Archive for the ‘Car Product Stategy’ Category

I’ve been wondering for some time what Ford’s plan for survival, much less success, might be. Detroit has traditionally gotten by by hitting one out of the park from time to time–while striking out most times at bat.

But Ford isn’t swinging for the fences the way GM is. Its cars aren’t dramatically styled. It doesn’t have a moonshot like the Volt in the works.

Instead, Ford is serving up a big dose of “sensible transportion.” Didn’t that fail with the Five Hundred? But here we are seeing the Fusion get a lot of practically-minded press for strengths like reliability and fuel economy. In other words, Toyota’s turf.

For Ford, this is a tough sell that, if it works at all, will involve years of slow, steady growth. The idea is that people will hear enough times that the Fusion gets the best gas mileage, is as reliable as a Toyota or Honda, etc. that they’ll cross-shop it with the Camry and Accord. Then they’ll discover it’s cheaper, and give one a shot. Then, if they like it, they’ll not only buy another to replace it but tell their friends.

No, it’s not a recipe for overnight success. But it might be a recipe for long-term survival.

To see how the Fusion stacks up, start with our Ford Fusion information page.

Every once in a while while checking the car pricing data I come across something that must be an error, except it isn’t.

I came across such a case when going over the 2009 Mercedes ML350 today. On the ML350 you can get leather upholstery. And you can get a “Heating Package,” which includes heated seats in both rows and a heated steering wheel.

But you can’t get leather and the Heating Package together. Instead, the latter is only available with the standard vinyl seats.

Just a few months ago seemingly everyone was criticizing Detroit for failing to foresee $4.00 gas and develop fuel efficient cars accordingly. Even today we hear that these companies should refocus on alt fuels.

But how many of those who claimed that Detroit should have spent billions of dollars to develop more fuel efficient vehicles predicted that fuel prices would fall by more than 50 percent in just a few months?

If gas remains below $2.00, or even below $3.50 (which seemed to be the tipping point), who will buy these alt fuel cars? After all, they’re going to cost a lot more than conventional cars, especially at first.

Talk is cheap, hindsight is 20/20, and when events move too quickly even for hindsight, there’s always amnesia. Has anyone who chided Detroit a few months ago for not offering fuel efficient cars stepped forward and said, “Well, I was wrong. Fuel prices are back down, and then some, so the solution isn’t as simple as it seemed?”

In reality, with fuel prices so unpredictable and currently low, investing in fuel efficient and alt fuel cars is much more like buying health insurance than the core of a viable business. Now, health insurance is always good to have. But Detroit has been like a family just barely scraping by–keeping up with insurance payments takes a back seat to paying the mortgage and putting food on the table.

What do people do when they haven’t paid for health insurance, then get sick, and can’t work enough to pay the mortgage? They ask for government assistance, of course.

In one of Peanut’s classic gags, Lucy told Charlie Brown time and time again that she’d hold the football for him so he could kick it, only to pull it away at the last minute.

American car buyers like to do this with GM. They say, “If only you offered the products you sell overseas in the U.S., we’d buy them.”

So GM gave this strategy another shot. The Holden Commodore is now available as the Pontiac G8, and the Opel Astra is available as the Saturn ASTRA.

Days supply–the number of cars in inventory divided by the number being sold each day–is around 60 when supply and demand are well-matched. With sales way down, this figure is up for everyone: the average for the entire industry is now 100 days. But the G8 and ASTRA still manage to stand out. Pontiac dealers have enough G8s on hand to last for 283 days. And Saturn dealers have enough ASTRAs on hand to last for 411 days–more than an entire year.

I’ve never seen a days-supply figure over 365 before. Well, at least they’ll have cars on-hand if the government does as some are suggesting and provides a tax credit for people who buy fuel-efficient American cars. Except that the ASTRA is made in Europe.

Well, now I know what Chrysler had been up to. Few if any new products are on the horizon–no surprise, since the company seems very unlikely to survive in anything resembling its present form. But every Jeep model except the Wrangler did receive an upgraded interior this year. Too bad they didn’t take this step back when Jeeps were still in demand.

I haven’t had a chance to check out the improvements myself yet. Most notable: all but the base trim Grand Cherokee and Overland get leather-upholstered door panels and center armrests. The Grand Cherokee also gets a leather-upholstered instrument cluster hood. Usually “leather upholstery” means that the main seating surfaces are leather, while everything else that looks somewhat like leather is actually vinyl. So Jeep is taking a step into premium luxury car territory with the 2009s. For anyone who didn’t buy a Grand Cherokee SRT8 because they interior was just okay…

Many have argued that if an automaker puts a few hundred dollars more into a car’s interior they can charge much more for the car, because the impact on perceived quality can be substantial. Well, Jeep appears to have bumped prices only about $200 to $300 to cover the cost of these upgrades. Since sales of these models are weak, they aren’t the best test of the conventional wisdom with regard to interior quality. But they are a test.

Back in April 2007 I heralded the 2009 Ford Flex as a sign of life at Ford. By applying cues from the cult-inspiring styling of the Scion xB and MINI Cooper to a much larger three-row vehicle, I predicted that Ford had the magic formula for people seeking a people mover with style.

Well, the 2009 Ford Flex arrived at dealer lots last July, and has tended to stay there. Sales in August were barely better than those of the “dead vehicle rolling” Taurus X (the forgettably styled vehicle on which the Flex is based).

As noted in a comparison test between the Ford Flex and Chevrolet Traverse that I recently wrote for The Truth About Cars, the Flex has many strong points, most notably a lot of room, a smooth ride, and extremely comfortable seats.

So, why the dismal sales? Well, it seems that the gamble Ford took with the exterior styling has failed. Based on comments on that review and elsewhere, some people really like the styling. But more do not. Not necessarily fatal–except that those who like it tend to be men, while this type of vehicle is usually driven by women. And women tend to be in the “hate it” group.

I’ve experienced this in my own family. I’ve long liked the Freestyle, and figured that the Flex might be a good future vehicle for my wife. She doesn’t care for cars that look like everything else, and currently drives a PT Cruiser for this reason. But the first time I pointed out a Ford Flex on the road, she hated it, saying it looked like “a big wagon thing.” And her opinion hasn’t changed in the months since, nor is it likely to.

My wife’s comment points to a second problem with the Flex: it’s larger than most people want a vehicle to be lately, and its rectilinear styling and relatively low roof make it look even longer than it is. The cost is probably prohibitive, but otherwise Ford should consider slicing a few inches out of the wheelbase and rear overhang.

Has anyone else noticed a similar pattern, where men like the Flex and women do not? Any women out there who like it?

Back in 2001 the Toyota Altezza arrived in the U.S. as the Lexus with a price in the low 30s. The interior didn’t seem worthy of a Lexus, and the price was beyond the reach of many who would otherwise buy a small rear-drive sedan.

Ever since then I’ve been waiting for a manufacture to fill an obvious hole in the market by offering a compact, affordable rear-drive sedan. Better yet, for me, a compact rear-drive foor-door hatch or wagon. I’d like to see a curb weight around 3,000 pounds, 225 horsepower, and a reasonably equipped price in the mid-twenties.

With gas prices up and people suddenly interested in compact cars and far less interested in brute power, the time is ripe. Just because gas is pricey, doesn’t mean cars have to become boring. They just have to become smarter.  

A compact, relatively light rear-drive sedan wouldn’t only be more affordable and economical than the 3-Series wannabes that have attracted so much attention in recent years. It would also handle better than these cars. It would be the family car of choice for driving enthusiasts in the age of $4+ gas.

Now who’ll deliver such a car first?

March 2008 is just now ending, and already a number of 2009 models are available. Legally, a car can be a 2009 as soon as the 2008 calendar year begins. Some people will take exception with this. Why can’t the model years match the calendar years, or at least come close?

Well, before make this request, consider the alternative. Some manufacturers when they introduced a redesigned or updated model in the first half of the calendar year don’t change the model year. Instead, they have two sometimes totally different products that share the same model and model year.

The solution in this case is to refer to the new vehicle as a half year model. For example, Volkswagan introduced the current Jetta as a 2005.5 and Volvo introduced the current S40 as a 2004.5.

The problem I have with this approach is that the owners of such cars often don’t know about the half-year desigation, especially if they’re not the original owner.

This complicates the task of providing reliability information on these cars. And, if you’re a used car shopper looking to buy such a car, you’ll need a photo to be certain you’ve got the right one.

Buyers can also benefit from the early start of a model year; down the road a 2009 will be worth more than a 2008.

So, personally, I’m all in favor of starting the model year early whenever an updated or thoroughly redesigned model is introduced early in the calendar year.

I visit many forums, and one topic comes up again and again on those for Toyota and Lexus models: many options and option combinations are simply not available. At least not in your area, or not this month.

Sometimes no cars without options are available. Sometimes you can get the Premium Package, but only if you also get a Towing Package and a Preferred Accessories Package that includes overpriced floormats, cargo nets, and such. For months after the 2006 Toyota RAV4 was introduced, maybe for a whole year, the much-marketed third row seat was not officially available where I live.

I’ve heard that some dealers will special order a car if one with the options you want (and without the options you don’t want) is not available. But many resist this.

Toyota has said that they decide what to offer in a given place in a given time based on what is selling there. But since what is on the lot is what sells…

TrueDelta’s pricing system will display all theoretically possible option combinations for Toyota and Lexus models, not just those that are readily available. Every other third-party site I’ve checked does the same. I suspect this is because no one but Toyota can keep track of their insane system for officially offering only a limited number of option combinations in any given region at any given time.

It reminds me of the stories you used to hear about Soviet supermarkets: meat this week, butter next week, maybe soup the week after that. And if the soup is available, it might only be available if you also buy biscuits. You’ll know when you get there.

Frankly, few other manufacturers could remain in business with such a product allocation system. It’s amazing that Toyota and Lexus have done so well despite it.

Trollhattansaab.net’s Swade has posted an open letter to Steve Shannon, Saab’s new boss. To his suggestions, excellent as always, I’d like to add my own.

My feeling is that Saab has lost its way and forgotten much of what made its cars attractive when they were last hot, back in the 1980s. It hasn’t helped that GM bought Saab thinking it was buying a Swedish BMW. Premium European manufacturers are not interchangeable.

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