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But maybe you can replace it; however, I have my doubts. About what, you ask? The American Automobile Industry, of course.....
I begin with this simple premise: It is stupid to create products and services based on sales data (the what) rather than on consumer wants and needs (the who). Focusing on the who instead of the what is called staying ahead of the curve—a very good thing. So, that leads me to believe that Ford, GM and Chrysler have been stupid since at least the late '70s, the era of America’s first gas crisis.
Here is some evidence to support my premise, as reported in the Sept. 19, 2006, New York Times.
The Chrysler Group said today that it expects to lose $1.26 billion in 2006, and that it will cut production in the third quarter by 90,000 vehicles, double the figure previously announced.
And then this:
Chrysler depends more heavily on sales of minivans, sport utilities and pickup trucks than any of its Detroit competitors. But sales of S.U.V.’s and pickups have declined this year, in part because of gasoline prices that reached $3 a gallon this summer. Vehicle buyers have been turning away from larger, less fuel-efficient vehicles in favor of cars and crossover vehicles.
Finally, from Edmunds.com, the auto industry bible:
Domestic manufacturers have been losing ground to imports, particularly Japanese brands. Trends that Edmunds.com saw in 2005 include:
• Domestic manufacturers' market share percentage dropped 2.4% from 58.4% in 2004 to 57.0% in 2005. Import market share percentage increased 3.4% from 41.6% in 2004 to 43.0%.
• Of the major Japanese manufacturers, Toyota and Nissan enjoyed the most growth, with market share percentage gains of 8.7% and 8.5%, respectively.
• Edmunds.com's site traffic data revealed that eight out of the top 10 makes researched were imports, with Honda and Toyota leading. The two domestics that made the list were Chevrolet and Ford, at number three and five, respectively.
I have a message for the Big 3. Maybe it's time to stop planning based on yesterday's sales and on driving short-term results, and think about your customer for a change and driving long-term results. Then again, maybe it's too late.
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Comments
Man. You are so correct. How can anyone loose billions of dollars and still keep their job? Oh yeah. Bill Ford stepped down. What about all the best practices employed by these companies? Oh yeah. I guess they're not. And what about the people? Well, they're smart. So how long does it take for their environment to "dumb them down." I know they went in with the right ideas but the auto companies keep doing the same things: i.e. Buick is still stuck on the importance of..."portholes." My God! When was the last port hole seen on the side of a Honda Accord or Toyota Camry? And where does this bad port hole idea come from? The people at Buick are STILL trying to bring back the things that made the 1950's Buick RoadMaster so popular...And you know what? The RoadMaster wasn't all that popular.
What's the definition of insanity? Doing the same things over and over again and expecting different results. Dump your stock. The people in the auto industry cling to their ideas more tenaciously than their most prized material possessions.
Now GM wants to merge with Nissan. But they're not number one either. So weak strategic move. Looser plus looser = looser.
Here are my recommendations for GM.
1) Stop making and designing cars. Farm it out to market leaders Toyota and Honda.
2) Become a marketing company. Leverage your brands and shift their quadrant positions on the positioning maps. They're yesterday's news.
3) Sell your marketing assets to maximize stockholder equity and fade into the sunset. We can all live without GM and Ford. They won't adapt to their environment. Look what happened to the dinosaurs! To parody the Nissan ads I rather like:
Shift: Inevitability
Thanks! Great post!
Posted by: Martin Calle | 09.29.06