Jobu37

Seven Car Companies Hurt Most by Recession

Toyota's share was falling long before the economic crisis hit so it may not be a given that it will bounce back quite as quickly as you appear to be implying. Toyota can no longer charge premium prices due to their perceived quality superiority anymore. Reality is starting to settle into the market and consumers are beginning to realize that they can buy higher quality, better looking vehicles from other manufacturers such as Ford. I realize that there will always be blind loyalists but it is safe to say that the number of blind loyalists has and will continue to diminish. Blind loyalty aside, what consumer in his right mind would choose a Camry over a Ford Fusion when the Fusion has beaten the Camry, and all others, in quality surveys for the past three years, and it also gets better fuel mileage, has better handling characteristics, and costs $1,000 or more less. And don't kid yourself about Toyota holding the line on rebates, while they still have some of the lowest rebates around they have increased by a larger percentage than most. Only Kia, Hyundai, Chrysler, Nissan and GM have been more aggressive with rebates. Check the rental lots, you will find alot more Toyotas amongst the Kias and Hyundais so even their current sales are inflated compared to their historical retail demand.

Why I'd Avoid Toyota, The #1 Automaker in the U.S.

Japanese - the importation process in Japan adds many levels of cost to any product imported. So a 25K Chevy ends up costing closer to 40K. Historically , the government has kept the Yen artificially weak in comparison to the all currencies but especially the dollar. Recent times have allowed for the Yen to start moving closer to the natural exchange rate but it took a global semi-depression to do so. In recent months the Japanese central bank has been able to get it back up near 100 Y per $. All Japanese manufacturers count on the weak Yen to overcome their high labor costs and make their products competitive.
China - requires an auto manufacturer to team up with a Chinese firm before you get any real access to the market. Vehicles directly imported are hit with their version of a VAT. They also manipulate the exchange rate against the dollar.
Korea - essentially has a "Non-Korean tax". Even if you build a plant in Korea but are not a Korean based company your product is treated as if it is imported. Obama is supposedly addressing this in the current negotiations taking place on a new "free" trade agreement. Korea has essentially said that if you take away our auto tax we will ban U.S. beef. So lobbyists for the beef industry will derail any headway being made on free auto trade from the U.S. to Korea.
Mexico - the majority of their purchases are from Mexican plants owned by American, German, and Japanese auto manufacturers.


On Jun 22 05:50 PM 303820 wrote:

> Buddhabill...since according to you the auto industry is a global
> affair...can you tell me how many made in America cars and trucks
> the Japanese, Chinese, Koreans, Europeans and Mexicans buy?

Detroit: Please Bring Back the Stripped Car

The Fiesta is not going to come over as a stripper. The majority of it's sales will be at prices above where the bottom end Focus currently sells. The allure for the car in Europe is due to the high-end feel of the car along with it's superior driving dynamics. Most likely that won't change once we get it over here.

This article is completely flawed. Demand is what dictates residuals. The fact that a large percentage of import loyalists demand more Camrys and Accords is why they have higher residual values. When you start "dumping" more cars on a market than there is natural demand the tranaction prices have to come down to move the product. This is the game that the Big 3 were forced to play due to inflexible UAW contracts that made it slightly more profitable to keep churning them out instead of paying the workforce to sit idle. The long-term ramifications of this strategy is why the Big 3 currently trail the competition in residuals. Along with a flawed perception of materially higher quality for the imports. GM still uses this approach on certain models (Impala, and Pontiac) and Chrysler has no choice but to do so. When they don't follow this model you see sales numbers down 50%+. The only fleeting that Ford is aggressive at is "fleet only" models such as Crown Vic. Through June 2008 Ford was down to 13.58% rental fleet. Chrysler was 27.45% and GM a much improved 15.60%. The king of residuals, Honda, was at .75% rental fleet. Yes, point 75 percent. Honda's retail demand in the marketplace is where anybody in the car business should want to be. The company that is most aggressively moving toward fleet dumping is Nissan they came in at 13.07% and very likely will fall behind Ford in the next survey.

You can't manufacture demand you have to earn it. Ford and GM for the most part are doing the things necessary to earn it but as always perception lag can exist for many years. Fortunately, for Ford, the lag is already into it's 3rd year and the tide may be turning for them sooner than Honda and Toyota would like.


On Jan 07 12:00 PM tirereviews wrote:

> I think Ford gets it, albeit a little late. The subcompact Ford Fiesta
> sold in Europe (not to be confused with the crappy Festiva we had
> in the 90s) should be arriving on our shores within a year or two.
>
>
> Chevy had the right idea coming out with the outsourced Aveo, but
> it was absolutely sub-par compared to the Toyota Yaris, Nissan Versa,
> and hello! -- the very successful Honda Fit. The Japanese may have
> copied Detroit in the 60s and 70s, but they have been and still are
> leading innovation and "what people want".