Detroit Out of Ideas - GreenHybrid

Delta Flyer · #1 (**permalink**) 07-25-2005, 08:39 PM

AZCivic · #2 (**permalink**) 07-25-2005, 09:04 PM

Sounds like Peter M. DeLorenzo is all upset about the Big 3 having record sales thanks to their "shameless" promotion. Time will tell if it results in any sort of permanent marketshare improvement or not, but in the mean time it DID result in record sales at a time when GM at the very least wanted desparately to clear out a boatload of excess inventory to make room for 2006 models.

Delta Flyer · #3 (**permalink**) 07-25-2005, 09:49 PM

I think the article mentioned GM needs a higher instead of a lower profit margin to deal with their debt. Their line of vehicles are not on the hot list. Within two years Buick or Pontiac will probably be discontinued like Oldsmobile. Hummer and Corvette stand out, but these are not GM's bread-and-butter like the SUVs had been. The Aztec was not the answer either.

GM needs to introduce models that are as highly thought of as the Camerys and Accords or they will bleed to death.

AZCivic · #4 (**permalink**) 07-25-2005, 11:07 PM

Indeed, GM's problem right now is that they're not selling cars at a profit, but they had a short term problem of TONS of overstock. When you're overstocked, you can't make money on the new cars because dealers don't order any new vehicles when they have plenty of old ones.

What the employee discount programs did for GM was prove that there is life after rebates. GM is guilty of playing the rebate game more than anyone else, and it makes them look bad as a company when they do it - as if their cars weren't enough to make them look bad! With the employee discount program they went basically to flat, no-haggle pricing and cut out pretty much all rebates. If you wanted a car, you could just look up the "employee" price and go to a dealer and pay that price, no haggling, no endless searching to see if you're getting every rebate you're supposed to.

GM has spent quite a lot of press time pointing out that this was extremely effective at quickly reducing their 2005 inventory levels as well as building brand excitement and getting more GM's in the hands of customers. What they're not so publicly announcing is that they may build on the success of this program and expand the flat pricing program to more brands than just Saturn. I think that would be a great way to set themselves apart from a lot of other makers by pushing no-haggle pricing into the mainstream.

JeromeP · #5 (**permalink**) 07-28-2005, 04:31 PM

Take my words with a grain of salt.

I've never liked GM products. Now, for the die hard foreign drivers here, when I say I come from a Ford family and remain very loyal to them, that will comes as a shock. I love my Prius, however when Ford has their hybrid lineup broader than the Escape/Mariner I will definitely take a good hard look.

My personal experience with Ford quality and fit and finish is stellar. Of the big 3, Ford leads at using quality materials, with nice touch and feel and a solid installation. I've never had a door handle come off in any Ford product I've owned or driver, never had anything electrical die unexpectedly or when it rained, and have had basically good experience with servicing Fords, but that has all been done at rural dealerships.

Here is my point. GM is huge. Now, GM and Ford both rebrand platforms for their various divisions. Mercury is nothing more than a rebagged and untrimmed Ford, but everyone knows that, and for the most part, the Ford platform products lend themselves well to being rebagged. However, the rebagging at GM is much more expensive than at Ford. Why? Sheet metal pressing, interior trim changes, complex package differences. The new Buick LaCrosse may sit on the same platform as the new Pontiac G6, but the two have different sheet metal, entirely different interiors, different options and features (the G6 has that multi section sliding sun roof for example). This complexity leads to much greater production costs. If you take a look at the FEH and the Mercury Mariner Hybrid you see the same vehicle, but the differences between the two consist of paint colors available, interior trim colors and combinations, standard interior materials (std. fabric vs. std. leather) different wheels more standard features (which are already available, but not necessarily standard on the Ford product) and the addition of shiny stuff. All of those changes for the Mercury product are not major differences between vehicles, as different sheet metal would be, but are acceptable extra costs for the more premium Mercury product, which commands a slightly higher price and does have a different street appearance, although similar to the Ford.

I don't wish death on GM. Hardly! If GM were to flip over tomorrow, the impact on the national economy would be devastating. GM is just going to have to evolve; it doesn't have much choice. Right now their marketing department is calling the shots, which is why they are selling uninspiring vehicles with dated technology and designs rather than making the capital investment in new designs, better technology and better manufacturing processes. It is easier to sell their current fleet with strange pricing schemes and flashy programs than it is to build truly appealing vehicles.