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- Luxury: The Next Bubble To Pop [view article]
- Google and Apple Defy Declining Customer-Satisfaction Trends [view article]
- Brand Names: Important, But Not Key to Investment Decisions [view article]
- Is One Automaker Default Almost a Sure Thing? [view article]
- New Auto Sales: Up From June, Down From Year-Ago [view article]
- Leasing and the Big Three Automakers [view article]
- Global Warming Up to a Hydrogen Economy [view article]
- May Auto Sales: What Went Wrong for the Automakers? [view article]
- Plunging Auto Sales Create Opportunity for OEMs [view article]
- Real Prices for New Cars Keep Going Down [view article]
- How Gas Price is Affecting Pickup Trucks [view article]
- Detroit: The End of an Era [view article]
loading ...Recent DCX Articles
- Luxury: The Next Bubble To Pop
- Google and Apple Defy Declining Customer-Satisfaction Trends
- Brand Names: Important, But Not Key to Investment Decisions
- Is One Automaker Default Almost a Sure Thing?
- New Auto Sales: Up From June, Down From Year-Ago
- Leasing and the Big Three Automakers
- Real Prices for New Cars Keep Going Down
- Lexus and Chrysler Sign Onto eBay Motors
- Plunging Auto Sales Create Opportunity for OEMs
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How Gas Price is Affecting Pickup Trucks
on Jun 08, 2008| by
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Luxury: The Next Bubble To Pop [view article]
I agree--the uber-rich market is limited here in the US to the 50,000 or so you posit, and many uber-wannabes are getting hammered in this market.A recent piece in the WSJ on the Greenwich real estate market confirms this. And since this economic tsunami is centered within the banks and brokerages--two huge engines behind uber-wealth creation--it only stands to reason that these former masters of the universe are going down into the financial foxhole with the rest of us. Layoffs on Wall Street this year are in the tens of thousands, with no end in sight, and Mayor Bloomberg has already warned of tough days ahead for NYC as a result. Reply
Google and Apple Defy Declining Customer-Satisfaction Trends [view article]
Sorry... I have to disagree.... I rented a mid-compact GM ""something&... in Hawaii... It seats five and had room for luggage... It really was a plasticky poorly made vehicle and suffered pretty bad gas mileage for the week we drove it. Compare that to the Fiat diesel we rented in Italy. No comparison... The Fiat wins hands down... Nor did it spew clouds of black smoke or clank like you have a bad case of rod-knock like American diesels seem to do. In fact it was real peppy and smooth.Then look at engine life expectancy. I was looking at buying a used Mustang, but settled on a used BMW. Why? For the same price I found that the life expectancy of the Mustang engine (based on anecdotal info...) was a little over 100K miles, whereas the BMW would run to 250K miles....And the mileage was better.
I suggest you read the article in Wired where Jay Leno explains what is wrong with American manufacturers.... In essence he notes that American manufacturers penalize buyers for buying a cheap car. As he notes, there is no reason why a cheap car can't also be a quality investment. And, I agree.
jegan ;-) Reply
Google and Apple Defy Declining Customer-Satisfaction Trends [view article]
As an analyst in GM's Quality department, I spend the better part of each working day immersed in quality and customer satisfaction data. Given the dramatic improvements I've seen in GM's product portfolio over the past few years I was puzzled by the results of the ACSI. Granted, GM still has some less than stellar products in it's portfolio that are nearing the end of their lifecycles but it would be hard to argue that the recent crop of new products such as the Chevrolet Malibu, Cadillac CTS, Buick Enclave, Saturn Aura and Outlook, etc. aren't indeed class leading products. Don't take my word for it, read the media reviews or better yet, drive one. Understandably, I had a difficult time rationalizing significant improvements in GM's portfolio with subsequent declines in customer satisfaction so I did some investigation. It turns out that the declines in the ASCI have nothing to do with the product itself. Quite the contrary actually, since customer satisfaction with GM products, according to the study, remains high, along with value for the money. What drove the scores down this year are consumer perceptions of the financial condition of GM and the other domestic automakers (big surprise!) and perceptions of poor fuel economy. Perceptions of poor fuel economy don't necessarily reflect reality either. GM currently has 17 models in its portfolio that get 30+ mpg according to the EPA, more than any other automaker. ReplyBrand Names: Important, But Not Key to Investment Decisions [view article]
I would disagree with the notion that American cars are popular overseas, and would instead say that there are some instances where American cars do quite well overseas but they aren't a dominant brand world-wide.Yes you do see a lot of Ford Mondeos in the U.K. (they're as ubiquitous as Accords) but the overall mix is heavily slanted towards the European brands.
Ditto for a lot of other countries, you may see an American model doing well but not enough (for me anyway) to say that foreigners prefer American.
-M Reply
Brand Names: Important, But Not Key to Investment Decisions [view article]
I'm nearly 56 and remember gas lines well. But gasoline was a pittance then compared to now.I believe that the slow decline of the American auto industry began back then, when the industry stubbornly refused to change its product mix to favor smaller vehicles.
As we now see, nothing much has changed. Reply
Brand Names: Important, But Not Key to Investment Decisions [view article]
...Except even though people thought the Japanese cars in the 70s and 80s weren't well-built, they still bought them in droves because they got BETTER FUEL ECONOMY.This year it's history repeating itself-- People buying Toyota Corollas that can get 30mpg COMBINED (not just highway as GM and Ford have been advertising) because of $4/gallon gas.
Ford and GM needs to realize that not only do they need to build cars that are put together well, they also need to make cars that are MORE FUEL EFFICIENT than the Japanese if they want to regain market share in North America.
The situation in Europe for Ford is not applicable here in North America. Ford is doing well in Europe because they have less-stringent emissions laws, which means Ford's fuel-efficient diesel cars are a big hit there. They can NEVER sell those diesels as-is here, because they don't meet the EPA's Tier2 emissions standards.
The situation for GM in China is also NOT applicable for the North American market-- GM is doing well in China because gas is still cheap there at $2 a gallon, and the noveau-riche Chinese middle class don't mind buying gas-guzzlers because of that.
Until one of the Big Three can produce a 50mpg car that is street-legal in the U.S. with comparable reliability and cost about the same as the Toyota Prius, they are not going to gain back market share in the era of $4/gallon gas.
(Don't bother mentioning the Chevy Volt. Sucker is going to cost $40,000 and by the time it comes out Toyota will have its 3rd-gen PHEV Prius with similar 40-mile-electric capability in the showrooms for $30,000.) Reply
Brand Names: Important, But Not Key to Investment Decisions [view article]
You guys must be young ... very young. I am 49 and I remember in the 70's and early 80's how the Japenese brands were considered cheap and not well put together. However, through tremendous improvements and great marketing (R&T, MT, and C&D have been a HUGE part of their success) have now turned the tables.Through better products (which they now make) and some better marketing (they still suck) the American Brands can once again be considered desirable.
Around the world, if you didn't know, American Car Companies are considered desirable. Ford is HUGE in Europe (of course they sell a better looking car their) and GM sells more Buicks in China than they do in the U.S. (yes that's true.) We in America think it's it's passe to drive American and fawn over the Japenese cars (I know this - I've owned 5 new Honda's and Acuras.) I've now bought American in the past 11 years and have NOT been dissappointed. They are every bit as good as the Japense versions.
Now in JD Power the American Cars have finished 4 out of the top 12 spots. The Japense have 4. The Germans 2 and the South Koreans 2. It sounds like, to me, we're building the better product. Now for the Brands to catch up! It will happen. Reply
Brand Names: Important, But Not Key to Investment Decisions [view article]
First thanks for reading (as always).Deep Value: I think that if you have two companies selling similar products and company A cannot demand either a higher premium and/or has customers who will refuse to buy the products of company B, then you cannot say they have the stronger brand.
Now it's hard to make general statements without having a specific product in mind, but really you need to have both: pricing power and customers who will refuse to patronize the competition. A truly strong brand should be one where the customer is more concerned about the product attributes then price, and has little to no interest in dealing with substitutes.
Perhaps the best example is what many people say about BMW drivers: "they would rather drive used BMWs then new models of other car makers".
As for GM you have a company that people see as the low cost provider, a company that doesn't exactly hold the public's confidence with respect to being a leader in automotive technology. So the car starts out at a deficit because some will be more skeptical about then they would a Honda or Toyota Volt.
Working out a partnership where it's quietly sold under a stronger brand name isn't a bad idea.
-M
Reply
Brand Names: Important, But Not Key to Investment Decisions [view article]
Second thought, this is why I say why not steal the succesful ideas of your competitors, differentiation can be attained after succesful branding but is not the same thing. ReplyBrand Names: Important, But Not Key to Investment Decisions [view article]
It would seem GM should work on improving the brand name in the minds of americans, then they might have some pricing power. The problem is these things take time, especially with large purchases like a car. If GM could sell a "Volt" without someone thinking GM/Chevy but instead Toyota, yes they'd be fine. CC needs to change the experience in their customers minds. An example of that kind of change is what is happening at Six Flags. These things take years even with good management and the resulting improved branding. Bad management and we have GM and CC today. ReplyBrand Names: Important, But Not Key to Investment Decisions [view article]
I fully agree with the importance of this marketing concept.So, then, does it follow that Chevy should delete their name from their new electric cars, and simply brand them as "Volts"? Reply
Brand Names: Important, But Not Key to Investment Decisions [view article]
Good article. Branding is extremely important, no doubt. But from an investment perspective would you consider a company to have a strong brand even if it didn't translate to higher ROIC compared to its competition?Isn't a company's brand or any other 'qualitative' measure only as significant as the quantitative evidence of its existence. In other words, a company with a strong brand should have higher margins than a company with a weak brand. If not, that company must not have a strong brand if it doesn't translate into pricing power.
True or no? Reply
Is One Automaker Default Almost a Sure Thing? [view article]
The government should bail NOBODY out and reward their failure. Every person on the planet saw oil prices rising except Ford, GM, and Chrysler management. Just let the creditors take control. Another reason a bailout is bad is because the unions are destroying automakers from within, so it would be wasted money. Any time the unions have a chance, they strike, slow down production, or ruin quality. GM and Delco have said that they are developing parallel lines in China (Ford in Mexico). [That is a shame, since they fixed the quality problem.] Now the steel workers unions have merged across the western world, making sure there is no reliable supply of metal. If the government bails US automakers out, then they are only subsidizing them to finish a transfer of jobs to Shanghai. So what is the gain of a $4 bilion bailout other than working Americans paying them to leave? ReplyIs One Automaker Default Almost a Sure Thing? [view article]
Catching up to Toyota in quality is nothing groundbreaking.Considering that in the past 10 years Detroit spent the same amount on R&D as the 10-year Apollo Program, you would expect them to put out revolutionary things!
I remain unimpressed. Reply
Is One Automaker Default Almost a Sure Thing? [view article]
Too busy to list much, but for Ford, they now have quality equal to Toyota (per independent surveys), multiple cars with 5 star safety ratings etc. Reply