Bailout for the Big Three?? How will it help??

What I've been saying is that Chrysler needs to focus its attention
squarely on the North American market and not get distracted trying to
sell its products in countries where, for a variety of reasons, it's
not likely to perform well. It goes to the point I made earlier, that
if you can't sell North American cars to North American car buyers
who, in the past, have been largely loyal to you, it's not likely
you'll fair much better in foreign markets where the general public is
even more committed to supporting their own domestic manufacturers.

It's not like $4.00 gas jumped out of the blue and smacked Chrysler in
the face. Like GM and Ford, they chose to ignore the fact that
America was becoming increasingly more dependent on foreign oil, most
of which originating in countries that don't exactly like the U.S. --
did they simply forget the '70s? And, yet, they've done everything in
their power to expand their full-size luxury truck and SUV sales,
whist efffectively abandoning the passenger vehicle segment to foreign
competitors.

And North American car buyers have, for the most part, rejected them.
I read this morning that, in 2008, the Dodge Caliber hatchback has
sold for an average of $1,717.00 *less* than a Honda Civic. Why then,
even with this price premium, does the Honda Civic outsell the Dodge
Caliber by, what, I'm guessing, ten to one?

The same ones that, as noted above and in my previous posts, are
*more* expensive than the domestics?

I'm sorry, did I fail to mention the 25% import duty that applies to
foreign made trucks?

Actually, I can and I will. My point is that Chrysler has bigger fish
to fry right now than worring about an 8% duty on cars it doesn't sell
in Korea.

The '74 Dodge Challenger was my first car and so the 2009 Challenger
holds considerable appeal. However, I've decided my next car will be
a hybrid or, better yet, plug-in hybrid. Don't get me wrong, a 5.7 or
6.1L Hemi Challenger would be an incredible ride, but I'm not
convinced it's the type of car I want to be driving now or two to
three years from now, given the general direction of our economy.

Cheers,
Paul

 

The whole world is entering a recession, possibly deflationary in
nature.

Most every sector of every economy is shedding jobs.

The US auto industry has been maligned as inept and foolish, but the
big-3 have done better than most mega-corporations in other sectors.
How many airlines have been in and out of bankruptcy protection over the
past 10 years?

How many technology, energy, telecom, banks and financial services
corporations have folded or have seen their share prices reduced to
penny-stock value in the past 10 years?

There is no correct path for any company right now. Every company is in
survival mode as consumers flee the markets. Now is not the time for
the big-3 to hatch long-term product planning and expensive R&D. Now is
the time to reduce costs and hunker down and hope for the best.

The big-3 have roughly 50% market share in the US. Saying that they
"can't sell North-American cars to North American buyers" is hyperbole.

More hyperbole.

http://www.tennessean.com/article/20081120/BUSINESS01/811200320/1003/RSS6004

The Caliber does sell $1,717 less then the average Civic, but that's
better then the Chevy Cobalt and Ford Focus, which sell for $4,192 and
$3,371 less than the Civic.

However, Caliber 2008 sales (through the end of October) are less than
half of Focus sales (176k Focus) with Civic volume of about 304k units.

----------------
If the Detroit Three lower their labor costs, and retool to build more
compact and subcompact cars, but still have to get by on $3,000 to
$4,000 per car less than what Honda takes in for each Civic, they will
face a painful struggle to survive.

It will take years for Ford, Chevy and Dodge to heal the damage done to
their small car brands by years of second-tier quality, uninspired
styling and technology, and marketing strategies that focused on filling
rental-car fleets at the expense of resale values.
----------

Translation: The US Big-3 have never before relied so heavily on sales
of their low-end cars as much as they do now.

You can get a Challenger with the 3.5L engine.

I have no problems getting 26 - 28 MPG on the highway in my 9-year-old
300M with the 3.5L.

 

Forgive me if this sounds flippant, but have the big-3 done much in
the way of long-term product planning and expensive R&D relative to
their peers? If what we have today is the result of long-term product
planning, please let these folks be the first in line to receive their
termination slips.

Year after year, the big-3 continue to lose market share to their
foreign competition and I don't see this trend reversing anytime soon.
BTW, isn't calling GM, Ford and Chrysler the "big-3" somewhat
hyperbolic in itself now that Toyota's sales surpass those of both
Ford and Chrysler?

Perhaps we measure success differently. Toyota sells 3.4 times more
passenger cars than Chrysler; Honda outsells Chrysler 2.2:1 and Nissan
1.5:1.

Advertising? That's it? Well the folks on Madison Ave. will be
pleased to hear that.

It's not just a matter of good gas milage. If that were the case, I
could choose from any number of fuel-efficient sub-compacts. I want a
plug-in hybrid because that's the type of vehicle I want to drive.

Cheers,
Paul

 

The Big-3 (B3) all produce a mix of cars that satisfy a variety of
consumer needs, including fuel efficient small compacts.

If the buying public in the US/Canada prefers to buy a foreign vehicle
of any particular class or catagory or if they would only buy a B3
vehicle only if priced substantially lower than a competing foreign
model, then the reasons for this should be discussed here.

Continuously stating that the B3 are losing sales to foreign (or more
specifically, asian) cars because they are not making the correct mix
vehicle types is flat-out wrong.

What we have today is the result of 2 decades of consumer perception
that B3 cars are inferior to asian cars, combined with a tax and tariff
structure that favors asian car sales in the US.

They've lost market share because there are more foreign players with
more models in the market today vs 4 years ago.

And they will continue to lose market share as the US dollar appreciates
vs other currencies in this current climate of economic fear (or
terror). As global stock markets tank and commodity prices fall, the US
dollar is (or will) be seen as the only asset to hold that will not
decline in value vs anything else, hence this will put extreme pressure
on all US manufacturing (not just the B3).

GM, Ford and Chrysler have collectively been called "the big-3" by the
north american media for years, and probably got that name when there
were other US car makers still operating (like AMC).

I use the term "Big 3" because it's faster to type than the names of the
3 US car makers, which we are lumping together here for the purpose of
this thread.

We know there are size differences between the various car companies.
We know that Chrysler has always been the smallest of the B3, and is
smaller than Toyota and probably Honda as well (in the global sense).

The real issue is the change of North American market share and relative
profitability between the various players. Over the past 4 years, the
B3 have gone from almost 60% market share to just under 50%. I don't
know who of the B3 lost more of their share.

Even the Prius is not a "plug-in" hybrid.

I don't know who makes a "plug-in" hybrid.

And I'll tell you that the consumer market is just beginning to build an
experience base for electric power storage in cars, and it will take
another 10 years before we know just how ergonomic and economical those
batteries will be.

Plug-in vehicles (either totally electric or hybrid) will create their
own social problems, and soon, as people drive around with extension
cords and try to charge-up using any exterior outlet they can find on
any building, shed, or utility pole (essentially stealing power).

 

We've been walloped by high crude oil prices and now, in no small part
because of this, the economy is going into a nose dive. Neither of
these two events should come as any surprise. We all knew -- or
should have known -- the risks of being heavily dependent upon
imported oil and we've known that the marginal cost of new supplies is
steadily trending upward. We also knew that many North American
consumers were living well beyond their means and that sooner or later
these personal debt loads would become unsustainable. This is not the
type of market that favours a large portfolio of full-size luxury
trucks and SUVs, and to be financially dependent upon this one segment
is, quite frankly, an error in judgement of monumental proportions.

In addition, there's a growing awareness of how the choices we make as
consumers has a direct impact on our environment and our relations
with others. Those who are genuinely concerned about global climate
change, resource depletion, rampant consumerism, invading sovereign
nations under the pretence of routing-out terrorism and championing
world democracy when we all knew damn well the only reason was to
steal their oil, view trucks and SUVs as a shining example of all that
is wrong in this world.

I know many folks who won't ever consider a domestic vehicle either
because of their poor past experience with the big-3 or because
they've bought imports in the past and they're quite content to stick
with what they know and like. That's the reality facing the big-3 and
we can't simply wish it away.

Well, if they can't significantly trim their costs and thereby adjust
to a shrinking market or, alternatively, regain some of this lost
market share, their future looks particularly grim. We might as well
post a "do not resuscitate" sign next to their death bed.

Fair enough. There are other examples of commonly used expressions
that no longer accurately reflect current circumstances.

As stated before, the big-3 have, for all intents and purposes,
forfeited the passenger vehicle market, choosing, instead, to
concentrate their attention on the previously more profitable light
truck and SUV segment. No doubt it seemed like a reasonable strategy
at the time, but being heavily dependent on a single product group is
not without risk, as we can clearly see, and it does nothing to
address the fundamental weaknesses that underlie this choice.

No one as yet, but I expect that will change within the next two to
three years and by that point my 2002 300M will be due for
replacement.

Well, we'll have to see how it all shakes out. For now, I'll worry
about gas being siphoned from my tank.

Cheers,
Paul

 

http://www.poulsenhybrid.com/index.html

 

The "foreign" manufacturers also produce a larger variety of cars.
The B3 got stuck on trucks, even some of their cars look like trucks,
particularly Chrysler's.

The USA dollar appreciation is temporary, it will drop next year.

I know the Toyota Prius battery lasts the 8 year guarantee period, based
on a friend who has a 2000 Prius still going strong.

The big problem will be supplying the huge amount of electricity.
Big expansion of electric generating capacity will be needed.
Solar cells on the roofs of plug in electric vehicles would help.

 

That's a pretty wimpy distance.
I'd need another car for a good percentage of my urban trips.

Much more work is needed on the distance.

 

That may be. I don't know. It may be that simply changing some
exterior trim on a Civic turns it into a different model.

Blame Chrysler's current vehicle offerings on Germans working for
Daimler. They had their own agenda, which was to treat Chrysler as a
low-end sister division to Mercedes, and to design Chrysler vehicles
with as much Mercedes parts content as possible. That meant lots of
4-wheel drive, and raising the car up to accomodate the extra parts for
4-wd. What you get is more truckish looking cars - and more heavy.

The Pacifica was a good example of lots of effort and cost invested into
a vehicle the market did not embrace. The Crossfire is another.

Look at Chrysler's concept for what the 300m was going to evolve into.
The Hemi 300N concept was shown at the Detroit auto show in January
2000, and was never seen in public again, because by then it was already
under control of Daimler.

Back during 2003 - 2005, Dodge/Chrysler dealers were screaming for new
or different models. Everything that was on the drawing board in 1999 -
2001 was scrapped by Daimler. You're not going to get a low-cost
compact car when you're using expensive E-class parts imported from
Germany.

If it does, then something else will have to go up. What will it be?

The yen? The Euro? Gold? Oil? Potash?

Many people really don't know how a hybrid car works or how the
batteries are used.

The battery system in a hybrid is designed pretty much only to capture
energy wasted during braking or coasting to a stop, which is encountered
mainly in city driving and especially for taxis. Constant speed
operation, long-distance commuting with few stops is not a good use of a
hybrid.

Here's more:

NiMH batteries used in hybrids are not used as if they were a tank of
gas, where you can charge them to 100% and then run them down to close
to zero.

The battery control computer in the Prius likes to keep the batteries at
around 60% charge, and only let the battery level vary around 10 to
15%. So the battey is rarely more than 75% or less then 45% charged.
What is displayed on the dashboard screen in the Prius is not be the
true charge state of the battery, but is scaled based on the 75% / 45%
charge targets. This pattern results in the LONGEST LASTING battery
life.

Also note that if a hybrid battery starts to fail or lose capacity in a
hybrid, it will resort to using it's gasoline engine more and more as
the battery loses capacity. This will be gradual, and hard for the
driver / owner to notice.

For a pure electric vehicle, a failing battery system can't be
tolerated, and a reduction in the distance between charges will be
quickly noticed by the driver.

Actually - no. If we're talking about a mass adoption of gas-electric
hybrids, then we're not looking at much, or any, additional load to the
electricity grid. Remember that the Prius does not (from the factory)
have the ability to be plug-in charged. There is no need, because it's
battery system is not large enough, nor designed, to be the main energy
source for the vehicle.

 

Sometimes it's not accurate to compare report figures. Different
manufactures are involved in differing market sectors. Subaru has a very
limited market. If you compare them against direct competitors of other
manufactures Subaru didn't do so well.

 

If they make the cars we want well buy them.
I haven't seen one I would buy new for many years.

Yet the "foreign" makes have several cars I'd buy.

 

Certainly Daimler wanted Chrysler to complement Dalimer's vehicles and
to obtain production efficiencies through shared production.
The FWD 300M being replaced by the RWD 300 (Mafia car my dealer says) is
the result or sharing the drive train and engine.
The Caliper and Compass have some very good technology, I particularly
like the Compass's profile and rear views, but the Jeep (read truck)
front end is just something I park in my driveway.
The Nissan Rogue, with almost identical drive train, is quite acceptable
to me.

 

Hear hear!!!

 

They don't make much profit on their smaller cars because they are built
to be cheap, as well as small. I've owned several, both NS and import.

Most of our Japanese cars are built in NAFTA, most in the USA or Canada.
Take the Civic and RAV4 built in Canada; Camry and various Hyundai
models built in the USA; Nissan Versa built in Mexico where Chrysler
built the Neon as well as other models. Then there's the Fusion from
Mexico.
The Nissan Rogue has been coming from Japan, but I hear a USA plant is
being built.
GM is dumping small cars from Korea, my oh my!

 

I expect the German's running Chrysler didn't understand that.

Me too and if it weren't for being lucky and finding an excelent
condition 300M I would be driving 'foreign" today.

BTW that 300 totally turns me off. As I said to a Chrysler dealer, even
if the 300 was FWD I'd never buy it.

 

Actually- yes. More Hybrids will become plug in, where they can travel
40+ miles on battery alone. The gas engine is only used for extended
trips or for additional power. Much commuting could be done on plug in
power alone.
The Volt is of this type, I've read the Prius will also have this plug
in capability.
The Volt type of vehicle definitely interests me. I could get by with
the one car I have now, yet enjoy excellent urban mileage and long
distance highway driving.

 

Chrysler is at a huge disadvantage compared to GM and Ford at NOT having
a presence in foreign car markets.

Daimler spent the last 8 years fucking with Chrysler and keeping them
from entering foreign markets (either directly with Chrysler car sales
or indirectly by buying foreign car brands).

 

Quite a few Chryslers are sold in Europe!

Or do you mean manufacturing in foreign markets?

DAS

To send an e-mail directly replace "spam" with "schmetterling"
---

 

In 2006, Chrysler built 2.7 million vehicles (a drop of 4.5% compared to
2005), of which 556k were sold outside the US (220k in Canada, 131k
units in Mexico). Giving a total of 214k outside NA or 17.8k vehicles
per month.

"... the company's minivans and larger Jeep models, like Commander and
Grand Cherokee, are surprisingly popular in Europe."

In Q2 2007, Chrysler (then owned by Daimler) was selling about 15k to
18k cars per month outside North America. 9.5k of those were sold in
western Europe. The Caliber is the top seller outside NA. In the first
4 months of 2007, Chrysler sold a total of 71k cars outside NA (average
of 17.75k cars/month). One source claims these numbers are 10% to 15%
higher year over year vs 2006.

During the first 8 months of 2008, sales of Chrysler vehicles outside NA
_fell_ 12% year-over-year to 70.5k units (8.8k / month).

I'm sure that would help. The import taxes in foreign markets must be
significant.


See also:

http://www.prnewswire.co.uk/cgi/news/release?id=187447

------------------
January 4 / 2007

Launch of Chrysler Sebring in China

Production of the new Chrysler Sebring sedan for the China market will
begin later this year in Beijing at Beijing-Benz DaimlerChrysler
Automotive Co. (BBDC). BBDC is a joint venture between the Beijing
Automotive Industry Holding Co. Ltd. and DaimlerChrysler.

Production of the Sebring leverages assembly capacity at the new BBDC
plant, which also builds the Chrysler 300C, the Mercedes-Benz E-Class
and Mitsubishi Outlander. Four-cylinder World Engines for the Sebring
will be built at the Global Engine Manufacturing Alliance (GEMA) plant
in Dundee, Mich. for export to China. GEMA is a joint venture of
DaimlerChrysler, Mitsubishi Motors Corp. and Hyundai Motor Co.

Global Business Opportunities

Global partnerships and ventures are part of the Chrysler Group's
aggressive drive to create new business models that make sense for
today's global automotive environment.

The agreement with Chery - which is dependent on approval by the
DaimlerChrysler Supervisory Board and Chinese government - also
illustrates the alliance strategy. The partnership allows the Chrysler
Group to bring a low-margin subcompact car to market fast, meet targets
for low cost and high quality, with minimal capital investment.

Another example of the Chrysler Group's alliance strategy is a licensing
agreement, reached last year, which allows Russian automaker GAZ to
build the previous-generation Chrysler Sebring and Dodge Stratus sedans
for sale in Russia under the GAZ brand. As part of the deal, GAZ
purchased manufacturing tooling from Chrysler Group's Sterling Heights
(Mich.) Assembly Plant where the sedans had previously been built,
enabling the Chrysler Group to maximize its assets. Engines for the
sedans and other vehicles being built by GAZ will be supplied by the
Chrysler Group plant in Saltillo, Mexico.

 

So what's the evidence for your point, post-dictator?

"...keeping them from entering foreign markets..."

Are you just a xenophobe you can't bear the idea that an American company
is/was owned by a European one so having a go at Daimler Germany?

Nor can you advance your arguments -- which appear quite confused -- with
supposition

"... The import taxes in foreign markets must be significant."

In Europe it isn't.

Chrysler has failed manufacturing ventures in Europe going back to well
before Mercedes's ownership. Ford and GM have fared much better (GM has
owned Adam Opel since the twenties, for example).

DAS

To send an e-mail directly replace "spam" with "schmetterling"