By on October 30, 2007

ch008_048tc.jpgAs Marketwatch rightly points out, all this talk of United Auto Workers' contracts this, plug-in hybrids that, and Chinese expansion the other thing, doesn't have much impact on Detroit's current bottom line. Ahead of this Thursday's reports on October sales, the Dow Jones' diligent reporters have rounded-up the usual suspects. First up, Goldman Sachs analyst Robert Barry. To say Barry isn't bullish on the U.S. car market's immediate prospects would be like saying Eeyore needs Prozac. "With oil prices above $90, choppy stock markets, and renewed economic concerns, the selling environment remains poor for new light vehicle sales." Barry reckons ramped-up incentives on outgoing '07s are all that's propping-up U.S. sales. Once those wear-off… Barry's particularly sanguine about Ford Motor Co.; he's told his clients that The Blue Oval Boyz are heading for a 17 percent hit against their October sales numbers. Meanwhile, Deutsche Bank analyst Rod Lache doesn't like what he sees over at Chrysler; weak truck sales are likely to lead another double-digit decline. And Barry's warning that Chrysler's Last Big Thing, its new minivans, "may be off to a slow start."

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21 Comments on “Meanwhile, Car Sales Suck...”

  • avatar

    If their volume Caravan sales falter Chrysler is on shaky ground. Of their outgoing model wasn’t it some 50% were built to go directly to fleets. But this has been a slow and foreseeable result and Caravan/T&C sales have been dwindling over the past 10 years as fierce and loyal competitors have revised and improved their vans (noteably ToyHyundonda) religiously and provided excellent customer service.

    Reason Being: For the Big 3 it’s a very difficult game to win back customers from these new powerhouses b/c they continually improve their vehicles and have a religious full model change every 4-5 years (not a skin deep sheetmetal change over an aged platform – cough Focus). To add to that fact they keep excellent resale value, have above average quality and value and a service department that stands behind their product rather than give you the run around. For the Big 3 to win customers back they have to not only make a competitive car but convince their jaded (yet once die hard, dedicated) customers that they’ve changed for the better. But over the past 20-30 years with constant proclomations that this year they’ve done it – hardly anyone is listing anymore to their shallow pledges.

    I’m still a GM diehard truck owner – but can not own one over 100k miles b/c of it’s terrible reliability (nothing like spending $5k in repairs in one year as the bearings in the rear ends wear out – almost as if it’s a standard maintenance – or a/c breaks for the 2nd time, or the alt goes out, or the random check engine lights, etc.). I look at my Silverado and compare it to my higher mileage Honda which has had one problem and that was a rusty exhaust (in 8 years of ownership) – the Honda requires a little more maintenance but it’s all scheduled and I get a loaner car and very little hassle. I even had Honda fix a couple interior defects in the car 10k past warranty for free! On the other hand, I go to the GM dealer and when the a/c goes out (right after warranty so I of course have to pay) within a year of the replacement they try to stiff me that it’s not covered under their limited 1 year warranty that I was promised when I had the dealer do it.

    Who knows – maybe this will be my last GM truck – I may bite the bullet and get a Ridgeline b/c I know I will be well treated and it can do most of the towing / off road that I require (just not as easily). I’d buy it b/c I know Honda stands behind their product even well after the warranty period is over. I know that when I write a letter to the company they will respond and often do the right thing. I know that their priority is their customers 1st and foremost and not the sharesholders. I know that the BOD are all engineers with an actual conscious and will not sell me something inherently dangerous (think Ford here) b/c it saved them $1 a car.


  • avatar
    Steven Lang

    I have to agree with a few items, and disagree with more.

    As for Chrysler minivans, they will DESPERATELY need to provide a short wheelbase version if they want their marketshare to be anywhere near the last several years. Although the powertrain and versatility of their new model is very well done, the quality of the interior components is at least two rungs below the Sienna and Odyssey.

    It’s very hard to justify a price between 25k to 35k when your best competitors use more aesthetically pleasing materials. And contrary to the (guy buys the minivan) myth, it’s the woman who usually test drives the vehicle beforehand.

    Ford will be in Chapter 11 within 3 years. Chrysler will be sold off and outsourced. It’s really a shame. Back in the 1990’s Ford had a quarter of the market and Chrysler was the most profitable company in the world. They still have the talent. Just not the organizational practices.

    Did I also fail to mention that a few of their ‘managers’ would be better off selling toasters?

  • avatar

    GM is in worse shape , way too many dealers. Way too many brands. thanks ex-dealer

  • avatar

    Didn’t Henry Ford assert that you have to pay the workers enough to buy his cars?

  • avatar

    @ Donal
    that was before the world became densely populated with investment bankers, attorneys, and staff assistants…..

  • avatar

    I saw my first 2008 Dodge Caravan this weekend…and boy was I disappointed.

    U-G-L-Y…it ain’t got no alibi….it’s ugly!

    For Chrysler’s sake, I hope I’m in the minority.

    Steven — you may be right, and if the wives are buying the vans, Chrysler is in even more trouble because I don’t think women will want to get within ten feet of these vehicles, let alone get inside one (poker table or not).

    Absence of the 4-pot option is going to hurt both the Caravan and the Highlander (down 30%) in model year 2008.

  • avatar

    I just bought a 2008 Saturn VUE XR AWD last month (for my wife) and this week a friend just bought a 2008 Town & Country (LOL). By his own admission the van is quite ugly outside but the interior is nice. The ’08 VUE is great, especially compared to the ’07-earlier lunch boxes that say “VUE” on them. It’s funny to see “imports up/domestics down!” all day on the interweb. Nothing by the foreign competition was even a consideration for either of us.

  • avatar

    Indi500fan: Maybe we should all take off our shirts and get jobs as stockbrokers.

    Steve_K: According to TTAC’s review, the Vue was originally an Opel Antara.

    One would think a weak dollar would help domestic makers and hurt imports.

  • avatar

    My God! Who would buy an overweight, underbuilt POS like a Ridgeline under any circumstances?

    The dealer pampers you. So what? He has to to move those steaming piles of posermobile!

    Back to Chrysler, I totally agree with the comments about the lack of a 4 and of a short wheelbase model.

    Chrysler’s strength was that they had a FULL RANGE of minivans, while the Japanese had only the big ones selling in the mid-price range on up.What kind of idiots run that place now? Mid-priced and up is a very crowded place to be.

    Chrysler needs to go back to small, low-priced, but not cheap-looking–like my old ’84 Voyager SE, 4-cylinder, 5-speed, that had a nice interior in colors other than grey and bright paint with contrasting detailing around the windows. The last late model SWB Caravan I saw looked like Soviet Russia-inside and out, and when I read the brochures on it, most of the option lists read “Grand Caravan only”.

    A lot of people in my age group don’t need a 201″ long, 2.5 ton, 3.8-liter V-6 vehicle any more–our kids are grown and on their own– but we want utility in something smaller,lighter, cheaper to fuel–a sedan doesn’t cut it on vacation any more, we’ve gotten used to headroom. A nicely-appointed vehicle the size of an ’84 Voyager/Caravan is what we want.

  • avatar
    Matthew Danda

    Last year my wife was pregnant with our 3rd child and we had to get a van. There was absolutely no reason to look at anything other than a Toyota or Honda. None. And because Toyota makes a slightly cheaper model than the Honda, and because that price was just as good as everything else out there (Chrysler, Hyunda, Kia, etc.) we didn’t even bother looking elsewhere. We bought the Toyota.

    Incidentally, there were heavy discounts on the Chryslers–but I don’t trust those dealerships to actually give me the best price. Besides, once the transaction price tops 25K, well, that puts you into Toyonda territory…so no deal Chrysler.

  • avatar

    My God! Who would buy an overweight, underbuilt POS like a Ridgeline under any circumstances?

    The dealer pampers you. So what? He has to to move those steaming piles of posermobile!

    Maybe the Ridgeline fits his needs! Maybe he likes the Ridfgeline! To each his own.

    Why do other people get argny when someone decided to come to their senses and realize they do not need a BOF pickup truck! I don’t remember anyone back in the 1970s “dissing” El Caminos, Rancheros, Subaru Brats, or even Rabbit Pickups. These were all valid vehicle applications and all meet with a degree of success in the marketplace. Honestly, a “real” Pickup in the garage is a wonderful thing for those that can, 1. Afford it along with another vehicle, 2. Those tha have teh extra space for one, & 3. Those who actually have a real need for a “real” truck. If you do not use your truck at least 2 to 3 times a week what is the point of a real truck.
    Outside of that criteria The Ridgeline is an ideal “light-duty” multi-purpose vehicle. It works very well as a passanger car. I actually can carry a decent load (for what it is). It has very good road manners (this is great for a long trip). It is AWD and decent ground clearance so it can handle some snow. You can even tow a light trailer.
    Now unlike a “real light truck when you hit a pothole the whole BOF does not start to shake and shudder. When the bed is empty it does not spin out in the rain.

    Chysler stopped making the SWB Caravan because no one wanted one outside of industrial fleets . With the SWB Caravan you have the choice of passangers or cargo. If you load up on either one you have no room for the other.

    According to the execs that run Chysler you fit the demographics for a Cherokee. As you said the children are gone so they feel you are ready to move up to a fine (expensive) SUV. Haven’t you heard, REAL MEN HATE MINIVANS!

  • avatar

    Last year my wife was pregnant with our 3rd child and we had to get a van. There was absolutely no reason to look at anything other than a Toyota or Honda. None.

    Right on. When you reach this point it’s all about reliability. We only drove Sienna and Odyssey (ended up with Sienna for the AWD). If it were for me, I would’ve tried out the Mazda MPV (this was in 2005) for the smaller size. But it was for my wife, and she wasn’t interested in looking beyond Toyota and Honda.

    I also agree with “zenith” on the ’84 Chrysler being a good size. I think the previous-generation Siennas were the same size. Our ’06 Sienna is ENORMOUS.

  • avatar

    Re: “Last year my wife was pregnant with our 3rd child and we had to get a van. There was absolutely no reason to look at anything other than a Toyota or Honda. None.”

    I too was in that phase of my life 2.5 years ago (3rd baby on the way). However, I just could not put up with paying $25k-$35k on the Toyota and Honda duopoly. Knew that they were excellent vehicles of course, but I refused to buy one b/c cars just cost too damn much these days.

    I did happen to achieve $11k off MSRP on a new Mercury Monterey. Which is actually pretty loaded up minivan. $18.8k out the door. And you know – it’s a great vehicle! Yes, it’s _slightly_ more “trucky” than the others, but it has been totally reliable in the nearly 3 years of ownership. Very powerful. Have achieved 25 MPG on the highway (mileage was a known weakness of the Ford product, but I just keep it at 65 and that helps up the MPG numbers quite a bit). Nobody, I mean, nobody was thinking about a Mercury minivan – hence my incredible deal (which involved walking out over the last $900). To me, a good vehicle at a good price is often good enough (especially when the vehicle is utilitarian). YMMV as they say.


  • avatar

    Is Honda going to try a wagon version of this new accord? It’s so big, I wonder if they couldn’t sell it as a lower cost option to the Odyssey of Pilot.

  • avatar

    Landcrusher :
    October 30th, 2007 at 5:59 pm

    Is Honda going to try a wagon version of this new accord? It’s so big, I wonder if they couldn’t sell it as a lower cost option to the Odyssey of Pilot.

    Needless to say an Accord wagon would have a lower cost than a Odyessy or Pilot. The problem is why sell a -$30,000 wagon when you can sell a more profitable $35,000+ minvan or SUV. Honda and Toyota are not stupid they know that Americans are very loose with their wallets. They know that the majority of folks in the USA are prefectly willing to waste an extra $5,000.00+ to buy more vehicle than they need. We do live a credit society right! What an extra $50.00 per month in payments, no big deal!

    We can keep wishing all we want but the business model is set for both Honda USA and Toyota USA. They are now addicted to the extra profit that “extra-sized” vehicles produce. A wagon verison of such makes as a Camry, Avalon or Accord would only mean less $$$$ for them.

    But come on man, all of us Big Jim, Macho, Marlboro Men Americans need a big rugged SUV to feel secure in our manhood, right.

  • avatar

    Landcrusher- I think Honda plans on selling the Stream in the US
    Personally I’d love a Ridgeline. It’s hardly underbuilt and it’s comfortable.
    Does anyone know if car sales in general are down?

  • avatar
    Steven Lang

    I have to disagree there. We have been experiencing a paradigm shift towards wagons and hatchbacks vs. SUV’s/CUV’s/minivans for at least the last five years.

    To put a demographic on it, there are a lot of folks in their 30’s and 40’s (and millions of others) who consider the larger vehicle classes as little more than porkers that destroy the daily driving experience. I would argue that these folks are more into exhiliration, practicality, and fuel economy than their SUV brethern and are perhaps a little more fashion conscious than a typical minivan owner… not that there’s anything wrong with that.

    To put it another way… it’s becoming increasingly fashionable in the United States to think like a (stereotypical) European. More people are going for five-speeds and six-speeds. Wagons and hatchbacks have made substantial inroads as of late (especially on both sides of the coast), and fuel economy is taking greater precedent over traditional V8’s and perceived gas guzzling marques.

    The world’s certainly changing. Sure there are SUV Sally’s and ‘Bling Blings’ that want all the attention and space on the road. But more folks are looking at these people with genuine pity and contempt.

    Now the driver who actually uses their turn signals… now THAT’S the girl who has it all figured out.

  • avatar

    Sales are in the crapp’er. why because next week gas may cost 4 bucks a gallon.

    Mini-vans are over no matter what, play taps please.

    The big 3 are run by a bunch of moroons with dementia,and are illiterate.they are doing the same stupid stuff that they did in the 70’s during the gas rationing era.they either forgot or can’t read history.

    v-8’s are not the problem, its a hp/weight ratio thing that is killing fuel mileage. take for instance the x-b by toyota. up sized it, same engine 20% worse fuel mileage. kinda like driving a bill board down the road into the wind.

    until they get a handle on fuel cost, sales will be in the red!

  • avatar

    The small Chrysler vans died because the dummies at Daimler de-contented them, cut the options lists so you couldn’t put the content back in even for exta money,and then stuffed the fleets with them to further kill their image.

    If one could have bought a attractive short van at an attractive price, non-fleet sales of SWB vans wouldn’t have declined.

    The solid steel floors of the old Chrysler vans excelled at cargo handling. Cheesy, cheap masonite doors mounted on cheesy, cheap hinges don’t cut it. Getting the seats completely out of harm’s way beats having grease and dirt in the folds of a stow-and-go.

    Whoever ruined the minivan deserves to spend a lifetime riding in a thinly-padded folding seat with grease and grit messing up his clothes and his feet resting on a warped, can’t-quite-close-right-anymore storage cover, vice a solid steel floor.

  • avatar

    …”Barry’s particularly sanguine about Ford Motor Co.; he’s told his clients that The Blue Oval Boyz are heading for a 17 percent hit against their October sales numbers.”

    Ford’s US troubles seem particularly tragic. Hard to believe that as recently as ten years ago, Ford frequently had 5 vehicles in the top ten sales list: F-150, Ranger, Taurus, Escort, and Explorer. Fast-forward to 2007 and the score is zip. How do you let that happen? Consider their dismal record with the minivan. First was the Aerostar, based on the Ranger’s RWD drivetrain. Too heavy and underpowered. Then came the Windstar, following the minivan tune in the Mopar songbook (base your minivan on your bread-and-butter FWD sedan (Taurus) platform). As did Toyota for the Sienna (Camry) and Honda for the Odyssey (Accord.) Except the Japanese benchmarked the US competition and improved upon them. The Windstar was a mediocre minivan based upon a mediocre Taurus. If only Ford had spent some of their “Gold Rush” profits on updating their sales stars, they would not be in the situation in which they find themselves today. Sad.

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