Monday, 4 August 2008
Now For Something Completely Different
No, Not Monty Pithon, but my stab at being a business consultant for General Motors. General Motors lost over $15 billion (yes, billion with a 'b') in one quarter. They should not have been surprised. I could have told them why, if they'd asked me, and for only a small fraction of that fifteen billion.
I'm sure there is much more to it than this, but for a long time now, GM has no longer been the leader in the automotive world. They have become a poor follower, chasing after the leaders, giving the market away, then trying to catch up when it is too late. Back in the glory days of the 1950's, GM led the industry. GM came out with fins; everybody added fins. GM came out with a dog-leg windshield, everybody followed. In 1977 GM was the first to "downsize" their full-sized cars. I was managing a Chrysler dealership at the time, and Chrysler carried over their full size cars for one more year, hoping to capture some of the full-size market. They bombed. GM won, and the other North American manufacturers had to follow suit.
That was then, this is now. GM is behind the market in any number of ways. First, in performance. Only now are they coming out with sedans with horsepower. For the past few years, their Buick and Chev sedans had anemic horsepowere figures in the 190range, when their competitors like Accord, Acura, Camry, even Hyundai, boasted figures in the 260-270 range. Now it may not be politically correct to say it, but horsepower is still important. They may have been targeting old people with their underpowered cars, but a lot of old people still want to buy what young people are buying, and a lot of young people still buy performance.
Then there was the HHR (pictured above), the retro-station-wagon look minivan. They brought this model out just as Chrysler was ending the run of its successful PT Cruiser, again missing the market by several years. The next latecomer will be the new Camaro, scheduled, I believe, for the 2010 model year, again several years behind the new retro styled Mustang and now the Dodge Challenger, of which it almost seems a direct copy.
That's it for now, and thus endeth my career as consultant to the automotive industry. If anybody else has any input, we could get together and write a book about it.