By on May 15, 2011

“If you have no cars, you will lose market share,” said double-CEO Carlos Ghosn at last week’s annual results conference of Nissan. He said openly what other carmakers on the other side of the Pacific only dare to whisper into the ears of sympathetic reporters, or via analysts at banks and brokerages: The March 11 tsunami will cost Japanese makers big chunks of market share. The questions is: For how long?

Ghosn is not buying into the well-meant argument that customers will be slavishly loyal and will hold off buying until Japan is ready to deliver:

“People need cars and they will not wait for us for six months. They will be moving to the competition, and we have to accept the fact that in some markets we will have a significant loss in market share.”

However, it is premature to think that drowning the east coast of Japan in a wall of water is God’s own bailout for Detroit. Here are some points to consider.

  • In my talks with Japanese manufacturers, “Hyundai” and “Volkswagen” come up with regularity, “GM” or “Ford” rarely rate a mention. The thinking is that an import customer will rather buy another import than go domestic. And indeed, both Hyundai and Volkswagen are on a tear. I know, both are not popular in blog comments.
  • Hyundai Motor America reported-all time record April sales of 61,754 units, up 40 percent compared with the same record-breaking period last year. For the year, total sales are up 31 percent, with retail volume rising 40 percent. Hyundai’s global sales were up nearly 10 percent in April.
  • The Volkswagen Group recorded a 13.9 percent in global deliveries in the first 4 months of the year, and a 14.5 percent increase in April.
  • The tsunami crisis will keep Japanese automakers busy for a while, but it is not a terminal disease. In fact, automakers appear to recover faster than thought. Nissan wants to be back to normal in October. Toyota said they will be at 70 percent of plan in June, earlier than thought, with a return to full normalcy in November/December.
  • When Japanese automakers are ready to deliver again, count on aggressive campaigns that remind customers that their brand is back, and stronger than ever. Ghosn announced to a somewhat incredulous press corps last week, that for Nissan, “2011 should be a progress in terms of sales compared to last year.” He is clearly banking on making up a lot of the shortfall in the last quarter.
  • Despite loan paybacks, the Detroit 3 are heavily leveraged, interest payments are high. The big Japanese automakers are sitting on piles of cash. Even notoriously leveraged Nissan is now cash positive. There is enough in the war chests to go on a broad sales offensive when the pipelines are full again.
  • Also, expect that automakers will send their cars where they are needed the most. Ghosn was refreshingly blunt last week when he said: “What we are trying to do is to protect some selective markets. You will see the availability of cars to be much more important in the U.S. or China, because we consider them critical markets. The shortfall will not going to be equal in all markets.”

Japanese carmakers, especially heavily export-exposed Toyota, are more worried about the effects of an overvalued yen.

“Japan has been weakened by the tsunami, and one would think that the currency mirrors a country’s strength,” a high Japanese industry executive told me on Friday night. “But apparently, this is not the case.”

It became crystal clear at last week’s annual results conference at Toyota that Japanese automakers will, with increased vehemence, urge their government not to stand by idle while other governments race to devalue their currencies in order to stem imports and to make their own exports more competitive. Japanese automakers also urge their government to end the foot-dragging on free trade agreements. Both promise no quick relief. Japan’s options to weaken its currencies appear limited to nil. Japan’s benchmark interest rate is zero, so is the inflation rate. Free trade agreements usually are phased-in over a long time – if they ever get phased in.

“Major Japanese automakers, facing increasingly fierce international competition, pinned their hopes on Japan’s participation in the Trans-Pacific Partnership, which would in principle scrap tariffs on trade among members,” writes the Asahi Shimbun. “But the administration of Prime Minister Naoto Kan has postponed its decision on whether to join negotiations on the trade pact. This has raised concerns about the erosion of international competitiveness of Japanese car manufacturers against rivals like makers in South Korea, which has been ahead of Japan in striking free trade deals.”

The writing is on the wall that more Japanese production will leave the country. This is where a strong yen helps: It buys more bricks, mortar and machinery in foreign lands. And eventually, more market share.

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47 Comments on “One Country’s Misfortune Is Another Country’s Market Share. Don’t Bank On It...”

  • avatar

    Japan will survive this and they will be back. Anybody who thinks otherwise is foolish. But the shortages will drive up retail prices and many buyers will look around instead of habitually buying a Toyota. This is a unique opportunity for not just Detroit, but for all non Japan dependent manufacturers. For those willing to look, a compelling case can be made. If one was interested in replacing their Camry, they would likely search the web. There they will find the usual unintended acceleration BS, but after they past that nonsense they will find loads of information that make it clear that the Camry of today is not built as well as the one they bought 10 years ago. Interior quality is nowhere near what Toyota routinely put into all of their products a decade (or more) ago. The roads are filled with Camrys whose bumper covers no longer match the color of the body panels. It is clear that while overall reliability seems to be holding up, the overall quality is not what it used to be. They will likely jump to sources like True Delta and (ugh) CR. That should knock most VW products off the list, but again Hyundai and most domestics look pretty good here as well. The big question is whether domestic dealers goose prices like their Japanese branded dealers will surely do. And will the beancounters destroy any forward momentum with decontenting? Both are big threats. (interesting that short-sighted American business practices are the biggest threat to increasing market share) The Chevy Malibu is a poster child for decontenting. If Detroit is smart, they will use this opportunity to get a new product in the hands of as many people as they can. Word of mouth killed Detroit in the days before the internet. Now it can help it…as long as the product stays the course.**

    **Enter Mustang transmission, etc comments here. Those problems may well be real, but every automaker has such issues. How they are handled is the key. If something like that becomes another GM intake manifold gasket deal, they are dead.

    • 0 avatar
      Bill Wade

      I looked at a new 4Runner yesterday as a possible replacement for my 06. LED taillights gone, tinny doors, seams not lined up on door panels, uneven stitching, even more plastic than my old one. The new 4Runner is scratched off my list, it exudes cheap. If I didn’t know better I would think Toyota fired their engineers and hired GM’s crew.

      Whatever is going on I’m quite surprised it’s happened so fast.

      • 0 avatar

        The new 4Runner makes more power, is bigger, has better fuel economy, and has more ground clearance. I’ll give you the tinny door sound and cheap plastic on the glovebox, but all the touchpoints are nice with leather wrapped armrests on the doors and center console and a really nice leather steering wheel. I don’t agree with your claim that the stitching is uneven or seams not lined up. I’m pretty detail oriented, and I haven’t noticed either of those issues. After 16k miles (with offroading), mine doesn’t make a single rattle and hasn’t visited the dealer other than picking up oil filters. I thrash this thing up mountain roads and it just keeps asking for more.

        BTW, mine stickered for $36k and has leather seats, backup camera, backup sonar, bluetooth phone and audio streaming, moonroof, reclining 2nd row seats. Considering how strong the yen is compared to the dollar, dropping stuff like the LED taillights (e.g. nice things that don’t make or break a sale) makes sense. They’ll be back in the mid-cycle refresh, just like they showed up on the 4th gen as a mid-cycle refresh.

      • 0 avatar

        They should fire their bean counters, not engineers. Oh, and put their designers off drugs.

    • 0 avatar

      Toyota makes reliable, trusted cars. they will never fade from this Earth. The smartest thing to do is wait till their stock bottoms and BUY BUY BUY.

      I gave some people – who weren’t even Stock market savvy – an ORDER to buy into FORD when it was around $1.49. They haven’t stopped thanking me. I double quadrupled my return into them and am very happy.

      I am not anxious to see them hurt because it will send ripples through the economy, BUT, I do hope the Big 3 take this as a sign to start producing more of their parts/trim here in America. It is ridiculously hard trying to buy certain colors of car because the paint comes from Japan and those factories are either closed or working at lower production.

  • avatar

    Why not just do what Europe and USA have been doing? Print more money out of thin air!

    • 0 avatar
      Dr. Kenneth Noisewater

      They’ve been printing for decades already (where do you think chairstain Berstanke learned “quantitative easing”?).. Plus, they have no natural resources, so strong yen buys more imported steel, oil, copper, all the stuff that goes into building a car for export.. They just need to suck up the hit on their margin like everyone else in an stagflationary environment..

    • 0 avatar

      Japan has been running the printing presses flat out for 20 years, and interest rates have been zero for the same length of time. They have the highest debt / GDP on the planet.

      The Japanese government can’t do anything to devalue the yen at this point, they don’t have any bullets left in the gun.

  • avatar

    i don’t think the big 3 will be able to effectively capitalise on this

    they have been dealt and incredible opportunity but i think only Ford have the breadth of product to ‘make hay while the sun shines’

    koreans will get most of it with vw picking up stragglers

    • 0 avatar

      Both Ford and GM have full, competitive product line, so I think this will be an opportunity for them. Chrysler lacks competitive offerings in the critical “C” and “D” class cars.

      Agreed on the Koreans. I can see a dyed in the wool domestic hater trading a Toyota on a Hyundai.

      VW – not so much. Despite their recent product changes, they still appeal more to “Mr. Euro” than to mainstream customers. And their reputation for reliability is even worse than the domestic brands. Mainstream customers don’t care about “Fahrvergnügen”, they care about cost effective, low hassle transportation – and that isn’t really what VW is noted for.

  • avatar

    In Brazil the position is: Hold your breath! Nissan and Toyota plan to enter the lower tiers of the market this year. If they really do it (not out-pricing the competition by 30 percent or more, that would kill them, but I think the market would accept to pay 10 percent more – for the Toyota Etios, the planned Nissan March, if they do that is dead in the water), 2011 and 2012 will show exactly how far they can go. In the “executive” car segment they (Corolla and Civic) killed off the competition and now take the top 2 spots. Whereas in that market they they faced uncompetitive and old products, at the base of the market they’ll find pretty modern offerings from Fiat and VW. Will their reputation for quality be enough to override Fiat, VW and GM’s huge cachet and die-hard fans?

    Fiat did it. They knocked VW and Gm out of 1st place. Even in the low wrungs of the market. It’ll will an intersting couple of years to watch and pivotal for the Japanese car industry in Brazil.

    • 0 avatar

      A couple of months ago I was able to sit in a Thai-version of the Honda Brio (Honda’s Etios rival) at the Bangkok Autoshow. Its hard to fault and had surprisingly good quality for an emerging market ‘world car’.

      Most importantly, I was told that the car would cost just 400k ฿ (Thai baht), which is a good 150k ฿ cheaper than a Fiesta. The Nissan March starts at 375k ฿, which undercuts even the Vietnamese made Kia Picanto (which I personally like the design of the most amoungst the world cars). Atop that Brio qualifies for ‘eco’ tax rebates that rivals such as the Picanto don’t qualify for, which is important due to high vehicle taxation in Thailand.

      Obviously, both the March and Brio are built in Thailand, as the Etios, and maybe even Brio, will be in Brazil. Logically, locally produced cars for the local market will be priced competitively.

      The problem with the Japanese has been that they were poorly represented in emerging markets, a lot of this was due to the cheap yen a decade ago, in the last five years, with the strengthening yen, the Japanese have finally invested with full force in emerging markets as they should have a decade ago.

      And the Japanese are finally getting serious about Latin America, while Nissan has had a good production presence, particularly in Mexico, the rest of the Japanese maker’s efforts has been half hearted. This is changing, while late to the party, Mexico and Brazil are the new hot spots where Japanese car investments are heading in the Americas.

  • avatar

    So when all those Toyota & Honda drivers get in another brand and find that don’t like them, then what? Japan will recover they will return to the fold and the rest will be farther behind. Worse, you all will have thousands if not millions who will say “yea I bought X and it’s not as good as my Toyota/Honda”

    • 0 avatar

      In some cases that will happen. In other cases, conquest buyers will be happy with their purchases.

      My neighbour set out to buy a Camry last year, and came back with a Fusion. So far so good.

      It will be important to make sure the conquest buyers have a good ownership experience. The domestic product itself is competitive at this point, so customer service and the dealership experience are key. It is vital to make sure that any problems that *do* come up are addressed quickly and effectively – so the problem itself is quickly forgotten.

      In my area, I’ve seen a hint of arrogance from some of the Japanese dealers, but in my case, have had OK service from them. VW is atrocious, back in the day of the Mk IV Jetta they were refusing warranty service on faulty window regulators if the car had aftermarket window tint. Don’t know what Hyundai is like.

  • avatar

    You Detroiters must be on crack. People running to GM and Ford because of the earthquake?

    Ford Explorer takes last place in Motor Trend, and takes 17th out of 19th place in Consumer Reports. With two major publications puking after driving the Explorer, something is wrong with that one. Did I forget to mention the Edge came in 18th place?

    Mustang manual transmission exploding. Ford still selling Mustangs with manuals to the public.

    Focus and Fiesta automatics have major issues.

    Fusion automatics also have some problems.

    GM and Chrysler score poorly in Consumer Reports.

    After all of this, Detroit is raising prices and using the profits to purchase marketing claiming Detroit makes quality products.

    Detroit is pushing a bunch of UAW trash on the public. Only a low income person would go for a Detroit product.

    • 0 avatar

      Looking at the comments so far I don`t see any “Detroiters”, is that like “birthers”?

      Fredtal – the scenario you suggest may happen but unlikely because it is widely held that many other companies (VW, Hyundai, For and GM amongst others) now equal or exceed Toyota dn Honda on the keyproducts (compact sedan, mid-size sadan, CUv etc) on fuel economy, price, warranty, styling, driving dynamics. So buyer’s remorse is unlikely for the vast majority.

      As ever time will tell – I still have in my ears those saying the new Jetta would never sell well or the Fiesta was crpa and would be low sales. Easy to pontificate on here, but we will see.

    • 0 avatar

      Interesting Cherry picking of results Jimmyy.

      In a recent C&D comparo the Focus Sedan finished first, in a separate short take review the called the Focus Hatchback as the best small car on sale in America.

      I just checked Consumer Reports and in the Large SUV Category, the Ford Flex is number 1.

      Certainly Ford can’t win every category, but they have some very good product out there.

  • avatar

    When the Japanese makers come roaring back, they’re going to need new models, not just more inventory and aggressive marketing. Toyota and Honda have been incremental in their approach to new model design, and that won’t work when the competition is coming out with next generation models substantially different.

    In the short term, this year, Ford has a new Focus and Fiesta, GM has the Cruze and Malibu, and Hyundai already has a new lineup, and VW with it’s first “U.S. spec” model. They should do well against shortages of similar Japanese models.

    When Toyota, Honda and Nissan are back to full production next year, they’ll be up against year old Ford, GM and Hyundai models, but VW will probably have more offerings, and even Chrysler will have new Fiat-based models coming out. T, H and N are going to need new, next-gen models to recover market share, not just more of their existing models, or mild refreshes.

    • 0 avatar

      Unlikely since those models you list – Focus, Cruze and new VW “USA” product will still only be one year old. Is the Corolla likely to be changed for next year?? No I don`t think so. Nor the Accord since it just had its mid cycle refresh.

      • 0 avatar

        Detroiters think the can change the look, add some nice interior upgrades, and people will be stupid enough to buy Detroit junk because they are “new”. Ford even goes farther and adds a bunch of useless technological crap. But, the transmissions are not there. Sounds like “Detroit Stupid”.

      • 0 avatar

        Since you came up with the term, erroneously, of “Detroiters”. I think you perfectly fall into the anti Detroiter (and some way there are not fanatical anti-domestic people on here).

        When you say “” are you meaning to refer to the Corolla? or maybe the 2012 Civic (Civic is way better than the Corolla in my mind) but the premise is the same. Minor changes.

        Can you tell me what minor changes were made to make a Cobalt into a Cruze or a 2010 Focus into a 2012 Focus. I think you will find they are entirely new cars.

        Also why wouldn`t people buy something “new” if as you say they “add some nice interiors”. Surely that is an improvement.
        I think there is no reasoning with you – unfortunate.

  • avatar


    Don’t believe the hype! I buy American cars & trucks exculsively and always will no matter how crappy they are. Made it though malaise era without a scratch and even the worst scoring current Dodge or Chevys are better made and more reliable than Japanesse cars of that era. Despite the hysteria over “exploding Mustang transmissions” I would buy one. In reality it’s only affecting a tiny/negligible number that’s getting far too much attention in the blogosphere and is easily fixed. I’ll bet you were too scared to go outside when the media was screaming about the bird flu. BTW, transmissions don’t explode nor do cars in general, outside of Hollywood.

    • 0 avatar
      Bill Wade

      BTW, transmissions don’t explode

      Don’t be too sure about that one. I had a 4L85E in a motorhome blow itself completely to pieces. There was nothing between the engine and the rear axle and dents in the driveline tunnel. When it went it sounded like a bomb went off under the motorhome.

      The mechanic had never seen or heard of such a thing and we had a large box of pieces that we picked up from the highway. The only thing we could assume was a massive torque converter failure which makes little sense on the relatively low RPM 8100 engine.

  • avatar
    Tommy Boy

    Even if I believed that for the short and long-term the “Big Three” products were now competitive (call me skeptical), because of the thug way in which secured creditors were treated, and the UAW favored in the “bankruptcies” (really they were political-favoritism lallapalooza’s) and the fascist-corporatist taxpayer bailout in general, I’m determined to avoid purchasing a UAW assembled product in the future. I’ve no interest in rewarding the Chicago-thug administration or the union-thug UAW, who are already siphoning money out of my paycheck every week via income tax withholding.

    I love the European brands driving dynamics (though hate the Bangle-ized styling of BMW / MB), but know better than to purchase those maintenance and durability nightmares.

    That leaves Asian. Toyota has definitely started emulating the worst practices of the Detroit automakers of lore — falling quality and bean-counter-itis.

    Honda doesn’t appear to have slipped as far (if at all) in this regard, but really really needs to can its stylists and sublet to some Italian firm. I’m just not interested in driving butt-ugly, no matter the other merits of a vehicle.

    Ironically, that leaves Hyundai / KIA. The KIA dealer ads around here are of the yelling “come on down” type, obviously seeking the lower demographic / low credit score market and then hitting them with the high pressure sales pitch. I avoid dealers with such approaches (I wonder if this is KIA’s approach nationally?)

    So that pretty much leaves Hyundai.

    Not perfect by any means, but perhaps in today’s market the best of a group of flawed choices.

    Too bad they don’t produce something like the (earlier generations) of the Toyota 4Runner, with a small diesel. That would be heaven!

    • 0 avatar
      Mr. K

      Dear (doubting) Tommy boy:

      “Even if I believed that for the short and long-term the “Big Three” products were now competitive (call me skeptical), because of the thug way in which secured creditors were treated, and the UAW favored in the “bankruptcies” (really they were political-favoritism lallapalooza’s) and the fascist-corporatist taxpayer bailout in general, I’m determined to avoid purchasing a UAW assembled product in the future.”

      Well, lets see here, the ‘thug’ way the secured creditors were treated…you said it bankruptcy. UAW favored? Yes, I am sure that agreeing that new workers will earn about 1/2 what the legacy guys make was a big favoritism. ‘fascist-corporatist taxpayer bailout in general’ like having a domestic auto industry, or would you rather kiss it good bye? If GM and Chrysler went under the second and third tier manufacturers would go with them. Say good bye to Ford and many of the suppliers that also sell to the manufacturers that assemble their cars here.

      I disagree with what you are saying in general, however the point where your comments reach a crescendo of tension with reality is where you say you will not buy UAW assembled products. Why do you rule out Ford, Mazda, and I think Subaru and Mitsu who have UAW work forces? You will turn your nose up at a top quality car – what is as good as a Chrysler 300, a ford Focus, or a Buick Regal in their classes? All are damm good competitive cars. it’s your loss. Buy a Hyundai or Kia if you want – they make a good product for a good price, but don’t cut off your nose to spite your face.

      • 0 avatar
        Tommy Boy

        Mr. K:

        Yes the new workers make less. But you neglected to mention things such as: a) the pensions remaining in place (in a non-political bankruptcy reorganization they’d have been eliminated going forward and current pensioners into the PBGC — didn’t happen here; b) the UAW as an unsecured creditor wouldn’t have been gifted multi-billion dollar ownership interests in GM and Chrysler; and c) that the “Big Three” are still saddled with legacy costs that would have been wiped out, or greatly reduced in a non-political bankruptcy reorganization.

        Secondly, the “disappearance” of the U.S. auto industry / the supply base are rationalizing talking points intended to justify the taxpayer bailouts. Without a taxpayer bailout of the UAW the “Big Three” could have gone into a genuine Chapter 11 reorganization and would have come out stronger than they are now (since now they’re still saddled with the UAW and its legacy costs). At most the government could have guaranteed “debtor in possession financing” rather than forking over tens of billions in taxpayer dollars, that will never be recouped.

        Also, there’s still a thriving non-UAW auto industry assembling vehicles in this country, Even to assume that for the sake of argument GM / Ford / Chrysler would have gone kaput, the remaining non-UAW auto industry would have picked up the slack and increased orders from suppliers.

        Even to assume, again for the sake of argument, that the “Big Three” and some suppliers would have gone away, at tens of billions of taxpayer dollars, how much have we taxpayers been forced to pay for each job saved? Hundreds of thousands of dollars? Millions?


        >>”Regardless of what you might think about them, the bailouts are water under the bridge at this point. What’s done is done.”

        No its not. In effect we taxpayers have borrowed tens of billions of dollars from the Communist Chinese (and on which we pay interest), and monetized the rest via Federal Reserve money-printing.

        Plus GM (contrary to established bankruptcy practice) was allowed to “carry forward” approximately $45 billion dollars in “losses,” which in coming years it will use to offset “profits” and so avoid paying taxes.

        No my friend, between withholding from our paychecks, plus increased inflation due to Fed monetization of the debt, you and I are going to be paying for this bailout for years to come, if not for the rest of our lives.

      • 0 avatar

        “Without a taxpayer bailout of the UAW the “Big Three” could have gone into a genuine Chapter 11 reorganization”

        No, without a taxpayer bailout GM would have gone into a genuine Chapter 7 liquidation and its carcass would have been bought by the Chinese.

      • 0 avatar

        No, without a taxpayer bailout GM would have gone into a genuine Chapter 7 liquidation and its carcass would have been bought by the Chinese.

        Carrying that completely hypothetical scenario forward, all in good fun of course:

        -Most GM jobs would likely have been spared, at least in the short term, without a single dime more of taxpayer cash wasted to preserve a company most consumers had voted with their wallets to kill anyway.

        -The ChiComs, for all their faults, would not tolerate the UAW for a moment… and would certainly have sent the union packing in short order. The loss of such a significant chunk of its membership would have driven a stake through the UAW’s black heart, killing the union once and for all.

        -The death of the UAW would then result in immediate, long-term benefits for the 1.3 “domestic” automakers remaining. The ability to toss out existing union contracts for realistic salaries and benefits would encourage those companies to build factories once again in the US. In right-to-work states only, of course.

        -Employment numbers would skyrocket, even with the loss of GM plants… and Bobbo “Kaczynski” King would realize his true calling as a rather foul-tempered Wal-Mart greeter. Or, perhaps, writing a nonsensical Manifesto from a backwoods shack in Montana.

        Shall we continue?

      • 0 avatar



        So the corporate bosses and stockholders would make out while the working guy gets stiffed (again). While I detest many of the UAW’s practices, if the union went away, the pay rate at the transplants would drop like a stone since there would be an overabundance of unemployed skilled assemblers clamoring for a job. Profits would soar, but car prices would remain the same. The execs would help themselves to fat bonuses, the stockholders would be happy and the middle class of America sees its standard of living drop, yet again. How nice of you to decide what an appropriate salary for auto work should be. Perhaps you should take an 50 percent pay cut and smile for the camera and say “I am so grateful that I have a job in this recession”…Lets pop some corks for globalization, or comparative advantage or what ever bull$hit bingo term you would like to apply. Ugh

      • 0 avatar

        How nice of you to decide what an appropriate salary for auto work should be.

        I’m pretty sure I never claimed to determine that. What I do believe is that the free market should decide such things, without the UAW around to artificially inflate what should be a sensible wage for non-skilled labor. Who’s to say that bolting a fender onto a Daewoo Cruze isn’t worth any more than $12/hour? Let the market decide!

        Perhaps you should take an 50 percent pay cut and smile for the camera and say “I am so grateful that I have a job in this recession”…

        Not much chance of that happening. Have you forgotten already that the Detroit 2.3 are in this mess in the first place thanks in large part to the inflated wages and ridiculous work rules spearheaded by the left and their union masters? Maybe not all of those thugs should have jobs. Maybe very few of them should. And damn right those remaining should be thankful to have jobs in the first place. If they want more pay, they’re welcome to go out and earn it… if they can… just like the rest of us.

      • 0 avatar

        I’m willing to be that if management hadn’t beancounted the product to death and GM held near the market share they used to, paying for labor wouldn’t be such a big deal. I’m choosing not to take the “leftie” bait you threw out there, so we will just have to agree to disagree…

      • 0 avatar

        I’m willing to be[t] that if management hadn’t beancounted the product to death and GM held near the market share they used to, paying for labor wouldn’t be such a big deal.

        And had GM held a reasonable line on labor costs — versus kowtowing to the UAW time after time after time after time again — more money would have been available to spend on proper product development. Had that happened, maybe, just maybe, GM would have maintained its share AND posted better profits to boot, all while avoiding becoming a national embarrassment and a multi-billion dollar joke.

        So which came first, the chicken or the egg?

  • avatar

    While some will no doubt let political considerations impact their choice of car, I suspect most will simply choose the product that meets their needs or wants.

    Avoiding Detroit products for political reasons is like avoiding Japanese and German cars because of WWII.

    Regardless of what you might think about them, the bailouts are water under the bridge at this point. What’s done is done.

    And it’s not as though other companies didn’t get substantial government handouts as well. For example, what sort of tax breaks and land deals did the transplants get to set up their plants in the “right to work” states? And wouldn’t it be appropriate to refer to VW / Audi as “Government Motors” considering a good chunk of the shares are held by the German state of Lower Saxony and the Emirate of Qatar?

  • avatar

    @ Tommy Boy….I would be one those “UAW legacy costs” that the big three is “saddled” with.

    BTW….Thanks for that piece of your pay check. Keeps me in beer,and beats the crap out of going to work every day.

  • avatar

    There is no question in my mind that both Hyundai/Kia & the domestics will have an increased opportunity to gain market share from the Japanese because for the first time all have first class products in the subcompact, compact & mid size segments. My guess is VW won’t gain much because of their longstanding reliability issues.

    For a buyer that actually compares the competition as opposed to one who blindly continues to buy the same brand there are new excellent choices on the market today.

  • avatar
    George B

    The obvious winner is Hyundai. Why? Because Hyundai is willing to throw in really long warranties to overcome customer reluctance. If I was shopping for a Toyota Camry to minimize risk, my first choice would be to wait for the new 2012 Camry to come out. If I couldn’t wait and the 2nd choice Honda Accord wasn’t a good value, I’d be looking at the Hyundai Sonata 3rd and, way down the list, the Ford Fusion or similar Mazda6 4th. If Ford wants to get those conquest sales, they have to match the Hyundai warranty.

    • 0 avatar

      Completely agree with the warranty issue. What I don`t understand is why VW, Ford and GM do not offer longer warranty (other than their luxury brands)? In Europe they offer 3 year/60,000 mile which in essence does mean 3 years since people usually drive less than in the US. The 3/36K warranty here is for many people over within 2 years due to higher mileage people drive. Since quite a few VW, GM and Ford products are now “European” why don`t they offer the same warranty and try to compete on reassuring customers?

      • 0 avatar
        Steven Lang

        GM has a 5 year / 100k warranty.

        Chrysler offered a lifetime powertrain warranty a few years back. It didn’t help them that much in the end. Most folks wouldn’t consider them for the ‘reliability’ side of the equation anyhow.

        Hyundai/Kia have succeeded quite well in this market. But the warranty is not really all it’s cracked up to be. I see more than my share of substandard Korean workmanship at the auctions. In fact, the only reason Kia has finally started building even remotely ‘average’ vehicles in terms of reliability is because they’re marketing Hyundai’s wares. Most used Kias are complete garbage.

      • 0 avatar

        Steven, thanks. I should have been pore specific. I meant bumper to bumper warranty which is more comprehensive than a powertrain warranty.

  • avatar
    doctor olds

    Ford is buried in debt, but General Motors is not heavily leveraged, well on the way toward zero debt. Both will gain share from the Japanese. Toyota will continue to fall off and even Honda will face problems now that their leadership in fuel economy is gone and other makers beat them on quality as well. The market share of the Japanese are likely to begin a period of decline that they will not completely reverse even when full production capacity returns. They will become smaller players here in an increasingly splintered market.

  • avatar
    Bill Wade

    Hyundai/Kia have succeeded quite well in this market. But the warranty is not really all it’s cracked up to be. I see more than my share of substandard Korean workmanship at the auctions. In fact, the only reason Kia has finally started building even remotely ‘average’ vehicles in terms of reliability is because they’re marketing Hyundai’s wares. Most used Kias are complete garbage.
    I have two Sorentos in my company, an 03 with 200k+ miles and an 05 with a bit over 250k. The 03 lost the left front hub assembly and has had some minor electrical issues. The 05 has been virtually flawless. Both have had less service than the pair of 05 4Runners in the fleet.

    ALL of the above have been VASTLY better than the Silverado trucks and Dodge minivans we have. If this is indicative of the KIA brand being shoddy then I would like to know what’s good in your mind.

    Oh, KIA replaced both hubs, put on new brakes and lines when the left front hub failed. They did this at no charge and the vehicle had 120k miles. They said it hadn’t happened before and corporate wanted the parts. Ever heard of a US company EVER doing that?

    We’ll definitely entertain buying KIAs again.

  • avatar

    Love those Cruzes – $20K for a car with drum brakes and no cruise control.

    Real competitive! LOL!

  • avatar

    Keep in mind, those Cruzes are just repackaged Daewoo junk.

    That was a real success!

  • avatar

    Ever since the Japan disaster began, I have thought that Hyundai would benefit from the market disruption.

    However, since Hyundai is already on a tear, it may take some time to discern a ‘tsunami bump’ from the regular record-setting that Hyundai is already doing every month anyway.

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