Things are bad for Chrysler, Ford and GM. The Big 2.8 are burning precious cash, shedding valuable market share, choking on unwanted trucks, attempting to nurture (or excise) damaged brands and outmoded models, and struggling to bring relevant products to market. Bankruptcy looms large. And yet, there’s a silver lining to the recent, calamitous downturn in the U.S. new car market. But before we reveal the sliver of hope, let’s check in with the main engines of their destruction: Honda, Nissan and Toyota…
Posts By: Andrew Dederer
Back in 1783, Paris was all abuzz with the exploits of the Montgolfier brothers’ balloons. Using a simple bag and a lot of hot air, men (and sheep) were able to fly (or at least float). One of the observers was none other than Ben Franklin, who was fascinated by the display. An onlooker was less impressed “What use is it?” America’s founding dirty-old-man smiled and replied, “Of what use is a newborn baby?"
May’s new car sales numbers are in and things are looking bleak for The Big 2.8. Their corporate Spinmeisters can blame a down economy and sky-high gas prices all they like, but sales drops well into the double digits are never good news. Market share declines aren’t exactly glad tidings, either. That said, truth be told, Black Tuesday is actually a good sign. It shows that the domestic automakers have finally “accepted” the market. Whether they’re too late is another question entirely.
Does the head of Saturn have photos of important movers and shakers with goats? How else can you explain Saturn’s survival? All that’s left of GM’s “different kind of car company” is the same old spray of red ink. From import fighter to importer of Americanized Opels, Saturn’s been an abject failure for decades. And yet, GM’s has deemed Saturn one of their three “sales channels.” While there are few (non-goat-related) “image” reasons for Saturn to continue, a close look at the numbers shows its defense lies in what can be done, not what people [re]think.
There’s an often-repeated statistic: U.S. Buick dealers sell just four cars per dealer per month. It’s true, but c’mon; that was last year’s totals. In March, Buick sales slipped to three cars per dealer. Thanks to TTAC’s Frank Williams, I’ve had a chance to examine the exact dealer and sales stats for the Beyond Precision people. Having deconstructed the data, I can declare that this seemingly absurd three cars a month number, while strictly true, isn’t the whole story. The “whole story” is much worse.
You can argue who makes the best car in any given segment or genre ‘til you’re blue in the face. As for who has the best auto ads, there isn’t much debate: Volkswagen. Once again, the Boys from Wolfsburg have commissioned another Clio candidate. This time ‘round, it’s a talking (if ironically immobile) Bug named Max, starring as a talk show host. [Max ad not shown here; above is a vintage VW ad] The new ad, devised by Miami’s Crispin Porter + Bogusky agency, sums-up the automaker’s gestalt even better than “de-pimp my ride” and “Fast"– and not in a good way.
The first thing that stands out about the new ad: the fact that the host is a Beetle. Roots, rock, reggae be damned. At the risk of stating the obvious, the Beetle isn’t even made anymore. Not here. Not Mexico. Nowhere. CP+G know what they’re doing though; in her more lucid moments, even Lindsay Lohan recognizes that old thing. The Bug’s iconic shape is an instant attention-getter.
It’s getting close to the first anniversary of Chrysler going to the dog. While there’ve been job cuts and “market adjustments,” the shoes are still hanging. Chrysler is still a long way from being profitable. But it appears to be an equally long way from breakup. What exactly is planned? The truth may be that Cerberus isn't “planning” so much as “waiting.”
As sure as night follows day, you can count on seeing the following after news of an automaker in trouble. “___ is in talks with Renault/Nissan CEO Carlos Ghosn.” The other thing you can count on: these talks won’t amount to a hill of beans. At most, the result will be some sort of technology-sharing venture in some peripheral market or an engine deal for a car you’ve never heard of. Why all this sound and spin signifying nothing? Because the Brazilian-born auto exec knows which side of his bread is buttered.
Or not. Despite all the noise about a Chrysler – Chery hook-up, despite Chinese manufacturers' presence at the North American International Auto Show, we have yet to see a single Chinese-built (let alone designed) vehicle here in the U.S. So, are they really coming? The short answer is yes, some of them, eventually. But not for quite a while yet.
Yesterday, Consumer Reports (CR) rated Cadillac’s new CTS a better whip than both a BMW 328i and Mercedes C300. Never mind that CR preferred the Infiniti G35 and Acura TL. A Bimmer had been bested by a Caddy! This is news! Bimmers are the buff book benchmark! Yes, well, tying the commercial success of BMW’s 3s and 5s to their on-road abilities is a perfect example of false synchronicity. While many models are justly coveted for their dynamic delights, their on-road performance is tangential to their sales appeal. BMW’s mojo lies elsewhere, in a more precarious place.
Back in the eighties, a GM executive congratulated a colleague who worked for the Cadillac brand. “Well done for reaching 300k sales.” The Caddy man was having none of it. “We didn’t sell three hundred thousand Cadillacs; we sold three hundred thousand Buicks.” The remark was prescient in two ways. First, it acknowledged Cadillac’s ruinous move “down market.” Second, more importantly, it reflected the fact that Caddy’s success was Buick’s failure. GM was already descending from a well-ordered familial hierarchy into the madness and chaos of cannibalism.
Acura’s finest marketing moment comes halfway through “Pulp Fiction.” Our “heroes” have made a mess of things; the boss has called in “the cleaner.” Cut to an NSX (the sensible man’s Ferrari) pulling into the drive. Clearly “the cleaner” is well paid, always in a hurry and has no time to worry about his car. Who but car geeks remember this seminal moment? Where is the NSX these days? In fact, where’s Acura? As Consumer Reports (CR) reported, the answer is simple enough: nowhere.