A man in Alberta Canada went into a Ford dealership and began smashing his vehicle into several new trucks. In fact, he did so much damage 3 trucks had to be totaled! This man received a fine, 3 months in jail and 3 months of probation for his actions. I have not been able to find out what his motive was for this crime, but I can speculate: was he an owner of a Ford HD diesel truck, these trucks have had a terrible series of mechanical problems? The Ford HD diesels have had so many problems I’ve heard of people driving them back to the dealership and just walk away from them, I guess that’s better than smashing into one! Or did he feel wronged by the dealership? None of can be sure, but if someone does the proper research, and then goes about buying their next car in the right way, there’s much less of a chance of them wanting to go back to the dealership and smash up some inventory! Buy smart, I’ll show you the way!
February 26, 2009
February 25, 2009
February 19, 2009
Is Mazda the model car company?
General Motors and Chrysler this week sat in front of Congress with their hands out with nothing but promising better results in the future. Both companies will be getting money, but arguments can be made for and against giving these car companies taxpayer money, but I do not think there is any argument about what path they should take, just follow Mazda. Yes Mazda. Sure the bigger imports like Honda, Toyota and Mercedes-Benz have more impressive total sales figures and much more panache to the car buying public, but I think you’ll agree that Mazda’s actions over the last 5 years provide a blueprint for GM brands and Chrysler.
In 2005 Mazda began changing. That year they had 900 dealers around the country, today, 4 years later they have 640 dealers, a 30% decrease. Less total dealers allow each one to be healthier. It works on the Savanna and in the auto business (if you work in this industry like I do, there’s even more similarities between the auto business and were wild animals hunt each other).
And not only are there less dealers, Mazda is also making a much better product. The Mazda 3 and Mazda 6 are outstanding cars and both have received incredible praise from customers and the auto press. Additionally, they have three CUVs the Mazda 5, CX-7 and CX-9 that are extremely popular and offer an excellent product. Mazda has created 5 great vehicles that provide outstanding satisfaction from price to performance for 80% to 85% of the general public. Their other vehicles like the B-2000 (a pick up truck), Tribute (an SUV) and niche cars like the RX-8, Speed 6 remain, but are not their main focus. They focus on the 5 great vehicles. So Mazda reduced dealers and concentrated on creating a handful of excellent vehicles… are you listening GM and Chrysler?
February 16, 2009
What does 2009 and beyond hold?
We are a little more than one month into 2009 and the US is on pace for 9.6 million auto sales for the year. This year many experts have been predicting a 10 million unit year, so to the auto industry’s dismay we may be on track. So the question that must be asked is, will 10 million units be the new norm or is it an aberration and will 2010 see a return to 13 million or even 15 million units sold? Experts are split on this, some see 4 or five years of 10 million unit sales, while others expect 2010 to be a return to 2007 and 2008 numbers.
The prognosticators who are calling for 2009 to be an aberration are probably hanging their prediction on historical scrappage figures. Scrappage is the number of units each year that are retired, usually to high mileage or extensive damage. The historically consistent scrappage figure is 6% and that translates to about 15 million units sold. Obviously in 2008 we were below this, a bit under 5%.
With a sold historical scrappage figure the experts who are predicting up to 5 years of 10 million unit sales must account for a new mindset amongst American car owners. If we are to become a country that consistently operates at a 4% scrappage rate year after year we will have to expect that a large number of 2 car families will become 1 car families. Also, we will be a country of people who decide to hold onto their vehicles for much longer than they use to. Additionally, with a 4% scrappage rate I would expect a huge increase in public transportation usage.
An additional result of multiple years of 10 million units sold will be a seismic change in the US retail auto industry. At 10 million units a year we will not be able to continue to support 20 different manufacturers sell cars in the US. There would not be enough profit for all of them to survive! These are certainly interesting times, but my guess is we will see car sales return to 14 million by 2011.
February 12, 2009
February 11, 2009
A global change in the auto business
Last month something happened that just a few years ago seemed impossible: for the month of January there were more cars sold in China as compared to the United States. For one month China represented the biggest car market on the planet. We can go a long way to fixing our economic troubles if the Big 3 can get their act together and find out how to tap into this growing and potentially enormously lucrative market. The auto industry needs to see opportunity through a world wide vantage point. So what if US sales are down 40% if Chinese sales can be up 40% and since we are starting from 0 that’s not an enormous task.