Filed under: Car Buying, Trends, Earnings/Financials
'Be aware' says Walsh to the Detroit 3
Tom Walsh of the Detroit Free Press interviews auto analysts, dealership owners, and consultants on their view of the Detroit Three in the form of a follow up to last week's article on trust. Walsh admits the results are troubling. Though he points out those being interviewed are business people and are answering from that perspective, they reflect what their customers are buying (or not buying) from them.
Jerry Pyle of Friedkin Automotive, for example, replies that Ford and GM have too many brands and people. Both he and Walter Czarnecki of Penske Corp. see their domestic dealerships selling half or less compared to their Toyota dealerships. And dealership owner Herb Chambers bought several domestic dealerships even though they make no profit because of their low acquisition costs.
Several of the businesses interviewed did acknowledge DaimlerChrysler's success with its 300C and Ford with its new Fusion. But Glenn Mercer of McKinney & Co. points to a current trend by older customers of purchasing near-luxury and luxury vehicles, a weak segment for the Detroit Automakers.
Walsh ends his article as a form of warning to the domestic automakers, their part makers and unions to keep aware of consumer perception when making their recovery decisions.
[Source: Detroit Free Press]
Reader Comments (Page 1 of 1)
Howard Kerr 5:10PM (5/15/2006)
I've pretty much given up thinking I know what can pull Ford and GM back from the brink. However, I have to wonder if Ford and GM would be in this mess if they had concentrated on producing a solid product in each segment of the market instead of SOLELY in areas where they could get quick sales and/or profits. For every great idea, like the original Ford Explorer, Ford had not so great ideas like the second generation Escort. Many other auto companies try to spread the dollars around to ALL the segments of the market they are in, instead of dumping huge amounts into an "all-new" sedan or truck every 6 to 10 years.
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Ray 5:24PM (5/15/2006)
So with VW located in Auburn Hills, shouldn't it be "The Detroit 4"? And actually since Ford and DCX are located outside of the city -- shouldn't it really be "The Detroit One"? Just curious how far we should be taking all of this "not the Big Three" silliness.
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gbh 9:22PM (5/15/2006)
I just find it continuously puzzling/disturbing/amusing that these columns are considered worth printing.
I don't know a soul outside the fanboi ranks who hasn't seen this coming since the early 80s. Between an unsustainable business model, incompetant management, and a corporate culture that is textbook dysfunctional - the road to their current situation was built, paved, and striped in the late 60s.
Maybe they can build an off ramp, but nobody in the driver's seat seems have a clue that they needed to start yesterday actually building it. Not stay on the same road, and continue telling the passengers that "there's one right around the next bend".
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glacia00 5:02PM (5/16/2006)
"Glenn Mercer of McKinney & Co. points to a current trend by older customers of purchasing near-luxury and luxury vehicles, a weak segment for the Detroit Automakers."
Frankly where are they not weak? No one would be more happy than I to see something other than retro cars and cars that look so old that they might as well be called retro coming from US automakers but I don't think they even have the will to recover at this point.
I'm certain management is in the mode of blaming everyone but themselves at this point and working at a US automaker is probably more depressing than a morgue.
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