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Detroit's Missed Opportunities

turnage (8a TX)
15 years ago

In the news this morning is China car maker BYD - ready to start production of its electric hybrid. Runs 60 miles on a charge and has a small gas engine to recharge if necessary. Cost $22,000.

Meanwhile, GM is hoping to start production of the Chevrolet Volt in 2010 with a drop dead range of 40 miles. Cost, with stereo and wipers, $35,000.

Guess who just invested in a 9.9 percent share of BYD? Warren Buffett.

Ford and Toyota are also behind the curve. Ford says maybe in five years. Toyota another year.

Wonder how many China will be exporting by the end of 2009?

Comments (20)

  • dave100
    15 years ago

    None 'till 2011 ,says Wang Chuan Fu (Chairman of BYD).

  • jakkom
    15 years ago

    GM - the mfg that built a viable all-electric car in 1996, the Volt, and then killed it so they could build more Hummers. For this we should give them the time of day, let alone taxpayer funds?

    Detroit has always considered small cars to be aimed at cheap, bare-bones transportation. It took BMW to revive the MINI Cooper, a pocket rocket with excellent gas mileage (assuming you can keep from using a lead foot, hehehe). Compare the MINI to a Pontiac Cruiser or Chevy Aveo, and it's obvious why Detroit's problems are of its own making.

    One analyst estimated Detroit could AT BEST sell 50% of its planned 2009 production. None of the Big 3 can survive on a sales percentage like that without making drastic changes far beyond what any taxpayer dollars could fund.

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  • iggie
    15 years ago

    We all better hope the Detroit auto makers survive, I don,t think many realize what far reaching economic effects their demise will have. It won,t matter if a hybrid costs 120, 1200 or 12k if things continue as they are on the economic front we wont have the cash to buy one. Warren Buffet is just like many other Americans send it off shore set back and reap the profits, remember our economy and living standards cannot stay the same and continue to support the huge trade inbalance that now exists. Detroit has made mistakes, but the after effects of letting them collapse will hurt us all far more than bailing them out will. Now I agree if they are helped, they should definitely be carefully supervised. The whole blame does not lay at Detroits feet, after all we bought the Hummers, Suvs and gas guzzling trucks and companies tend to produce what the public wants. The simple fact is the big gas price gouge hurt a lot, scared hell out of others and we don,t want the big powerful chromed cuties anymore. They know the next gas price gouge is as close as OPEC manipulation can make it The hybrid is an obselete needlessly complex piece of equipment that many will be very sorry they rushed out and bought in 5 years. The hybrid is simply old technology repackaged and a poor solution to the present problem. There are many other avenues that could achieve much better results and the research and development money would serve us all better if spent on new approaches such as fuel cells, rather than the band aid hybrid car approach.The hyrid uses a small gas engine, if we are going to stay with gasoline why not put efforts toward developing more effecient gas engines? The present one uses less than 20% of the actual enegry produced by burning gasoline the rest goes out the tail pipe and is wasted. What if we raise this effeciency to 40 % this would make a hybrid look sick. We have the brain power and it could be done, but first someone has to start the research.

  • jakkom
    15 years ago

    Oh, I think at least one of the Big 3 will survive - I just don't think any of them will be in their present form. Auto mfg, as pointed out time and again, is a profitable enterprise in the US - just not in Detroit.

    17 foreign-owned US auto plants are currently operating within our borders, with another 15 or so planned. Does that tell us all something about Detroit?

  • stir_fryi SE Mich
    15 years ago

    Nobody is going to care about electric cars (or want to pay for them) now that the price of oil is falling again. Last week I paid $1.55/gallon to fill up.

  • trk65
    15 years ago

    I can name 1,448,223 missed opportunities for the big 3 in 2007.
    That's the combined 2007 sales number of the following 4 models-
    Camry, Corolla, Accord, Civic.
    The only one of the big 3 that makes ANYTHING that even REMOTELY compares with those cars is Ford, and the majority of people who bought one of the 4 listed above simply won't look at a Ford for a multitude of reasons.
    Nearly 10% of the 16.15 million cars sold in 2007 have no legitimate Big 3 alternative in the eyes of the buying public.
    The big 3's passenger car offerings are only bought by a few groups-
    Rental Car Companies
    Large Companies who provide company cars to employees
    and
    Consumers who either refuse to do research and buy out of blind loyalty/habit/family precedent
    or
    Consumers who do the research and simply choose to ignore it for reasons unknown.

  • dave100
    15 years ago

    Some car buyers actually DO research and CHOOSE an American make -- honestly, it happens. I get a little miffed when someone tells me I must be ignorant or uninformed when I choose a Dodge or a Ford to transport my family and park in my driveway.
    Sign me -- unapologetic

  • jakkom
    15 years ago

    I don't think anyone needs to apologize for buying domestic. But the issue for the Big 3 is that they have almost no interesting/profitable entries in the smaller car category, and their design-to-production time lags behind the Japanese/Koreans. Detroit's improved, but still can't bring models to market as fast as they need to.

    Also, their management has made time and again, many errors of judgment. There is no real reason why other carmaker's management have guessed right on future models and vehicle mix (or nearly right, LOL, as is proven by Toyota bringing a big-truck factory on-line just as the $140/barrel oil price followed by the credit crunch hit), and Detroit continues to get it wrong, wrong, wrong.

    I love Fords, actually - have had wonderful luck with them over the last 30 years. But Ford ran the Taurus marque into the ground, destroying its value. At one time it outsold the Accord. The Contour has the Mondeo suspension - it's one of the best-handling compact cars around - but it costs Ford more to make it than it sells for. It should have competed perfectly with the Acura RSX and Honda Civic SI....but doesn't.

    Detroit's mind-set of "what sells is a brand-new model name" is incredibly stupid. We owned one of the very first Accords sold in the US. It was smaller than the Civic is nowadays; a 3-door hatchback. The various evolvement of Accords has morphed it into a totally different car. Our old Accord is probably closer to the Honda Fit than it is to today's Civic. But the Japanese understand that you can keep the same name, but tweak and change over the years, as long as you are still delivering what the customer perceives as sufficient value for the money. Keeping the name establishes an important consistency that saves marketing dollars, which is always a major expense for new model introduction.

  • stir_fryi SE Mich
    15 years ago

    But the issue for the Big 3 is that they have almost no interesting/profitable entries in the smaller car category...

    How about the Ford Focus???? Plus the Ford Fiesta is coming to the US. How about the all new (and sporty) Fusion 2010 (maybe not considered "compact" though).

    I would take a Fusion to an Accord anyday...

  • jakkom
    15 years ago

    I really like the Focus, but it's such a poor seller Ford had to start offering a 100K warranty on it because the quality was extremely poor the first few years. I can't tell you the last time I saw an ad for it, either, whether TV or magazine.

    The Ford Fiesta HAS been in the US. Every once in a great while, I'll see one trundling down the road: battered and underpowered. Again, it neither sold well nor gained any reputation as a quality car.

    You may prefer a Fusion to an Accord, but Ford has an uphill battle to convince most folks. I am the only one in my family who will drive Detroit cars; everybody else (and they all have multiple cars, and two of them are car fanatics) drives Japanese cars. My niece and nephew, in fact, refuse to purchase anything else.

    My nephew has played around with a lot of different cars (so many I lost track long ago, LOL; at any given time he has six of them, running or not) but he prefers Honda/Acura; says their engine tolerances are incredibly tight.

    I love Acuras, great seats and fun as h**l to drive. But the Hyundai cost me a lot less and gets me from A to B in comfort, safety, and efficiency. Like I said, the Ford Escape couldn't match up against it unless I wanted to spend $4K more comparably equipped.

    I actually think Chevys are a lot of fun: Corvette/Camaro heritage in sedan form. I rented a Malibu a couple of years ago and boy, for a leadfoot like me it was the most fun I'd had since we swapped the Acura Integra for a Ford Taurus. Acceleration to burn and that gas gauge fell in a hurry (and this was when gas was comparatively cheap!). But my impression of Chevy has always been they are 85K cars designed to be thrown away afterwards. They just don't seem to be long-term quality built. As we keep most of our cars to well over 100K on the odometer, that doesn't work for me.

  • stir_fryi SE Mich
    15 years ago

    I really like the Focus, but it's such a poor seller

    I really don't think that's true:

    In the first three months of 2008, Ford Focus sales increased by 23 percent, for a total of 49,070 units sold, over the same period in the year before. Because retail sales also increased by 35 percent, Ford can now claim 7.6 percent of the U.S. small car market, 1.2 percentage points better than a year ago. In short, production is expected to rise to 245,000 Focus units in 2008, up from 191,000 in 2007.

    The problem is it is not a very profitable car to sell for Ford.

  • azmom
    15 years ago

    "The problem is it is not a very profitable car to sell for Ford", why? why Ford cannot improve it?

    "Nobody is going to care about electric cars (or want to pay for them) now that the price of oil is falling again." - this is THE VERY type of short term, narrow minded, antiquated thinking drives big 3 to the ground.

  • stir_fryi SE Mich
    15 years ago

    Well, I'll tell you with 9-10 inches of snow on my street, I wish I had the 4 wheel drive Explorer we used to have instead of the Focus -- at least I could get to the grocery store.

  • jakkom
    15 years ago

    >>In the first three months of 2008, Ford Focus sales increased by 23 percent, for a total of 49,070 units sold, over the same period in the year before.By comparison:
    111,695 Civics were snapped up during the first quarter of 2008, and Honda believes it sold another 40,000 - 45,000 in May alone. To keep up with increased demand the automaker is looking to add more production at its East Liberty, Ohio and Alliston, Ontario plants, possibly by working overtime. Remember: this does not include the Fit, their other small car.

    Toyota sold 67,047 Corollas in this period, but one should note they have more than one small car: the Prius, the Yaris, the Matrix, and the Scion A/B line.

    As I said, I like the Focus and hope it does well. I'm an old fashioned hatchback lover, however, so as they dropped their hatchback model, they are off my list of potential purchases for 2009.

  • trk65
    15 years ago

    I don't see any bashing of big three products in my post, nor did I call anyone ignorant or uninformed.
    The facts are that the buying public (individual, one at a time car buyers) is not interested in the big three offerings in the subcompact and compact sedan segments and the big three have been unable to present an alternative to the four cars I mentioned, (ALL of which are manufactured HERE in the good old USA, BTW) that has drawn those buyers away from the product they have been loyal to since they became drivers.
    I like the Fusion. I like the Malibu. Not enough to buy one instead of a Camry or Accord, though, and that decision is based on math and my personal budget.
    At 5 years old that Fusion or Malibu will be fully depreciated, worth very little money and with an extremely small audience of people I can sell it to. I can put a 5 year old Camry or Accord in the paper for sale and the phone will ring off the hook-I'll get TWICE as much for it as I would for the Fusion or Malibu unless I live in Michigan.
    The big three do what they do very well-the problem is that what they do has become irrelovent and the structure of their organizations is much less nimble that it needs to be to compete. Every sedan they have brought to the table over the 3 decades years since Honda and Toyota began building cars on our soil has been a second tier choice except the Taurus.
    .

  • stir_fryi SE Mich
    15 years ago

    Here is an interesting column on hyprids from the Detroit News:

    Hybrid hype only for a few

    Forget what you think about hybrids for a minute and consider a few facts.

    They cost more than most people can -- or will -- pay; they provide fuel efficiency benefits only for specific and limited driving conditions; and the technology isn't going to solve America's oil issues.

    Sure, they're still somewhat trendy, and select members of Congress as well as Hollywood hypocrites regularly remind people that they drive the so-called green machines. Good for them and for the few others in America who are all hopped up on hybrids, but they are the few and the proud.

    And the declining.

    Hybrid car sales dropped 51.2 percent in December from a year ago and were down 12.7 percent for all of 2008, according to Autodata Corp. Sales of the Dodge Ram pickup alone (245,840) nearly matched demand for all hybrid cars combined (247,488) last year.

    Even the iconic Toyota Prius saw sales slide 12.3 percent to 158,884 vehicles last year. The fuel-efficient Chevy Cobalt (188,045) and Ford Focus (195,823) outsold the Prius.

    Overall, hybrids make up less than 2.5 percent of the market, a number not likely to increase significantly anytime soon. Gone, hopefully, are the days when the hybrid hype machine said the dual-powertrain vehicles would dominate the market and be standard offerings for most vehicles in every fleet.
    Blame consumers

    That's not to suggest that hybrids don't have a place in the market. They do, but it's a niche, where it belongs. Don't blame me for that. Blame consumers. There's a difference in what people say they want and what they buy. And when people put their money on the table, most high-tail it away from the $3,000 or more premium for a hybrid.

    A number of factors are to blame. Gas prices have dropped and consumer credit has tightened. Hybrids made sense for some at four bucks a gallon, but it will take a decade to pay off the premium when gas costs $2 a gallon. Sure prices for petrol will rise again -- and fall -- as they always do, mostly in response to actual demand, but it's doubtful hybrids will have the market-moving or the Earth-saving impact they were once proffered to have.
    Build what people buy

    Don't buy into those facts?

    Try this one. It makes no financial sense to put two drivetrains in one vehicle -- one for the hybrid system and one for the gas engine. Automakers can't afford to do that anymore, especially if the market continues its decline. Those resources are better placed elsewhere.

    Unfortunately, in the end, legislators and activists have been better at grandstanding and casting aspersions at those who don't play their game, but if the car companies are smart and follow the market's lead, they'll keep building what people buy, not what others tell them to build.

    Auto Editor Manny Lopez's column runs Wednesday.

  • mike_kaiser_gw
    15 years ago

    Nobody is going to care about electric cars (or want to pay for them) now that the price of oil is falling again. Last week I paid $1.55/gallon to fill up.

    Don't expect that to last long, OPEC has already started to cut production to increase prices. Gas prices are up 30¢ per gallon around here over the last week or two.

  • joyfulguy
    15 years ago

    The long and the short of it is - we're running out of easily accessed oil.

    We can get more oil from many of the earlier fields - but it costs a good deal more per barrel to produce it. And oil produced from tar sands is expensive ... plus heavily polluting: but that's in the area in which it's produced, so what consumer in a far country (or even a close one) is about to get all bent out of shape over that liability?

    ole joyful

  • azmom
    15 years ago

    Guess the Detroit News has the same short-term, antiquated, close minded and burry-head-in-the-sand thinking just as the big 3s'.

    They just don't get it. LOL.

  • lkgarn
    15 years ago

    My 13 year old Saturn SL2 gets 40mpg highway and 30 in the city. Don't tell me that the technology isn't already there to make more efficient vehicles that are not hybrids. No, my Saturn isn't an SUV, but I laugh at the commercials for all of these so called "fuel efficient" vehicles that don't come close to the car I already have in my driveway.

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