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Guest Post: September Sales Collapse at GM
With the demise of the Cash for Clunkers program last month, it was expected that auto sales industry wide would suffer, however the car buying public continues to be reluctant to embrace the two government supported automakers, shunning both GM and Chrysler in September.
For the month, General Motors reported that sales nose-dived 45% on 156,673 vehicles sold, while Chrysler reported sales off 42%. Certainly some of these losses can be attributed to the vacuum left by the CARS program, but it is impossible to ignore the monthly sales of their peers.
Cross town rival Ford posted a much better than expected net loss of only 5% and ended this quarter up 2%. Japanese rival Toyota was off 13%. The only major automaker to buck the trend this month was Hyundai and its sibling Kia, both offering smaller and inexpensive vehicles, reporting a increase of 27% and 24% respectively.
After the month of August only showed a drop of -20%, Mark LaNeve (VP of US Sales) was hopeful a turnaround was in the works saying, “…our momentum continues to build on the strength of our new cars” and touted the retail sales turnaround at GM. With the failure to make good on that prediction, along with a drop in retail sales of 46%, Mr. LaNeve conceded that August was “a more difficult month than we anticipated.”
Mr. LaNeve is no stranger to showing optimism when looking to the future, and offered this forecast, “Fortunately, the fourth quarter looks brighter and our year-over-year comparisons should look more favorable…we believe that our four core brands – Chevrolet, GMC, Buick and Cadillac – are well positioned with new products to generate enthusiasm with our 60-Day Satisfaction Guarantee and ‘May the Best Car Win’ marketing campaigns”
Inside the numbers, the hardest hit was GMC, widely considered to be GM’s most profitable brand, sales for the month were off 53%. Chevrolet was off 40%, Buick 33%, and Cadillac enjoyed a nice rebound on the strength of the new SRX’s introduction, off 9%.
If numbers like these persist, one has to wonder what the value of a anticipated summer IPO will be for GM, and what hope the government has to regain any of their considerable investment in this American institution. In the short term, with the continuation of poor results, a major executive shakeup seems inevitable.
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October 1st, 2009 at 5:36 pm
This may put the Volt program in danger..
Truck sales have to be down, the construction market is still flat.. how did Ford trucks do?
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October 1st, 2009 at 5:50 pm
http://online.wsj.com/mdc/public/page/2_3022-autosales.html
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October 1st, 2009 at 5:58 pm
Herm:
Agree. I would think that not only is the Volt program in danger, but that the very existence of the corporation hangs in the balance.
According to a similar story currently up on the MSN news page, Ford F150 sales were actually up year over year.
“Guest”:
I was just wondering the other day what your take was on the “cash burn” situation? At this rate, I would assume that they will run out of money and try to come back to the well fairly soon. I wonder what happens then?
I pray for the survival and recovery of GM, but I just can’t see the products coming which will save them.
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October 1st, 2009 at 6:11 pm
Third?
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October 1st, 2009 at 6:26 pm
I can only speak for myself when I say I will not buy or lease any new GAS only car. I am patiently waiting for my Volt. I hope GM has enough cash to make it to November 2010 or the insight to release Volt earlier.
NPNS!
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October 1st, 2009 at 6:27 pm
I think this validates my statment that the money back program inspired negative confidence sinceit looked desperate. The only good commercials I have seen from GM are cadillac, and they sell image and quality.
GMC is often paired with zombie brands like Pontiac, and its image is unclear. Buick is only a little off course, and can be corrected. Chevrolet needs the most focus and must develop an identity, one assosciated with quality, as Toyota and Honda are the competitors whenit comes to cars.
The Money back marketing runs counter to the quality image, sort of giving the impressionof : “if you get a lemon, and by this ad you know we have lots of them, then we’ll buy it back!” … bad bad idea!
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October 1st, 2009 at 6:48 pm
Too much Gloom n Doom.
Imma go get some beer and go home now….
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October 1st, 2009 at 7:12 pm
Like this is a surprise…hello…..
Not even worth the topic…
They have the bad assets gone and they make tons of money in China.
Got a real topic beyond elementary school….
The economy still sucks, Oil is artificially priced at $70.
Should be $50
Wal Street was bailed out. Main street still broke.
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October 1st, 2009 at 7:14 pm
….I’ll take this one since it is my thread you are asking about, lol. I don’t think I can ‘mess up the vibe’ on this one, (=
——
It is hard to get a solid handle on the cash burn, thanks to GM’s change of heart on their promise of transparency to congress.
Ray Young (GM’s CFO) said this when GM went into the re-org, “As a privately held company, it’s likely we’re not going to disclose information except to the shareholders.” Kent Kresa (GM Chairman at the time) said, “We do not have to file all of the same documents that we do when we are a public company.”
/they have held true to this commitment of secrecy
http://www.freep.com/article/20090603/BUSINESS01/906030336/1002/BUSINESS/GM+set+to+become+a+more+discreet+company
—
We have had nothing out of them at all in relation to balance/income statements or disclosures on cashburn.
GM is desperately trying to right the ship, get its books in order and prop sales up before that IPO…that is why it is coming so quickly. It has to get to market as quickly as it can, because it is worth less every month the process is extended and while sales plummet and cash evaporates. It is that pressure to perform that is likely going to lead to major changes at GM at the top.
One thing is sure, GM will not be sidling up to the government for more cash soon. Even though I would wager they are burning around 1-1.5 billion a month at this level, the government ensured they would not embarass themselves with a early return to the trough from GM by making them flush with cash.
GM is likely still sitting on about 30 billion dollars after coming out of C11 so well funded…and they have already penciled in another 10 billion+ in DoE loans on the next round of grants. Even worst casing GM’s cash flow, we are probably looking at a solid 18 months of continuation.
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October 1st, 2009 at 7:27 pm
2010 Chevy Equinox
A positive story on GM…..
They are making about 530 per day on 2 shifts and plan on adding a third shift Oct 19.
These cars are selling so well in the MD/DC area that they are hard to find. I am working with 3 dealers and have visited 3 others. The story is the same. The vehicles come in and the vehicles get sold. My closest dealer tells me that he orders them and they are sold on the way in. No test drives.
This little CUV is really HOT right now.
I did get to drive one the other week and I really enjoyed it.
*** end of good news story****
back to the abyss…
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October 1st, 2009 at 7:31 pm
I agree Nelson. It’s not a matter of buying a hybrid vehicle at a premium of 4k to 6k or not. It’s a matter of which efficient plug in to buy, which will both get the job done, and fit into the budget. The Volt is turning out to be a very nice balance of efficiency and performance. The rumored 6 gallon capacity of the fuel tank will work out just fine. A $15 fill up once per month is much anticipated .
NGMCO will be taking a large share of the hybrid shopper sales with the non hybrid ICE Cruze. It’s the simple and inexpensive alternative.
The game is about mpg, not about how many electric motors can be attached to a drivetrain. And not about how many formats of FWD/RWD/AWD hybrid EREV combination can be packed into a 50K vehicle.
=D~
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October 1st, 2009 at 8:13 pm
We are all patiently waiting for that day 13 months from now when the Volt will go on sale. Hem and haw all you want, Americans are saving their money until then.
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October 1st, 2009 at 8:17 pm
The 2010 Equinox is a fantastic vehicle and its priced right. Packed with features that most consumers expect will cost more, it is attracting a high percentage of conquest sales to Chevrolet.
As fast as they can build them, they are selling. It’s worth waiting for!
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October 1st, 2009 at 8:29 pm
OK, OK, you all read the headlines – now let’s have a little sanity check. You can make numbers do many things when you crunch them, but here are some facts:
GM Market Share for 2008:
September 08 = 29.1% (a near miracle due to a convergence of inventory, incentives and a late model-year-end event)
YTD 2008 through Sept = 22.3%
GM Market Share for 2009:
September 09 = 20.8% (this with very little dealer inventory in the aftermath of Clunkers)
YTD 2009 through Sept = 19.6%
So, comparing GM’s September 2009 results with CY 2009, they performed better – gaining 1.2 points of market share even though they now have 4 fewer brands and came out of bankruptcy within the past 90 days. You are also comparing September 2009 sales to September 2008, when GM had amazing market share.
Let’s all step back and realize that GM cannot solve every problem within a few months of emerging from Bankruptcy. They are forging ahead with new product launches – I believe the GM leadership knows it is all about product. The VOLT will arrive on time and meet expectations (except, maybe that all 50,000 on the waiting list won’t be able to get one in year 1!). Recent new product launches like the 2010 Chevy Equinox and Cadillac SRX are runaway successes and will only gain momentum in the coming months. Other GM plants are back at work building up inventory. Sales will rebound in coming months – the year over year comparisons are much more favorable.
None of this means it will be easy for GM – but everyone needs to step back and let the new company breathe a little before condemning it.
Go GM. Go VOLT! Bring it on….
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October 1st, 2009 at 8:30 pm
I like the Equinox too, and if I thought I could afford one, I’d buy it.. GM knows how to make a good car or whatever fancies you, but they to wake up. I don’t want to see GM fail, but it appears as if they have 1 fot on a bananna peel, and the other foot in the grave. They are holding on to something, Lets see if that something is strong enough to help them out.
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October 1st, 2009 at 8:34 pm
Speaking of elementary school, a 3rd grader could write a more coherent and gramatically correct post than you just did.
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October 1st, 2009 at 8:34 pm
A financial post…. (grumble)
I’m not too worried about the Volt program.
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October 1st, 2009 at 8:41 pm
I agree. I thought that was bad marketing. Consumers instantly lose trust in the product when you offer a money back guarantee. That guarantee isn’t necessary. The product should stand on its own merits.
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October 1st, 2009 at 8:42 pm
(click to show comment)
October 1st, 2009 at 8:49 pm
The smartest thing GM did w/the Equinox is get it to 32mpg/hwy. I can’t think of another CUV off the top of my head that can beat that (i’m sure someone will post one). They need to update the Buick Enclave efficiency, and its sales would take off again.
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October 1st, 2009 at 9:02 pm
Anyone think Fritz’s job is in peril? I think he’s doing the best he can but maybe it won’t be enough.
GM and Chrysler are starting to run out of excuses and those sales numbers are painful to look at. It’s time to sell cars.
Just don’t know. Not good.
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October 1st, 2009 at 9:18 pm
Well, my point was that you are an obnoxious dimwit, but now I see the error of my ways. The next time I post I’ll try to uphold the high intellectual standards that you have set for the rest of us douches.
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October 1st, 2009 at 9:52 pm
Duh. Drop half the company, go into a major recession and the sales are half. This is not news.
I wouldn’t count on Volt sales to bring GM back from the brink. The volume is too low to do any good. Press the marketing button to ‘turbo’ and get some sales of other vehicles.
The Volt will help get some people looking at GM again. Take those 500 pre-production Volts and show-n-drive them until they are DUST. Parking them in some electric company lot in Virginia is a waste. Bring a dozen down to Cowboy’s stadium and give test rides to the 100k people there some Sunday. Or, even better. Texas Motor Speedway! Heck, bring all 500 Volts!
The dull German guy should not be driving. Cowboy’s cheerleaders. That’s the ticket! OMG the grainy videos will be awesome! 500 Volts making the laps with cheerleaders driving future customers! (Ya may need to recruit some besides Cowboy’s cheerleaders. I’m pretty sure there are not 500 of them. We got plenty others with actual driver’s permits. No, really!)
Need some cash to pay for the trip? Raffle one off. A million bucks easy. 960k profit!
No charge for these ideas. Just sell me one raffle ticket! Yep, I’ll pay for my ticket.
Come on GM. You can do it!
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October 1st, 2009 at 9:55 pm
Putting the last 2 days headlines together, they read:
September Sales Collapse at GM — Top Volt Executive Departs
———
!Oh wait a minute, these two events are TOTALLY unrelated. My bad!
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October 1st, 2009 at 9:57 pm
What I learned here is that Ford is making its way back up to the top. If I had any money, I would buy Ford shares. I think Ford is stealing market share from GM now. Chrysler is pretty much done for. I don’t see any silver bullets coming from their partnership with Fiat that’s going to take market share from the Japanese, Koreans, or Ford and GM.
On the bright side. GM has finally decided to make direct injected engines, a technology that GM has had since the 50’s or something. And as any third grader would’ve predicted, the fact that they can get well over 30 mpg in an SUV has led them to be massive sellers. Drrr. The Buick Lacrosse and Cadillac SRX with the same direct injection technology is enjoying the same sales hysteria! I think pretty soon all of GM’s cars will use these engines. I can’t wait for GM to combine this with HCCI which is coming soon and will offer 15% more fuel economy!
I am also excited to see if they put this in the Gen 2 Volt.
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October 1st, 2009 at 10:05 pm
Meanwhile Hyundai surges up 27% for the same time period, continuing their dominance….
http://www.marketwatch.com/story/hyundai-us-september-sales-rise-27-2009-10-01
I think the memo GM is not getting here is: build smaller, cheaper cars.
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October 1st, 2009 at 10:15 pm
Nelson:
What happens if your current car dies or gets killed?
Will you:
Don’t take it personal, I’m just having fun.
Buy a ‘gas only’ used car?
Buy a diesel?
Take public transportation?
Walk?
Don’t count on G.M. releasing the Volt earlier than normal.
As far as G.M. (and Chrysler) goes, they are getting hammered in the market. I think it’s Ch 11 shock to some extent. I have been looking at new cars lately and I think many G.M. and some Chrysler vehicles have a lot of merit.
Examples:
Chevy Cobalt(and Pontiac G5). They are cute, esp. in 2 door form and get excellent real world mileage. And they’re cheap.
Chevy 2010 Equinox. Very nice smaller crossover, gets 30+ mpg with a 4 cylinder. Very nice interior, I sat in one and the wife was ready to trade the Vibe she liked it so much.
Cadillac CTS. (awesome looking car, very good reviews). The “V” version of it will suck the doors off 99.9% of all cars available today. Almost scary how fast it is.
Chevy Malibu. (and Saturn Aura). I have driven it and it is a very smooth quiet, car with a beautiful interior. I drove a mid grade version too, not fully loaded.
Chevy Camaro. Nothing more to say, asskickncar.
Buick Lacrosse(2010). Haven’t seen one up close yet but the pictures look good, VERY VERY good.
Chrysler products suffer from a fatal interior blandness that needs to be corrected quickly. I rented a Dodge Caravan (2008) for a cross country trip. The unit had 175 miles on it when I picked it up. The ‘Stow n Go’ seats were awesome. Made lots of room for the wife, luggage, coolers, dogs. In my opinion the interior was very functional, esp. if you have kids. The plastic door panels, while not the most stylish, were super easy to maintain and clean, good traits if you haul your little rugrat yard monkeys around. Every road test on it, and other Chrysler brand vehicles say the interior is cheap and plastic(ish) looking. You know the funny thing is it looks almost identical to my 98 VW Jetta. The road test crews those days praised the interior on how ‘germanic’ and ‘business like’ that car was. I guess germanic and business like are no longer good traits to have.
The Dodge Challenger is the best looking car the company has made in 20 years. The 6 cylinder model actually gets good mileage too.
Is it me or do a lot of good cars from these companies go unnoticed?
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October 1st, 2009 at 10:21 pm
Statik,
Since the “carpocolypse” started, have you seen the numbers split so dramatically in-between the brands (or the companies) on a month to month analysis ?
Top 4:
Hyundai +27%, Kia +24%, Volvo +16%, Lexus +12%
Bottom 4:
Chrysler -61%, Saab -73%, Hummer -81%, Saturn -84%
http://current.com/1bmre4c
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October 1st, 2009 at 11:08 pm
That’s why they made the guarantee, to show they believe it will stand on its own merits. The sense of the commerical was “we’re not worried that we have this new money back program”
They want all of the people worried about buyer’s remorse to go ahead and sign on the dotted line anyway, because they’re confident they’ll keep it.
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October 1st, 2009 at 11:17 pm
And that 32 MPG is the STICKER, with 2008+ EPA standards. What will driving it feather footed get you? 36 MPG? Effin sweet car, and i don’t normall like SUV’s or crossovers. But it does look rather feminine in anything but black.
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October 1st, 2009 at 11:33 pm
If Hyundai and Kia delivers quality product and service to their customers (and I’ve heard some positive comments from past owners), they could be the next Toyota and Honda like in the 1970’s and 80’s….quality at a lower price. The recession has persuaded car buyers to give them a try.
More major automakers means less more market share for each one…and/or companies going out of business. Also it could mean an end to the Coke/Pepsi business model for the US auto industry…where 1-3 companies get to control the US auto industry? When the US government (or the California state government) requests something of the auto industry, it would be more difficult to keep all of the companies on the same page to oppose it. Especially if one or two companies have already made the capital investments to comply or have popular vehicles that already meet a new requirement…like lower harmful emissions.
The US automakers had better get their “heads out of the sand”.
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October 1st, 2009 at 11:52 pm
The numbers are very dramatic, and certainly I’ve never seen anything like that since the ‘carpocolypse; began. You do have three very big factors on your list to account for it.
1.) I think the cash for clunkers really pulled forward more of the weaker brands future sales into August, or from the ‘never were going to happen at all’ leaving a greater gap for them to fall as a percentage in September.
ie) not many people wanted a Chrysler POS, but whoever was a ‘maybe’ or fence sitter did indeed make that purchase August, and that brand’s potential pool of buyers became much shallower for the next few months to come.
2.) Dead brands. You can’t really count Saab, Hummer and Saturn numbers as they are all dead/virtually dead, extremely low volume sellers. I see the bottom 4 as more like (10K ish minimum volume):
Chrysler -61%
GMC – 53%
Dodge – 42%
Chevrolet – 41%
Sidenote: Have to be careful to seperate ‘Chrysler’ the brand at -61, with Chrysler the company at – 42%
3.) Hyundai/Kia. The real story to me in all of this is these guys. (Lexus is doing well right now, but the volume is low that it is skewed by the new RX selling 50% of the brands total, same can be said of Subaru’s resurgence this year).
Hyundai/Kia are right in the sweet sport of the market, offering low cost/high value, and introducing good product that people actually want.
Accent is priced right, Kia sold a ton of Optimas, the ‘new’ Forte sold well, the Soul introduction has been ‘plus’ business, the new Elantra is very well received and the Genesis is as close to be without a peer in the market at its price point as you can get (300HP, RWD sedan/coupe).
I think the huge divergence is really two incredible stories playing out. Fallout from the decimation of 2/3rds of Detroit auto, and Hyundai really hitting the ball hard.
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October 2nd, 2009 at 12:10 am
I thought it was an 8 gallon gas tank …
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October 2nd, 2009 at 12:15 am
Hyundai and Kia up by 20 percent plus. What can I say. I’m really glad I bought a new american car a few years ago. But I’m sure like most people I would find a way to blame detriot if I bought a Hyundai. I’m all for international trade as long as its fair. The cars are just the begining are we going to have anything to sell to the world in 20 years other than Mcdonald’s and Wal-Mart. Think people we have to wise up to what is happening, this is just the begining. Fight the good fight you can do it GM!
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October 2nd, 2009 at 12:17 am
… that’s going to take market share from the Japanese, Koreans, or Ford and GM or the Germans.
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October 2nd, 2009 at 12:18 am
It’s tough to fight off the doom and gloom.
The one thing keeping me smiling is the incoming Camaros that were ordered months ago. They are coming in pretty regular now. And customers are still happy to get one for about $1000 to $3000 over MSRP.
Somebody messed up on our Equinox orders, so we are way behind on getting those in. That sucks too. I’ve been getting at least 2 calls per day wanting to know what we have in stock.
Hopefully, Obama will focus more on job creation so some of us can afford a new VOLT when they finally get here.
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October 2nd, 2009 at 12:20 am
Regardless of year over year sales, GM posted a 20.8 market share. I think that’s very respectable given their low inventory levels. Dealers can’t even get their most desirable models. (Camaro, Equinox, etc.) They posted a 29.1 market share in September 2008 due to heavy incentive spending, which explains the dramatic year over year decline.
http://online.wsj.com/mdc/public/page/2_3022-autosales.html
GM had to ramp up their production earlier this month in response to dealer demand. That’s a very good thing.
http://www.detnews.com/article/20090918/AUTO01/909180393/1148/rss25
As far as consumer sentiment about “government motors,” according to consumer reports, there’s been a resurgence of “Buy American” sentiment from consumers. Ford has benefited the most in terms of public perception. But GM is also getting a second look. (6% more consumers are considering their cars than last year).
http://www.consumerreports.org/cro/cars/new-cars/news/consumer-reports-survey-car-buyers-are-thinking-american-brands/overview/index.htm
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October 2nd, 2009 at 12:25 am
When the “cash for clunkers” rebates came out, I felt the real time to buy a car will be when the new technology (electrics) are on the market. Maybe many more people are waiting and a pent up demand will be for the Volt and all the other truly efficient cars. I’m confident there will be the demand.
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October 2nd, 2009 at 12:28 am
GMC is around only to allow the non-Chevrolet dealers (Caddy, Buick, etc.) to sell trucks.
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October 2nd, 2009 at 12:43 am
People realize that this ‘article’ is just about US sales, right ?
In the second quarter of this year, GM sold 72% of its global sales outside the U.S.
GM already sold 3.55 million vehicles in the first half of 2009 – this “156,673 vehicles sold in September” is just for the U.S. market.
I haven’t found the global sales figures for September, but then, neither did this “Guest Poster”.
——————————
The Chevy Cruze (a globally-developed compact sedan) is already on sale in Europe, Australia, Africa, and is coming to the U.S. next Spring (6 months from now).
http://en.wikipedia.org/wiki/Chevrolet_Cruze
GM is readying a facility in Lordstown, Ohio to manufacture the North American version of the Cruze. Other production sites consist of Bupyeong-gu, Incheon, South Korea; Saint Petersburg, Russia; and Shenyang, China.
Perhaps they should have released some in the US by now; that might have helped September U.S. sales figures.
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October 2nd, 2009 at 1:10 am
So is government sponsored bailout working like you thought? I think the real deal is people don’t want to buy a car or truck from a bankrupt company and all the government’s money isn’t convincing them of a bright new future. The patriotic buyers are going Ford and the rest of the traditional value minded buyers are going Korean. Some of the traditional domestic car buyers are just waiting it out to see how it all shakes out. This is a crisis tailor made to help Hyundai out. There really is no other car company positioned to take advantage of this mess quite like Hyundai. I really don’t think it’s so much that Hyundai has amazing product as it is that they don’t suck and they’re cheap. Right place, right time.
Sadly for me and millions others, America is dying and is not coming back.
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October 2nd, 2009 at 1:19 am
No… just be reasonably priced, don’t be bankrupt and don’t suck.
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October 2nd, 2009 at 3:58 am
GM needs the Cruze and maybe another small car out like the Spark to help drive up volume. But in general I don’t think volume matters as much for GM. Right now the important bit is to keep the company afloat. Profitability matters more.
As for Chrysler, their lineup has been pretty dismal for some time now, and they haven’t really updated it much with new product. I don’t see it surviving very long without some major changes.
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October 2nd, 2009 at 3:59 am
Chevrolet is number 2 in the list of the most popular car-makers in my country.
The first is Ford, but they are expected to loose their position, because they announced ~30% (omg!) price increase on Ford Focus (so Focus will cost more then Cruze, Chevrolet is launching).
Hyundai and Reno are lurking close.
All of these companies have factories inside my country.
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October 2nd, 2009 at 6:14 am
It’s all in how you sping the numbers. If you look at it one way, GM’s market share was up 1.2% in September versus their YTD share. Also, these are total GM sales, including dying brands Saturn and Pontiac. Additionally, GM didn’t ramp up production soon enough to take full advantage of CFC.
We need to see numbers with Pontiac and Saturn pulled out of the mix to assess GM’s performance this year and going forward.
Of greater concern for GM, is their lack of presence in the top 20 vehicles by production volume. Also note, for those “hybrid are only niche impractical vehicle” spewers, the Prius is in the top 10 by volume.
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October 2nd, 2009 at 6:17 am
Herm, Noel –> The Volt program has such a high profile now that my guess is that it will continue so long as gm itself continues. The question is how much the schedule and the production volume is being held back. Most likely there will be a few in 2010, but how long it takes after that for there to be any real production volume. Let’s hope for no delays or reductions at all. As for the corporation, it will survive until at least the next presidential election, so we should have some “wheels on the road” well before then.
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October 2nd, 2009 at 6:30 am
Hi Statik. Nice to “see” you.
You have been missed.
I am one who believes Hyundai makes an excellent product at a very affordable price. I currently own two Elantras. They both run great.
GM does not have a good name for quality. There is no doubt they need to change that. That is why I strongly believe they should not rush the Volt into production. Very thorough testing must be done. God knows GM detractors are going to jump all over any fault with the car.
There can’t be any faults or the press will vilify them.
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October 2nd, 2009 at 6:31 am
Dmitrii, what is your country?
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October 2nd, 2009 at 6:35 am
DaV8or
Let’s not go off the deep end. America is not dying, even though the world is becoming a more competitive place. In manufacturing we hold our own as far as our share of the world’s production. Yes, production of consumer items has mostly moved elsewhere where the labor costs are lower, but larger, more complex, and more expensive products still remain dominated by US companies. Not to mention those versatile things that we all use, like plastic bags.
I don’t minimize the importance of the auto industry, nor the quality of the best of what is made here, but autos are not the only fish in the sea.
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October 2nd, 2009 at 6:45 am
I have been reading about the Equinox. Some people have gotten more than 32 mpg with good driving. Others, however, report less. An article in Car and Driver states that they spent most of the test drive with the pedal to the floor and they averaged 18. Many other drivers have reported 29-30 in mixed (mainly highway) driving.
The 32 mpg from the tests includes the roof rack and is an average value between tests with and without the “Eco” button on. The Eco button is supposed to increase your mileage a little. I would just leave it on…
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October 2nd, 2009 at 6:48 am
DaV8or:
Unfortunately, the bailout does seem to be playing out very similar to my thoughts on it (which is not good). One could argue that the results have been exasperated by the extended recession and subsequent further degredation of the auto market….but the reason ‘why’ is moot, it is what it is at this point.
Your right that the economic conditions and the point of Hyundai’s turnover of product is practically the perfect storm of good timing. The CFC coming along is a good example of that. People that really could not afford to get into any car, came to Hyundai to pick up their $4,900 cars. You can bet no one is bad mouthing that product to their friends, lol.
I do think Hyundai has some fantastic product, I went out a drove the 3.8 Genesis Coupe, and the Soul (at Kia) and they were both a lot more than I exepected. I will say I am saying that in context, meaning GM has ‘better’ product…but the fact is that comparable product is not priced anywhere close to Hyundai. I don’t think GM is alone in trailing Hyundai in this manner…Hyundai has no peer right now in the North American market at the low end. (imo)
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October 2nd, 2009 at 6:55 am
Chrysler can survive on 300s and Rams with no problems. These are high-profit low-volume vehicles. The minivan (lol, not all that mini) also sells well. Some excitement also still exists for Challenger and Charger.
Chrysler can bump along for some time just staying the course. With gas at $2.20, these big V-8 vehicles are not all that bad.
Imho, Fiat should not use the Chrysler and Dodge badges for some mini-cars. They should keep the HEMIs as they are.
The electric jeep looks pretty good. Wheel motors for AWD could be a killer app.
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October 2nd, 2009 at 6:57 am
I agree with you about the electric jeep.
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October 2nd, 2009 at 7:12 am
Sovi… Russian Federation
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October 2nd, 2009 at 7:34 am
Who would have thought Hyundai would be surging to be such a formidable competitor? If anyone remembers their very first cars imported to the U.S., they were pretty much a running joke. That has since changed about 180 degrees. What I struggle to understand with Hyundai is how they can make any profit on already low priced/low margin small cars, and all the while fight the difference in currencies? This fact is hurting Toyota, Honda, Nissan etc. in models they import to the U.S. That is a huge incentive to build the cars they sell in the U.S. market, in the U.S. Hyundai already makes the Sonata and Santa Fe here, but I think all of the rest are imported, (am I correct?). I wonder if more U.S. factories are in Hyundai’s future?
Regarding your comments about the Volt needing to be without faults Rashiid, I think that is something that can’t be stressed enough to GM. They have to do everything better, faster, and less expensive than everyone else. I’m hoping they are up to the task.
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October 2nd, 2009 at 7:40 am
Thanks Dmitrii.
Wow. I didn’t expect Chevy to be number two there.
My guess would have a German car maker. Can I ask what is first?
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October 2nd, 2009 at 7:50 am
I can’t wait to see the Volt.
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October 2nd, 2009 at 7:50 am
Schmeltz,
Being in this position makes it all the more difficult for GM. There isn’t any room for error. I can’t stress enough the importance of making the Volt perfect, all the while knowing that perfection is impossible.
I know the press would love to trash them on this.
Also, I too remember Hyundai in the beginning. They were in the same class as the Yugo. Total junk. I am shocked by the complete turn around. But it makes sense. They have a better warranty than the others. Those warranty costs would kill them if those cars broke all the time. It is cheaper for them to make the cars right the first time.
My 2002 Elantra is still going strong and should hit 200,000 miles in a week or two. That’s why I bought another one for my wife.
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October 2nd, 2009 at 7:53 am
I don’t agree with your last statement. I see some great products coming out of GM but the simple fact is, if the public is unsure about being able to put food on the table, a new car or truck no matter how great it is will be the very last thing under consideration to purchase. The cash for clunkers program turned out just as predicted, a very stupid idea that did a lot more damage to the auto industry and the publics pocket books than any good it created economically.
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October 2nd, 2009 at 7:56 am
Didn’t some former executive say something like “No one will buy a car from a bankrupt company”?
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October 2nd, 2009 at 8:07 am
I disagree. I like the new return program and would certainly consider buying from GM over Honda or Toyota because of it. The problem is not the products standing on their own merit. We all know that GM is now producing some of the best cars on the market. The problem is not the return program. The problem is the public is not willing to take a chance on not having $200, $300, or more in monthly loan payments when they can’t even depend on having a job tomorrow. September job losses accelerated to 263,000 with only 78,000 new jobs gained. As long as the losses outweigh the gains, there aren’t going to be that many big ticket items that depreciate sold until this changes.
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October 2nd, 2009 at 8:10 am
Korean manufacturers are on the march for sure.
They produced junk years ago just like most Japanese products were junk prior to the late 70s.
Think about junk electronics from the Korean firm Goldstar 15 years ago. Now they have changed the name to Samsung and make products that rival the Sony’s and Toshibas from Japan.
Next up, China.
It’s hard to imagine GM keeping 20% market share once China is fully up to speed and selling cars in the US.
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October 2nd, 2009 at 8:10 am
I wouldn’t say until then. I would say until the economy turns around. If that happens to be the same time, the Volt will sell like crazy along with many of GM’s other products.
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October 2nd, 2009 at 8:12 am
Statik-
You are ever the master of irony. Now that GM is a private corporation they needn’t publish the same data they did when they were a ‘public’ corporation.
Exactly too rich to fathom.
What is ever going to make GM profitable?
What is going to ameliorate the Volt pricing problem? GM’s competitors will easily overtake their market from the bottom side.
When GM took the Federal teet, they were literally finished as a capital enterprise and the sham of an IPO won’t restore their legitimacy.
A while ago, just before the clunker travesty, I went to see new Malibus. Nothing under $22K, $24k for the higher mileage. I was the only customer there for 45 minutes;the length of my stay. Also went to KIA. The place was humming; four people taking test rides; we drove three; I liked the Soul; Forte looked good.
I think it’s over for GM. Many citizens won’t consider their cars because of the government buy out which is a sop for the UAW.
Been tracking the Volt on this site for years but it’s looking like a fizzle to me. Wish they would spin off or sell Voltec to a real company.
PS I bought a used Malibu cuz I don’t want to buy a foreign car. We only have Ford to choose from and I once owned an Aerostar. That cured me of Ford products. Guess I’ll be walking soon. Or maybe I can just do old LeSabres.
Welcome to the dimming of America.
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October 2nd, 2009 at 8:18 am
It appears GM is doing a great job at being better. I still haven’t seen anything that captures my interest like the Volt and its technology. Faster, well I think they are falling behind on this. Though they are still on target, they need to work towards a full production releast in 2010, not a low volume release. And for less expensive, well I think they are doing the best job they can considering this is brand new technology; plus 32K after rebate isn’t far off a fully equipted Prius which is – 32K and doesn’t have the rebate. Besides, I don’t want to own an egg.
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October 2nd, 2009 at 8:47 am
I’m excited about the Volt, but really am a Ford fan at heart. (Can’t kill my Focus, no matter how hard I try.) It’s great to see that people are realizing the quality of the blue oval’s new offerings and great to see the Fseries widen its lead over Toyota again.
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October 2nd, 2009 at 8:50 am
Unfortunately, the most common response to failed government meddling is more government meddling…
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October 2nd, 2009 at 9:01 am
“Been tracking the Volt on this site for years but it’s looking like a fizzle to me. Wish they would spin off or sell Voltec to a real company.”
THAT is the best idea I have seen printed on this site. The rest of GM can fold or just go under, as far as I am concerned.
What would be really neat is to see someone buy up the technology for the late 90s Chevy Monte Carlos dirt cheap, and start making and selling them dirt cheap. That’s the stuff economic recoveries are made of.
In lieu, we get misguided government meddling, followed upon by more government meddling after the government meddling doesn’t work as planned.
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October 2nd, 2009 at 9:05 am
I frankly do not understand why people are so troubled by those sales figures. GM is going through some fundamental changes and the goal is to become the best auto company not the biggest. It is pretty obvious that when one makes comparisons with last year sales, there will be a significant drop.
GM needs to focus of a few brands and execute very well (and they can). The Volt initiative is an example of the innovative thinking that GM is capable of.
Go Volt.
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October 2nd, 2009 at 9:10 am
I should have been more specific. The America I knew and loved is dying. Something much crappier will still be around.
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October 2nd, 2009 at 9:15 am
Yet MORE proof that Progressive Keynesian Central Planning NEVER works long term. We may get that short-term cocaine high, but there is always an even higher PRICE to pay.
Learn something valuable at http://mises.org/
There is a $10 Trillion withdrawal depression storm coming!
(thanks Congress)
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October 2nd, 2009 at 9:21 am
Number one is Ford.
Reason is simple: Ford, Chevrolet, Hyndai and Reno have its own factories inside Russia. They assemble cars here – so they can avoid customs taxes.
But this is in my region (Russia is very big country). In the East of Russia, you can find only Japanese and Chinese cars.
Compared to our national car manufacturer (which is alive only because of tax policy and government donations existing since Soviet Union times), all of them has incredible quality.
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October 2nd, 2009 at 9:23 am
This brings up an interesting point.
At $32K, is the Volt going to be fully equipped?
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October 2nd, 2009 at 10:08 am
DaV8or:
Alas, I feel that there is much in what you are saying. I truly fear for the future of my grandchild.
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October 2nd, 2009 at 10:10 am
statik:
Many thanks for responding. It is good to see you posting here. It really adds value to the blog, IMHO. Best regards.
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October 2nd, 2009 at 10:19 am
JeffB:
If things go on as they have been, soon the Chinese car companies will do to the Korean car companies what the Korean car companies are now doing to the Japanese car companies. Which is what the Japanese car companies long since did to the U.S. car companies.
This pattern has already been seen in most consumer goods, it just hasn’t played out in the car business yet. I wonder who’s next? Elbonia, if you believe Dilbert.
All of which just reinforces DaV8or’s comment above. We have to find ways to deal with this challenge, or DaV8or’s prophecy will no doubt come true.
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October 2nd, 2009 at 10:22 am
MDDave:
PDNFTT. It’s a total waste of your valuable time and energy.
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October 2nd, 2009 at 10:24 am
LeoK:
God send that it shall be true!
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October 2nd, 2009 at 10:33 am
Dimitri:
It is really great to see you participating here. Thank you.
It reminds me, once again, of Jean-Charles Jacqemin’s famous comment about the promise of the internet to allow people around the world to communicate and cooperate, and to bypass the propaganda and disinformation provided by our respective political systems. An opprotunity which can clearly change the world for the better.
It has already been very educational to see your point of view. Please continue.
Rashiid:
Good job!
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October 2nd, 2009 at 10:47 am
Bill:
Well, the $64 billion dollar question is, can they get these new products to market and selling in volume before they run out of cash again?
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October 2nd, 2009 at 10:49 am
statik:
IPO? LOL!
Lead balloon ain’t in it.
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October 2nd, 2009 at 11:58 am
Particularly when it is additive to problems and deficits generated by lax regulation, and an ill-advised tax cut coincident with the start of an unnecessary (and poorly prosecuted) war.
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October 2nd, 2009 at 11:59 am
But Elbonian made cars would actually require a whole new slingshot-and-mud infrastructure that we just can’t afford to build in this country right now.
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October 2nd, 2009 at 12:11 pm
I would by the least expensive used car I could get to hold me over until the Volt is available to buy.
NPNS!
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October 2nd, 2009 at 1:19 pm
The Volt program exists because GM bet heavily on a good idea that could leapfrog Toyota. You wouldn’t have had any Internet multi-millionaire bet on this, it’s too much money for a one-shot company. Only in the context of a company that sells many millions of vehicles per year, could such a bet be made.
A private startup company, like Tesla, would have used more off-the-shelf components, not have pushed suppliers to advance the state of the art of lithium-ion cells, would not test the battery for years and offer a long warranty, and would have rushed a product to market, built mainly by another real auto company, to get a quick ROI.
I wonder how those 100’s of thousands of people that still have auto industry jobs feel about “government meddling”. I myself wish the government would stop meddling in the free market, and hiring up good engineers to make $100 billion weapons systems that wind up being used on guys with no high school education carrying Kalashnikov’s. If the best American engineers worked on autos and planes, rather than tanks and unmanned drones and nuclear weapons, we wouldn’t be seeing Europeans and Chinese buying up the dying parts of an industry Americans pioneered.
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October 2nd, 2009 at 1:22 pm
Particularly when it is additive to problems and deficits generated by lax regulation, and an ill-advised tax cut coincident with the start of an unnecessary (and poorly prosecuted) war.
——–
Lax regulation – you mean like the democrats who balked at additional oversight for Fannie Mae and Freddie Mac ? Who said that Bush’s tax cut was “ill advised” – I valued MINE a great deal !
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October 2nd, 2009 at 3:22 pm
You can think your policies are superior. You can lecture everybody else. Try and shove your ideas down everybody else throat. Discount what they have to say and think your making progress, but when at least half the country disagrees with your method. You have a problem. Don’t discount how unhappy people are about these bailouts and other policies. If the two groups don’t start working with each other. Your means will fail. Just like GM. Oh and I’m not a racist or want people to die and I’m not against keeping the earth clean.
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October 2nd, 2009 at 4:53 pm
Geronimo:
Amen brother. Preach on. +1
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October 2nd, 2009 at 11:14 pm
Q&A with Chevy Volt designer Bob Boniface
http://video.search.yahoo.com/video/play?p=Bob+Boniface&ei=UTF-8&fr=yfp-t-501&tnr=21&vid=0001533866909
=D~
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October 2nd, 2009 at 11:45 pm
Started drinking early, or you’re in another time zone ?
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October 5th, 2009 at 9:32 am
Everyone here was warned this was coming. 30% of the USA have vowed to not buy cars from GM/Chrysler while the government owns them.
With Hyundai and Ford surging against Toyota and Honda, GM looks doomed. Insiders at Chrysler already knew they were doomed and had no plans past 2012 at the point when they should have been designing for 2014, but our lousy politicians put them on life support anyway.
I feel bad for GM. They should have said no to government money and looked for outside financing or buyout. After seeing Penske step forward to save Saturn, he might have bought most of GM too. Maybe he still will, but by then it might be too late.
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October 5th, 2009 at 9:33 am
note: I posted this above in a reply…
Everyone here was warned this was coming. 30% of the USA have vowed to not buy cars from GM/Chrysler while the government owns them.
With Hyundai and Ford surging against Toyota and Honda, GM looks doomed. Insiders at Chrysler already knew they were doomed and had no plans past 2012 at the point when they should have been designing for 2014, but our lousy politicians put them on life support anyway.
I feel bad for GM. They should have said no to government money and looked for outside financing or a buyout. After seeing Penske step forward to save Saturn, he might have bought most of GM too. Maybe he still will, but by then it might be too late.
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October 5th, 2009 at 12:54 pm
Geronimo,
I wish I could agree with you, but I don’t.
If GM had attempted to leap frog Toyota 10 years ago, when Toyota was first rolling out Priuses, it would be a viable business model today. Unfortunately, what took place at GM is typical of what takes place at many large bureaucratic institutions: an awful lot of red tape, the usual dose of 20/20 hindsight, and slow or no responsiveness or vision leading forward.
I find your claim that a company like Tesla would use off-the-shelf components without pushing the technological envelope very interesting: are we to assume, therefore, that Tesla is building BEVs with 100, 200, and 300 mile ranges with off-the-shelf components? If so, that harms your case, rather than strengthening it. In this case, GM should have been able to do the same — and didn’t.
With regard to the hundreds of thousands of people who still have their high priced, unproductive positions thanks to the government bailout, please consider the hundreds of millions of productive taxpayers who will be paying interest (and/or inflation) on those handouts for years if not decades to come. You cannot make an unproductive organization competitive by throwing money at it. Instead, what is needed is a fundamental market correction, and if the goal is to have those hundreds of thousands of people earning their salaries and contributing, the market correction needs to be allowed to occur.
Finally, you did not address my point that in a true market correction, Voltec and other technology (if viable) would be purchased by someone better prepared and equipped to bring it to market. GM’s plan to make 10,000 units per year and lose money on Generation 1 is indicative of a lack of confidence, along with other issues I have already pointed to. Again, if GM were a game-changing corporation, it wouldn’t have dug itself into this mess.
While I disagree that it is productive or beneficial for the taxpayer to try to dig it back out again, I hope that I am wrong, at least regarding the worst of probable consequences.
Respectfully,
Dr. Ibringdoh
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October 7th, 2009 at 7:46 pm
Thanks Statik, I have been wondering what the “cash burn” is. I wonder what the headline will be the summer after next?
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October 7th, 2009 at 7:59 pm
We will just have Barny Frank hold the loan. (Just kidding, I am a few days late to this thread, Ha Ha, though you never know) Good news is my wife just started her new job. 3 layoffs between us in the last year. Been tough.
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October 21st, 2009 at 8:47 pm
GM was the only manufacturer to have three vehicles in Cosumer Digest Best Buy in 2009.It included Silverado,Malibu,and Traverse,all are outstanding vehicles and are selling well!GM has made vehicles since 1908 ,long before these import companies came.GM has survived near bankruptcy in 1908 and 1920,WW1,WW2 and all the foreign competitors.GM has been number one in US sales ,every year from 1931 to present.They take alot of criticism from foreign car buyers,but GM remain number one in sales.If the foreign cars are so great ,why are not they number one, and if GM is so bad ,why are they continually number one in sales?
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