Volvo, Mitsubishi, Road & Track Predicted to Die
Each year, 24/7 Wall Street predicts which brands will disappear next year. It does so to dubious success. Of the 10 brands predicted to disappear in 2012, eight are still alive (more or less.) Only Saab is gone (some say it is not), and Sony Ericsson is now Sony. Of the 10 brands predicted to disappear in 2014, two are car brands, one is a buff book.
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Volvo. Says 24/7 Wall Street:
“A mid-market car company without a broad range of sedans, SUVs and light trucks would find it hard to make any progress in the United States. Volvo’s model line is too small to allow it any chance.
Volvo’s future is in question not just in the U.S. The company’s dealerships in China inflated sales numbers to receive cash incentives from the company that never went to customers, according to Brand Channel. In other words, some of Volvo’s dealers committed fraud. “
Says TTAC: If you think Saab is a zombie brand, look for undead Volvo decades from now.
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Mitsubishi Motors. Says 24/7 Wall Street:
“While it never had a massive presence in the United States, the niche Japanese automaker has had some success with models like the Lancer and the Eclipse. However, Mitsubishi Motors will soon exit the U.S. market, just as its Japanese rival, American Suzuki Motor Corp., did at the end of last year.”
Says TTAC: The demise of Mitsu has been predicted many times, and many times, crow was had for dinner. Do not underestimate the staying power inherited from a rich parent.
Road & Track. Says 24/7 Wall Street:
“The four dominant magazines have all posted advertising sales drops in the past five years as Car & Driver, Motor Trend and Automobile have each lost hundreds of ad pages. Road & Track has had the worst of it. Ad pages fell from 1,092 in 2008 to 699 last year. Pages are down another 31% to 232 for the first six months of this year, according to MIN. No large national magazine can continue that kind of long-term slide… Car & Driver has an audience of 10.7 million people, which according to Hearst makes it the world’s largest automobile magazine brand. Hearst does not need to support two magazine brands, each of which is in the midst of a sales slide. Since both magazines are based in Ann Arbor, Michigan, a consolidation of staffs would be a money-saving option. Road & Track subscribers could also be migrated to Car & Driver. Road & Track might continue to live online, but Hearst has no reason to keep two similar titles.”
Says TTAC: Remember, 24/7 Wall Street had two out of 10 right in 2012 ….
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Also, the list suffers from a bad list definition. It says “Each year, 24/7 Wall St. identifies 10 important brands sold in America that we predict will disappear before 2014.” It should (but did not) add “… from the American market.” There is a very slim chance that Volvo and Mitsu will retreat from the U.S. in 2014, but I would not bet on it. Worldwide, no chance.
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.
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Part of Volvo's problem is that the only people who buy new Volvos are people who wrecked their old ones (THAT'S why they're so committed to the whole zero fatalities thing, they'll run out of customers otherwise). It's harder for them to attract new customers because the safety difference isn't as easy to perceive anymore between their offering vs competition, and the high price tag + poor resale value are a turnoff. As far as Mitsubishi's health goes, how is Mitsubishi Motors Credit of America doing, exactly? Because I have a feeling that MMUSA dealerships are more more useful as the retail channel for their loans, and the vehicles are just the garnish on the plate. Just like chicken wire dealers, who cares if you only break even on the cars, the real money is in the financing.
Automobile mag recently offered me a subscription for $6/year. That's probably barely above what an issue goes for at a newsstand! They must be pretty desperate for subscribers too.