Glenn Mercer

http://www.glennmercer.com

17 Comments

    • ON: Fri Sep 5th 11:56 AM
      Commented on:
      On the Need for Better Auto Sales Metrics
      I cannot say how much I agree with this post. Does Wal-Mart report unit sales of socks each quarter? Does Armani seem doomed because it sells only 1% as many suits as Value City? The auto industry, with its fascination with units, lumps a Maserati with a Mazda and a Maruti as all the same thing. Thus we get frenzied pursuit of developing markets, which represent "all the growth." In units, yes, but GM itself has forecast that ten years from now in REVENUE terms the developed world's share of total automotive sales will have hardly budged at all, even as its UNIT share falls. I'd rather be selling 50 Porsche Turbo's a year than 50,000 Tata Nano's...
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    • ON: Fri Sep 5th 11:52 AM
      Commented on:
      Tata Plant Protest Demonstrates Indian Identity Crisis
      One small point: Tata itself has never promised a $2,500 retail price. My guess is that will be the wholesale price for the base model, and by the time dealer margins are added and the final product mix is set we will see an average selling price at retail of $4,000. Still darn cheap, no argument there, but just as the "5,000 Euro" Logan never sold at that price, the media may have jumped on the $2,500 number without thinking through eventual commercial developments.
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    • ON: Fri Aug 22nd 13:05 PM
      Commented on:
      Will Hyundai's Luxury Car Be Like the VW Phaeton?
      I think the big difference here is the lack of a new dealership channel. It is hard to sell a $70,000 VW, a $50,000 Toyota, a $40,000 Hyundai, etc. in general: but to sell them in the existing dealerships is very very tough. When one is selling an upscale vehicle it is crucial to reassure the buyer that he/she is making a very smart decision, that he/she is now one of the elite club, etc. Thus a BMW dealer's muted lighting, soft music, pile carpets, and espresso machines. How does one sell a $45,000 Genesis in a dealership characterized by (sorry for the exaggeration here) linoleum floors, soda vending machines, and nervous buyers waiting outside the F&I office to see if they qualified for the loan? Surveys have shown that as one spends more on a car the dealership matters more and more, relative to the car, and for Hyundai to not launch Genesis in a separate store, or VW not to launch Phaeton in a separate store (versus what Lexus did), really means one starts with two strikes against you....
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    • ON: Wed Jul 9th 10:53 AM
      Commented on:
      General Motors’s Global Brands Come Under the Microscope
      Daewoo Motors went bust, yes, but GM bought the Korea-based tech centers and manufacturing plants, and now GM/Daewoo is one of GM's largest overseas manufacturing centers.
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    • ON: Wed Jul 2nd 10:01 AM
      Commented on:
      Is There Any Hope for the Big Three Auto Makers?
      Beats me how my one comment got printed several times! Sorry about that, it was not THAT profound a statement!
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    • ON: Wed Jul 2nd 09:59 AM
      Commented on:
      Is There Any Hope for the Big Three Auto Makers?
      Much as I hate to say this, it may be time to redefine what we mean by the Big Three. Maybe the Big Six?
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    • ON: Wed Jul 2nd 09:59 AM
      Commented on:
      Is There Any Hope for the Big Three Auto Makers?
      Much as I hate to say this, it may be time to redefine what we mean by the Big Three. Maybe the Big Six?
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    • ON: Wed Jul 2nd 09:59 AM
      Commented on:
      Is There Any Hope for the Big Three Auto Makers?
      Much as I hate to say this, it may be time to redefine what we mean by the Big Three. Maybe the Big Six?
      View article »
    • ON: Wed Jul 2nd 09:59 AM
      Commented on:
      Is There Any Hope for the Big Three Auto Makers?
      Much as I hate to say this, it may be time to redefine what we mean by the Big Three. Maybe the Big Six?
      View article »
    • ON: Fri Jun 27th 10:21 AM
      Commented on:
      How I Plan to Trade My Depressed GM Stock
      One more thing to think about. Yes, we all know "Product is king." Agreed. If GM can turn out great new product, a turnaround will ensue. But the question in my mind is, "How fast?" Consumers do NOT, when shopping for a car, write down all their options and then rank order them and buy whatever is in spot #1. Just like when, for example, you and the spouse choose a restaurant to dine at, you do not look up all eateries in a 10-mile radius and rank-order them. You choose from a pre-selected and proven list of familiar favorites. Same in cars. If X has owned three Hondas in a row and they were fine... and one hapless Pinto way back in college, X has precious little incentive to now consider Ford again. Over time, as they hear better and better things about Ford, see positive reviews, talk to a neighbor who owns one, they will re-consider the brand. But this takes time: years. J D Power reports that about 40% of the American public will not even CONSIDER a Detroit product. To drive consideration up, GM has been pulling out the stops: free over-the-weekend test ownerships, side-by-side comparos with Toyotas, contests for just stopping in the dealership, etc. These are all the exactly right things to do. The question is, will Detroit's cash run out before the consumer tide slowly, slowly turns? Remember, a car company's "conquest" vehicle is not this year's new car, it is the car they made 8 years ago, and consumers' memory of that vehicle. With the average age of a new car buyer at 45, most of us are buying used for years before we spring for the new beast, and so we are basing our choices on experience with Detroit's "bad old days," not today's great new products. Can Detroit change our minds fast enough?
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    • ON: Fri Jun 27th 10:11 AM
      Commented on:
      Is Anything Worth Owning in the Auto Industry?
      A few comments:
      1. Re Prius's looks, I was unaware anyone was buying the car for its styling. Leaving aside opinions about looks, the car has the fastest inventory turns in the USA at present, staying on dealer lots just long enough to be washed, prepped, and delivered. About one day. Love the Prius or hate it, it is a sales homerun for Toyota.
      2. Conversely, while I think the Honda product line has a lock on success for the foreseeable future (after all, knocking off the F-150's sales crown is stunning!), Acura is arguably in some disarray. Only one of the Japanese upmarket brands has broken into the "Tier One" luxury segment, and that is Lexus (with a vengeance of course!). Acura continues to languish somewhat and arguably has been passed by Audi.
      3. A key asset every Japanese company has, that is often overlooked, is the reservoir of high-mpg models they have "back home" that can be brought to the USA quickly if fuel prices stay high. Thus Toyota did not need to develop Scion from scratch, but just adapt domestic models for USA sales. Nissan brings its Cube here next year. Etc. Chrysler has no such reservoir; Ford could tap Mazda for small cars but to date seems not willing to do so; and GM has Daewoo in Korea, which should be able to deliver the goods (though the Aveo has been a real dud, I will admit). Unfortunately for the Big Three, the flow does not reverse: there is really no market anywhere in the world desperate for large pickup trucks.
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    • ON: Thu Jun 26th 10:14 AM
      Commented on:
      Can Battery Technology Save GM?
      Just one small comment re the battery technology issue. One thing to keep in mind is that whether we pick battery chemistry A or B, whether the Volt works or not, whether Toyota can sell Lexus hybrids or not... for the next 5 years anyway any car company's fortunes will be driven overwhelmingly by their internal-combustion product line. Even for Toyota the Prius is a minor part of the line up: a crucial part, a growing part, but in the big picture Camrys and Matrixes (Matrices?) etc. drive the profit engine. So as regards GM, even if Volt is wonderful (and I hope it is!) the PR and image impact will DWARF the bottom line impact for a long long time. Look again at Toyota: the Prius battery packs are so hard to make that even after years of output they still got caught short this year, and cannot easily ramp up.
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    • ON: Thu Jun 26th 10:04 AM
      Commented on:
      Market Share Doesn’t Matter; GM Mortgages Its Future
      I would agree but take this further: note that when OEMs fret about market share they measure it in UNITS. A Maybach is the same as a Mazda is the same as a Mini. Toyota passed GM in revenue long before it did it in units, and no one even noticed that. As long as OEMs target vehicles rolling out the door they will be hard pressed to think rationally about profits..let alone revenues. If units matter so much, how can Porsche afford to take over VW, and Ferrari be worth more (usually) than Fiat?
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    • ON: Sun Jun 22nd 12:02 PM
      Commented on:
      GM and Ford: Still Easy Shorts
      Frankly I liked "gamelan" better than "gameplan" anyway (grin).
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    • ON: Tue Jun 10th 11:32 AM
      Commented on:
      Hummer Sales Down as Gas Rises
      I never understood the appeal of a vehicle named the slang term for a sex act! (grin) Might have been better to call it Tonka...
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