Fam62c

Auto Industry: In for a Penny, In for a Pound

The previous post was interesting. GM actually had an electric car, and unlike many others, I accept why it never went into large scale production. The market for the car would have been very small given the limited range and size of the vehicle. This small market would have resulted in low production and a very high retail price for the car that very few would have been willing to pay. The part that I didn't understand was when GM essentially stopped R&D on the project instead of leaving the leased fleet of EV-1's out there and slowly improving them. They had a base of willing car enthusiasts who were willing to lease the cars and actually pay to operate a GM test fleet; GM could have supplied them with improved versions of the car as the project developed. They had an edge in a future technology and walked away before it evolved into the right product at the right time. GM must have known that there would come a time when oil would become very expensive. GM had the closest thing out there to an actual, marketable electric car. If they had had the foresight to continue on with that type of vehicle development they might have gone a step further and had the first hybrid/electric cars on the market and become known for something new. Instead, Honda marketed the first hybrid (Insight) and Toyota was the first company to make a hybrid that really caught on in large numbers. The fact is, it could have been GM who came out with this technology first and got all the sales to the "early adopters" as well as the recognition as an innovator. GM still has a chance, if they would stop talking about the Volt and get the car to market they would have the first plug-in and could claim the title of being first with the highest mileage hybrid car out there. If GM could get the car out there I bet the Democrats would be willing to pass some sort of tax reabte or other incentive for plug-in hybrids (maybe even specifically for American built plug-ins) that would allow GM to make some money on the cars and get people to buy them. I'm afraid that the Japanese will beat the Volt to market with a plug-in and the Japanese car will be the one to get all the sales. Like it or not, The Big-3 are going to have to find a way to build high quality, attractive, innovative small and medium sized cars that people want. They are also going to have to do whatever it takes to adjust their cost structures to be competitive with foreign products or they will not survive in anything but a booming economy with very cheap gas. It will be hard to compete with Accord, Civic, Camry and Corolla, these nameplates have been out there for 20+ years and the models have been constantly improved. They have a reputation for quality and they are the cars that buyers gravitate to. The closest the Big-3 ever got recently to a car with this kind of following was the Taurus but they let it slip away by not keeping the car updated and competitive. I think a company like GM needs to concentrate their energy on fewer brands and fewer models; get a few things right and get rid of the rest.