R.I.P. General Motors (1931-2006)

Where did you get the numbers?

Jeff

 

Dodge makes full-size pickups. Honda recently entered the market. I think
Toyota is going to enter the market too.

With Toyota's participation in NASCAR (now in trucks, in Nextel Cup next
year), I suspect that Toyota's sales will go up.

I am not suggesting that Dodge, Honda and Toyota offer that much
competition. But they will.

Jeff

 

And world-wide sales of Toyotas is expected to exceed GM's by next year.

Jeff

 

There are numerous laws in place to prevent price-fixing by manufacturers,
which is why the Monroney label lists manufacturer's *sugested* retail
price. I do not know how Saturn division is able to enforce a no-haggle
policy.

Automakers cannot dictate cheaper prices for fleet sales but they can offer
fleet incentives to fleet purchasers of 5 or more vehicles.

The main reason that Toyota has not been as active in fleet sales as GM and
Ford is that Toyota has not had the production capacity to support to
compete with GM and Ford's volume. As Mike has correctly pointed out, there
are basically 2 categories of fleet purchasers - rental companies that
change every year so that their fleet remains current, and users that keep
vehicles based on tax depreciation and utility. Mike is also correct that
fleet buyers base their decisions on overall cost of ownership, including
acquisition, maintenance, repair, operation, resale, and suitability for
intended use. In some cases, origin is important - most government
purchasers buy U.S. nameplates. I disagree with Mike that Toyotas are more
costly to service and repair. My experience is mostly with Toyota, and some
domestic brand parts are less expensive and some Toyota brand parts are less
expensive so that overall, assuming the same overall vehicle reliability,
neither has a distinct advantage. Of course, that invites the discussion of
whether one brand is more reliable or durable than another, based on which
study one wishes to believe and one's anecdotal experience. From my
experience dealing with fleet operators, especially those with in-house or
contracted maintenance and repair facilities, the cost difference during
their ownership period is not large enough to turn them overwhelmingly
towards imports and in the end, acquisition price is the determining factor.

 

Honda does not make full-sized pickups. The only imports with full-sized
pickups for sale in the U.S. are Toyota and Nissan. Toyota has been in the
market for over 10 years with the T100 and first generation Tundra, with the
second generation Tundra going on sale in the fall.

 

Jeff,
It's my guess that in the year 2010, the foreign car companies that you
mentioned will be sell as many pickups as Ford and GM sold in 2005.
Do you agree or disagree?
Jason

 

Ray,
The most important thing that you stated was:

American car companies or dealers probably make sure they sell at least 5
or more vehicles so they can't grant special deals and discounts. One of
the other posters mentioned that GM and Ford own lots of stock in Avis.
These two factors could explain why you will find more GM and Ford cars on
the Avis rental lots than foreign cars. When I rented a car from Avis,
almost every car on the lot was a GM or Ford car. They did not have any
Honda cars and only two Toyota cars. I rented one of the the Toyota cars.
I should note that they had one BMW but the rental rate on that one was
twice as much than the Toyota car that I rented.
Jason

 

(...)

Saturn doesn 't set the price. Their dealers do. However, the dealers also
set a no-haggle policy. The Saturn Corp. can't.

I am sure a lot of dealers are willing to provide quantity discounts, as
well.

Automakers can dictate discounted prices for their employees at dealerships.
Most or all dealers agree to the discounted prices. I assume that the
dealers still make a fair profit on such sales, perhaps because of rebates
to dealers from the automakers.

<...>

Jeff

 

You should be buying stock if you think you can predict what the future
holds. We are taking about the real world of vehicle sales in the US. The
fact remains GM, Ford and Chrysler sold 54% of all the 16,500,000 vehicles
sole in the US in 2005. The twenty some import brand shared the 43%
balance. If buyers actually believed as you do that imports were a better
place to spend their money, they would have purchased their vehicles, rather
than a vehicle from GM, Ford or Chrysler

You are assuming a lot that is factually incorrect. Manufactures do not,
and can not, sell directly to anybody. To do so would be a violation of
federal and state franchise laws. Manufactures can only sell to dealers
and at the same price. Fleets buy far more trucks than cars and the imports
can not compete very well in the light truck market Some imports sell to
distribution centers and they sell them to dealers after they add equipment
if needed Nearly every manufacture tries to sell to fleets and offer a
discount to the dealer that sells more than five to one buyer. It is just
that the domestics and the Koreans are more successful at selling to
corporate and government fleets than the others. The discount average
around $600, hardly a huge discount. The fact that fleets prefer domestics
because the are the most cost effective in terms of the cost of accusation,
insurance, maintenance, repair, parts and replace. Imports are more
successful at selling to rental companies. Rental companies generally sell
off the 'product,' the cars, in a year or less. Contrary to what you
believe corporate fleets keep their vehicles, which are just one more 'tool'
used in the business, in service for five years or 300K because of federal
tax deprecation laws. As a result their vehicles generally receive far
better care and preventive maintance than does the average vehicle. No
manufactures, not even Ford, who controls the largest percentage of fleet
business sells more than around 15% ANNUALLY to fleets. The third quarter
dealers need the most new vehicles, the first quarter is when fleet get most
of their vehicles making the appear higher. What difference does it make
anyway as to who buys one product?

Indeed imports have been taking a larger share but the pie is much bigger,
averaging around 17,000,000 since 2000. Everyone like to refer to 'share'
and forget about not numbers. GM in the early fifties had around 50% of the
market. GM, Ford and Chrysler are generally selling as many or more today
as when the were three of eight US manufactures and the total sales were
only 6,000,000 vehicles. In the past ten years the domestics have been far
more successful, than the import. in growing market share where the growth
in vehicles sales has occurred, light truck including SUVs Teh top selling
vehicle in the US are not cars they are trucks and GM, Ford and Chrysler
are one two and three. Toyota any be one some day, They compete and build
vehicles at the bottom end, in the growing market in the third world where
GM, Ford and Chrysler lag behind. However today in the biggest and richest
world markets, like the US and Europe, Toyota lags behind. Teh Camry is the
number one selling car in the US but sales in its own country are dismal


mike hunt

 

Every manufacture is making good dependable vehicles today the only real
difference among them is style and price


mike hunt

 

You're right. I was thinking the Ridgeline is a full-sized truck. It is a
mid-size truck.

Jeff

 

U-Haul stopped renting to Explorer owners because of Firestones tire
problem, not because there was a problem with the vehicle. The figure is no
where near 60%, and what possible difference does it make who buys ones
product?


mike hunt

 

(...)

I disagree. I think it will take a lot more than four years before the
foriegn automakers overtake GM, DC and Ford in truck sales. The foreign car
makers have been here for 35 or 40 years, and they still don't sell more
cars than the big 2 + DC.

Jeff

 

I sold my Chrysler stock for around $30 a share, that I bought in the
seventies at around $3 , before they merged with MB.

Literally hundreds of car companies have gone out of business, or where sold
off, in the hundred or so years that cars were sold in the US. The only
stock that I lost money with was Studebaker and Pennsylvania Rail Road.


mike hunt

 

Do you mean they *can* grant special deals and discounts?

As a former employee of an automaker, I am familiar with its policies
regarding fleet and retail sales and dealer operations. Rental car
companies are a big portion of fleet sales but by no means the only source
of fleet sales.

 

I have not read Saturn's dealer agreement (what people often refer to as a
franchise agreement) so as I mentioned, I do not know how the no-haggle
policy works. I have read other dealer agreements, and have had attended
numerous seminars given by an automaker's legal department regarding the
avoidance of price fixing and violation of anti-trust laws.

From my understanding of the seminars I have attended, having a group of
dealers get together to determine pricing is a violatio of anti-trust laws.

From talking with a Saturn dealer, one of the big differences in the Saturn
dealer agreement is that Saturn Division assigns larger geographic markets
to a dealer so the dealer is responsible for sales and service for that
market instead of a single point. I a dealer has the market for Anytown
U.S.A., then the dealer is free to set the prices for all of the stores in
Anytown. I believe but cannot confirm that this is how Saturn is able
achcieve uniform prices in a market.

Dealerships work on an allocation basis. The vehicles allocated to them for
retail sales are separate from the vehicles allocated to them for fleet
sales.

 

You can believe whatever you chose. The industry wide fleet discount
averages around $600 if one buys more than five. There are additional
discounts available to governments fleets that buy hundreds but generally
they are no more than an addition $600. Many of the rebates offered to
individuals, by domestics and imports, are far greater than $1,200. In any
event the sale must go through a dealership no matter what you believe.

Ford, in the late nineties, bought back some of its franchises from the
older, smaller, 'mom and pop' dealerships to build big stores to operate as
company owed stores, in competition with franchised dealerships. The Nation
Ford Dealer Council, of which our group was a member, stated franchise
infringement litigation. The court issued a cease and desist order and
instructed Ford to divest themselves of the stores


mike hunt

 

There are indeed state franchise laws, in almost every state of which I am
aware. As with most federal laws however, the state laws can increase
benefits protected under federal law, but they can not infringe on the
federal government rights under the commerce clause. I E a states minimum
wage law can be for an amount greater than the federal law, but not lower.


mike hunt

 

54% + 43% = 97%.

There are a lot of reasons why people choose a car to buy. And a lot of
people chose foreign makers.

Toyota barely lags behind GM worldwide. And it is expected to be the #1
worldwide seller this year or next.

Jeff

 

If it takes one a days pay, to buy fuel to get to work for a day, he working
at the wrong place


mike hunt