Wednesday, February 28, 2007

The auto industry

I think I bruised a rib over the weekend.  I’m going to get out on the bike tomorrow after work to see how it holds up.  I’m pretty confident that it won’t be a problem, but I’ll know for sure about tomorrow.

 

Meanwhile…

 

The American auto industry is NOT in trouble.  Ford and GM are in trouble.  They continue to build more and more cars and trucks that nobody likes.  Their business model is no longer the “car sales” business, but rather the debt sales business, just like Sears.  The only segment of Ford and GM that consistently make money in good times and bad is their financing arms.

Dalmer-Benz bought Chrysler and is stuck building quality while trying to sell quantity.  They’ve backed themselves into a problem of a sales culture that is used to selling something that Dalmer-Benz is not accustomed to building.  What we’re seeing is some very, very nice Chryslers and Dodges being built, but a public that is expecting to see Chrysler and Dodge price tags.  Dalmer builds quality, but downstream their dealers sell debt.  Mercedes dealerships aren’t having that problem.  They sell quality.  There’s a clear disconnect there.  They should seriously consider rebranding or closing down all together.

Those companies are in trouble.

MSNBC is reporting that Toyota is opening an EIGHTH plant in Tupelo, MississippiToyota isn’t having problems.  Ironically enough Toyota sells cars and trucks still, and not merely debt.  It’s the difference between building and selling quality.  Toyota builds and sells cars that people WANT to buy because they’re good cars.  They may be a little more expensive than their Ford and GM (pos) counterparts, but somehow Toyota manages to sell them.  Odd how that works.  Maybe it’s not so true that “price sells cars” as one of the local debt merchants insists over the radio.  Maybe good cars sell.

The American auto industry isn’t in trouble.  There are at least a couple of American manufacturers (even if the home office is in another country) that are doing quite well by making cars that people want to buy.

Maybe Ford and GM should learn that lesson again.

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