in a Cruze though.

andres3 · February 2013

The small car market can be won with good product. Since a small car is often one's first purchase, there are new customers to be won over.

This works well, when for example, Chrysler has a customer they can never win back (short of a full refund) like me. I just know all too well and first hand what they are capable of (the levels to which they will sink to) in the design and engineering of their cars. Anyone that knows their capabilities for stinking will stay away for life.

Of course, this assumes the youngin' doesn't have good parents that wisely tell them to stay away from the Big 3. Of course, that also assumes the young person will listen to their parents! :P

In the end, if they don't have a good product Chrysler will be unable to resell to Dart owners in the future, and we'll be asked for bailout #3 in about 10 to 20 more years.

uplanderguy · February 2013

The fact is, the jury is out on the quality of the Dart, even though you have your mind made up already, sadly. Again, the enlightened often feel they are the most open-minded. I discovered this on my own about thirty years ago.

dieselone · February 2013

Pro GM and GM fanboy people should offer to subsidize GM on their own. Those against GM should be able to UNCHECK that tax box on their tax forms this Spring.

Obviously there aren't enough of them, or GM wouldn't never have gone bankrupt.

In all seriousness, while I am not happy about bailing out a business like GM that already had one foot in the grave long before the crisis, it probably was the right thing to do.

The bonus is I get to continue criticizing GM.

andres3 · February 2013

And you're basing this on.....what? Oh, that's right, a '95 Neon.

Yes, that's part of it, but I'm also basing it on the dealer interactions, reactions, and service after purchase.

I went to 3 different Dodge dealers seeking refuge from continued breakdowns (fix it right and fix it once and for all dammit!).

All of them pretty much performed the same with the same level of service and culture.

So after warranty, that would have been years '98-'01 at 3 separate dealers. The reaction of "oh yeah, that's normal to go bad." The "parts just breakdown" routine, and so on and so on. It amazes me that more parts weren't broken while trying to repair other parts. At least, I was never told if they were.

I'm basing it on the fact that Chrysler never sent a letter for extended warranties on the auto transmissions, the head gaskets, nor the air conditioners and compressors that routinely failed.

Or how about a recall on the leaking gas tank? A recall would even be welcome, I can't recall a single recall on the Neon.

dieselone · February 2013

But doesn't seeing obvious quality control gaps and shortcomings in a car lead you (logically I say) to thinking and at least perceiving that perhaps other shortcuts were taken under the hood, inside the wheels, and other unseen places?

Logically yes, but I haven't seen that in reality. Most of the company cars my wife has received over the past 10 years have been shoddy to me, but they've mostly been very reliable. That doesn't change the fact I wouldn't buy any of those cars with my own money.

I think she's got about 45k miles on her '11 Taurus. No problems yet except for a few rattles and lousy fit-n-finish. The Taurus is the first company car I've looked forward to her getting but it's not an impressive car.

circlew · February 2013

I believe the turbos increase rpm which may add wear on the internal combustion engine. I haven't driven a recent turbo, but from what I've read it sounds like spool time and turbo lag have been mostly resolved. However, I wonder whether they had to compromise efficiency to get there.

I'd comment but I don't want to upset GM, which is way late to the 4T party. I'll note both points you made as follows:

#1 - No lag or torque-steer in the Kia.
#2 - Efficiency is way up there if you know how to use it, as bpizzuti noted.

Regards,
OW

dieselone · February 2013

The small car market can be won with good product. Since a small car is often one's first purchase, there are new customers to be won over.

Ford and GM have already learned that IMO. The Cruze and Focus are nice small cars. They are selling well (not everyone can be #1 in sales) and from what I've seen on used listings, they seem to hold their value better than ever before. I'm surprised the Focus sells as well as it does with it's lumpy transmission.

I don't think Uplander could buy a used Cruze for what he paid new for his Cobalt.

andres3 · February 2013

Obviously there aren't enough of them, or GM wouldn't never have gone bankrupt.

Not sure about that. It is just that they want to continue to be able to buy bottom of the barrel vehicles for rock bottom prices. The only way to get rock bottom cheap prices is to make a cheap undesirable car, produce the heck out of it until inventories are ultra overstuffed, and then the massive discounts and rebates ensue.

It's a vicious cycle.

dieselone · February 2013

Not sure about that. It is just that they want to continue to be able to buy bottom of the barrel vehicles for rock bottom prices. The only way to get rock bottom cheap prices is to make a cheap undesirable car, produce the heck out of it until inventories are ultra overstuffed, and then the massive discounts and rebates ensue.

Well you have a valid point, having a customer base that isn't willing to pay what the competitions customers will, can be a problem. At least GM, Chrysler, and Ford have trucks to extract some profits from customers;)

tlong · February 2013

Too bad Lance Armstrong didn't have parents like you.

It's the expectation that since everybody cheats, you can too that is sending the USA down the tubes.

fintail · February 2013

I don't recall any clear profitability being shown when the old organization was intact - given the mediocre to horrible Hyundai product of the era, it's hard to believe real profit was being made. The government-coddled old chaebol might have broke up, but the connections remain - check who is the CEO.

Korea's business, partially enabled by your tax dollars.

tlong · February 2013

Guys like you give the other guys a free pass by saying things like, "Geez, look at GM's average owner age"--when it's the same or extremely close to all the other big manufacturers. Come on. Your high school debate teacher would shake his or her head at that one (I know that particular example wasn't you).

Since I was the original poster, I'll respond. Even though you don't like people leaving things out, you left you the fact that I prefaced my message with "I believe I've read this but have not verified". Not quite as definitive as you are making it sound. Also, we did confirm that Buick and Caddy have quite old user populations - less so with Chevy, but still older than many others in the same market area.

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