Kiss of death for GM and perhaps Ford

I have a copy of the May 2006 issue of Car and Driver (magazine). The
magazine has an excellent article beginning on page 58 related 6 foreign
made cars that cost about $15,000 per car. They are really small cars (aka
economobiles).
These are the companies that make the economobiles:
Honda Fit Sport
Hyundai Accent GLS
Kia Rio5 SX
Nissan Versa 1.8L
Suzuki Reno
Toyota Yaris S

The car that came in first place in the comparison test was the Honda Fit
Sport. It actully "sailed through the lane change test 6 mph faster than a
Corvette Z06." The Honda Fit is now sold in 70 countries and is known in
Europe as the Jazz.

One of the reasons that Americans buy GM cars and Ford cars is because of
their low prices compared to cars made by Honda and Toyota. Now that Honda
and Toyota will be selling the Honda Fit and the Toyota Yaris at a cost of
about $15,000 per car, it means those people that plan to buy a low priced
new car in 2006 or 2007 will probably be buying a Honda Fit or Toyota
Yaris instead of a low priced Ford or Chevy. Do you agree? Do you agree
that this could be the final nail in the coffin for GM and perhaps Ford?
Jason

 

I think Car and Driver wants to sell magazines.

I don't know the shape of things to come in the consumer automotive market,
but I doubt anything will cause a huge shift of buyers from any major brand
to another. It seems to me most people have already made up their minds
which brands of car they would buy and which they will not.

I do recall that in the mid-70's one of the magazines (Road and Track, IIRC)
track tested various cars and the Ford Pinto beat the Porsche 911's time
through the slalom! Outraged readers wanted to know how the obvious error
got through, so the editors explained: understeering cars have an edge over
oversteering cars in the slalom, allowing the Pinto (shudder!) to beat the
Porsche. I just don't think that is why more Pintos were sold than were 911s
each year.

Mike

 

Actually it was 6 mph faster than the next fastest car in the
comparison and faster than the Corvette but we don't know by how much.
Still a very impressive showing.

As for being the kiss of death for GM and Ford, Gm and Ford never made
any money off economy cars anyway. The kiss of death for GM and Ford
is $3 gas which is killing their monster SUV sales.

 

Perhaps more telling was the Consumer Reports 2006 cars edition where CRs
data indicates that an 8 yr old Toyota/Honda has the same number of problems
as does a 3 year old Ford or GM product -- and a 2 yr old VW.

 

A major factor is brand loyalty regardless of that particular brand's
performance over the years. There are simply folks that will NEVER buy
a foreign car and then those on the other side of the fence that will
never buy domestic tin.

As far as "nails in the coffin" for any domestic manufacturer, one must
consider the costs (high labor), government mandates (far too intrusive)
and the public's response to sales campaigns.

I for one am not caught up in the "gotta get a new car" syndrome. One
of my daily drivers is over fifty years old while the other is almost
twenty-five years of age and that is way modern 'nuff for this ol' fossil...

JT

 

The only thing that can help GM is a 6 year bumper to bumper warranty. That
would get them a lot of sales. And probably bankrupt them paying for
repairs.

 

I have been saying the GM should put up or shut up about it's much
bragged about "quality improvements" with a much better warranty for a
long time now. Reasonable people see the logic, Mike Hunter does not .

John

 

I don't see much of a market for the Honda Fit. Most people would buy
the civic instead which offers so much more for less money. Same thing
with the Suzuki Reno vs the Suzuki Forenza. The Forenza is the better
choice.

America isn't built like prehistoric Europe where there is barely
enough room for foot traffic. People will buy the larger car for the
same price or for a slightly higher price than the smaller version.

It would appear that for every Toyota Echo that was sold there were 10
more Corollas that were sold. Can you see the pattern?
Air-

 

I would buy a GM or Ford car if they had any kind of reliability, I don't
mind spending the extra on the domestic brands, what I do mind is sticking a
bunch of money in it, just after the warranty expires.I think the bidy
styles are better looking than the foreign cars.

Tom

 

Sorry, but the Fit costs less than a comparably equipped Civic. I don't
know about the U.S., but there is definitely a market for the Fit here in
Canada, where gas costs much more than in the U.S. even after you do the
necessary conversions (metric to U.S., currency). The Toyota Echo actually
sold quite well here, and the Yaris looks like it will be equally
successful. So I have no doubt that the Fit will also do well here.

 

If the cost of gasoline rises to $4.00 per gallon, it's my guess that the
Honda Fit Sport, Toyota Yaris S and Suzuki Reno will be very successful.
That's the main reason those types of cars are so popular in Europe--since
gas prices are much higher in Europe than in America.

 

You are correct. I just re-read the sentence that you mentioned and it's
clear that I left out some of the words from that sentence in my
post--sorry.
You made a great point related to gas prices in regard to monster SUV
sales. It's my guess that GM and Ford will have a hard time selling the
monster sized pickup trucks if the gas prices keep going higher.
Jason

 

MIke,
You must be much younger than me. I remember the 1970's when there were
lines of cars at every gasoline station. They even had to ration gasoline.
It was the main reason the Jimmy Carter lost the election for a second
term. The best selling cars (in the !970's) became the really small cars
such as the Honda Civic and the Volkswagen Bug. If the cost of gasoline
rises to $4.00 per gallon, it will cause a shift to cars such as the Honda
Fit and the Toyota Yaris. I doubt that GM and Ford will sell very many
monster sized SUVs and Pickups if the gasoline rises to $4.00 per gallon.
Jason

 

OK so the Fit is a little less. You still missed the point. Americans
in general do not gravitate towards mini-compact cars. The situation
is different in Canada. Yet In Canada people still buy big SUVs. Ever
watched the TV show "Help you sell" based in Quebec Canada? They are
driving an Explorer or a Jeep Grand Cherokee.



Air-

 

OK so the Fit is a little less. You still missed the point. Americans
in general do not gravitate towards mini-compact cars. The situation
is different in Canada. Yet In Canada people still buy big SUVs. Ever
watched the TV show "Help you sell" based in Quebec Canada? They are
driving an Explorer or a Jeep Grand Cherokee.



Air-

 

No, I didn't miss the point. I was only pointing out that there is a market
for those small cars in other places around the world.

Yes, people are still buying big SUV's here, but not in the large numbers
of, say, 10 years ago.

 

I can come up with several reasons Carter lost the election, all of
which are based on his total incompetence.

1. Foreign Policy blunder #1: Returning the Panama Canal to Panama

2. Foreign Policy blunder #2: Inability to deal with the Iranian
hostage crisis

3. Foreign Policy blunder #3: Failure to deal with the Lebanese civil war

4. Gutting the military (as evidence by the failure of the Iranian
hostage rescue attempt)

5. Presiding over double digit inflation

6. The pardoning of Vietnam War deserters

Worse, his incompetence carried forth in later years such as being the
main architect of the North Korean nuclear issue (along with Richardson
of New Mexico).

Jimmy Carter, the Millard Fillmore of the 20th century...

JT

 

You bet! I really chuckled over that one...

JT

 

Hello,
If the cost of gasoline rises to $4.00 per gallon, the Honda Fit Sport,
Toyota Yaris S. and the Suzuki Reno will become the best selling vehicles
in America.
Of course, lots of people that can afford it will continue to buy full
sized pickups and SUVs. There are lots of people in America that can't
afford to spend $50.00 or more per week for gasoline. I know several
people that drive over 50 miles per day to and from work.
Jason

 

If Gas rises to $4 a gallon the best selling cars in america would be
the Prius and the Civic Hybrid. Including the cars that run off of
compressed natural gas. Motorcycles would start picking up in sales in
a way that the states would have never seen before.

Sure the Fit and Nissan version would be top sellers too but the Prius
would be one of the most desirable. Honda Insights would start selling
for a lot of money used.


O3-