Green Cars In The Reds
When I was a very young and very green copywriter, Dr. Carl Hahn, at the time CEO of Continental Tires and later CEO of Volkswagen, said in an agency brief: “We lose 10 Deutschmarks on every tire we sell.”
“Then we better stop advertising them,” said I.
Hahn gave me a pained look. The look was followed by real and massive pain in my left foot, because my Creative Director had kicked me viciously.
“Ouch!” I said.
“You’ve got that right,” said Hahn.
That little story crossed my mind when I read in The Nikkei [sub] that “Mitsubishi Motors Corp.’s electric vehicles and other eco-friendly offerings are expected to begin contributing to the firm’s bottom line in two years.”
“During the period covered by the current business plan, we hope to reach the point where they will no longer drag down our earnings,” Ichikawa said. The break-even level is of 60,000 to 70,000 units sold annually, and Mitsubishi hopes to get there in the fiscal year ending in March 2014. For this year, the optimistic plan calls for selling 25,000 units – at a loss.
Mitsubishi hopes to ignite sales by cutting prices and using a cheaper battery. Nissan goes to opposite route and raises prices for its Leaf.
This situation may explain why manufacturers with salable EVs are expanding production o0nly VEEERY carefully, and why manufacturers with EVs on PowerPoint charts or in prototype form are reluctant to crank them out in high numbers. Although, as the kick under the table still reminds me to this day, if you don’t have the gumption for high numbers, you’ll never get your investment back.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
More by Bertel Schmitt
Latest Car Reviews
Read moreLatest Product Reviews
Read moreRecent Comments
- Redapple2 volume meets or exceeds expectations......................... But, they always give you high annual volume to quote so they get a cheaper price. You have to tool up to that volume (costing you extra$) because if that part number reaches that volume and you cant meet it? Whao unto you. After getting burned by gm 10 yrs ago, we moved to heavy truck and agriculture products only. Steady volumes. More profits. 30 net payment. The vampire is up to 90-120 days now? Never big 3 work. Ever !
- Tedward I was hypothetically annoyed about this until it happened to my wife. Watching her face twist into disbelieving rage once she realized that gm had sold her data to an insurance company after buying a very nice Cadillac was an eye opener though. If anyone wants a peek at the reputational damage done look at her. GM turned a manual BW purchase (and she's head over heels in love with it) into a non event as far as recos and future purchase considerations go. That's a heavy lift. I mean, she'd buy another manual BW, but there's zero talk about gm cars in general coming from her, in stark contrast to her VW love while she had her gti.
- Namesakeone Doesn't China hold a lot of our debt? I honestly don't know, but if they do, how high will the tarriffs climb before China retaliates--by calling in that debt? And really screwing our economy like no influx of Chinese products can? Again, I don't know. If someone out there in TTACland knows better than me, please enlighten me.
- ToolGuy I'm considering purchasing a few new Aston Martin vehicles.
- Spamvw 13 spoke rims from a 2005 Golf, I approve, as I have them on my '02 JSW TDI that hit 480k today.
Comments
Join the conversation