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Oracle of Delphi

Where did Big 3 car owners go? Guess

6 posts in this topic

John K. Teahen Jr.

Automotive News

November 26, 2007 - 12:01 am ET

I've read it in the newspapers; I've heard it on the radio; I've seen it on TV.

It's great news, the best in years. But I don't believe it.

The headlines say, "Detroit 3 back on track" and "New contract puts Detroit back in the ballgame."

Not quite. Not by a long shot.

I'm not knocking the new labor contracts. They're excellent, and they certainly will help General Motors, Ford Motor Co. and Chrysler LLC as they claw their way back toward respectability.

The contracts cut Detroit's manufacturing, overhead and labor costs. I hope they will help GM, Ford and Chrysler overcome their staggering losses.

But this is a sales business as well as a manufacturing business and a money business, and the new contracts will do nothing to help Detroit 3 sales. The companies must do that all by themselves.

Sales success can be summed up in one word:

Product.

Product.

Product.

OK, three words, but you get the idea.

GM's in the lead

Product is the one thing that the Detroit 3, on the whole, do not have.

General Motors is well on its way with the Chevrolet Malibu, Cadillac CTS, Buick Enclave, GMC Acadia and Saturn Outlook. And don't overlook the Pontiac Solstice and Saturn Sky. Neither will ever be a big seller, but halo/niche vehicles are mighty important.

As we trailed a Sky down the freeway a few days ago, a friend remarked, "I sure never expected to see the Saturn name on a car like that."

GM still has a ways to go, but it has made a good start.

Turn to Ford and Chrysler, and the picture changes.

The Dodge Avenger is doing pretty well. So is the four-door Jeep Wrangler. Forget the rest. Jim Press, you have work to do.

Ford Motor can point to the Ford Fusion sedan and Edge crossover and the Lincoln MKX crossover. The rest of the fleet isn't much help. The ball is in your court, Jim Farley.

For much too long, Ford has relied on the F-series pickup and the Explorer SUV. They still sell pretty well (the F series is the nation's leader), but the days of 900,000 F series and 400,000 Explorers are gone. Replacements for that volume? None at present.

It brings us back to my favorite gripe: The Detroit 3 are in trouble because they quit on cars for a decade and a half; all efforts went to trucks.

It was a good decision from a financial standpoint because trucks bring more profit than cars. But the market is switching back to cars, and most of the Detroit 3 are so far out in left field that they can hardly see home plate.

Chasing the defectors

Lead time compounds the problem. You can't just press a computer key and have a fine new fleet of cars on the road. It takes years and years.

There's another extreme difficulty: winning back those who left your ranks during the who-needs-cars years.

In 1987, the domestic cars of the Big 3 had 67.6 percent of the car market. In the first 10 months of this year, they had 37.9 percent of a market that was about 25 percent smaller. You'd be right if you said the Detroit 3 are barely a factor in the car market anymore.

Where did all the Big 3 car owners go? That's easy. Chevy owners are driving Toyotas; Ford drivers are tooling about in Hondas; one-time Chrysler partisans have switched to Nissans and Mazdas.

They like their Japanese cars, and it's hard as you-know-what to get them even to think of the brand they deserted. Any auto sales executive will tell you that winning back a defector is just about the toughest sales job in the world.

Your car must be so much better than the competition's that the consumer just can't resist. At the moment, Ford and Chrysler have nothing like that. GM? We'll wait and see.

I hear the question: Those Japanese cars aren't any better than the domestic models in style, quality, equip-ment. Why should they be so hard to unseat?

Because they now have the owners, and that gives them a lot of points. When was the last time you heard a Detroit brand brag about owner loyalty? They don't talk about it because it isn't there.

To regain market share, the Detroit 3 must beat the foreign cars on desirability. And that won't be easy.

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You'd be right if you said the Detroit 3 are barely a factor in the car market anymore.

uh... yeah.

Toyota has *nothing* to be worried about from GM... or even Ford.....

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News?

-Product will help the Big Three

-Need to get out of trucks and back into cars

-Costs are too high

Whaaaaaat?! I've never heard THOSE things before!!!

Edited by AxelTheRed
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This article is so idiotic. The facts aren't even all there. Only the Wrangler and Avenger are doing well? Charger sales have remained steady, 300 hasn't dropped like a rocket, only the Magnum is the slow seller.

Also, the Avenger is what like 78% fleet? That's not exactly doing well, unless those numbers have changed. T&C sales are up too by the way. Of course Chrysler and Ford need a lot of work, but c'mon, we've heard the same crap over and over, it's not a bunch of lousy articles which have their facts messed up that will change the tide, it's the companies who are responsible for it.

Edited by Dodgefan
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