Don't Count Detroit Out!
As always is all about product... and great product can turn a company
around pretty quickly.
By Daniel Howes
For evidence that the predicted death of Detroit's automakers is
premature, drive by a Chrysler dealership.
Arrayed on the lot -- if the dealer is lucky -- probably sit a few 300C
sedans, their wide mouths and big eyes the face of how Chrysler can
still turn heads, do it with style and deliver it with a quality few
Remember, this is the same Auburn Hills automaker nearly everyone gave
up for dead just two years or so ago. How quickly times change: Now
Chrysler's booming car sales (up 66.9 percent this year) are propping
up its august sister, Mercedes-Benz.
The global car business is many things -- hyper-competitive, nasty and
powerful. What it isn't is static, which is why we need to take a
collective breath and get some perspective lest the spate of bad news
suffocate us all.
Is General Motors in a tailspin? Yes, mostly, judging by its public
rhetoric, swooning sales and financial statements. But is its product
portfolio, including cars and trucks expected to appear in showrooms
during the next year or so, a disaster?
Not from what I've seen.
Did Ford Motor Co. issue a profit warning for this year and signal that
it won't hit its $7 billion pre-tax profit target for next year?
Absolutely. But the company that booked record profits five years ago
on two SUVs and one pickup truck is now -- brace yourself -- actually
gaining ground in the car market.
It had better, given growing evidence that rising interest rates,
higher gas prices and SUV fatigue are conspiring to knock a big hole in
Detroit's profit sanctuary -- large SUVs -- and force more ugly
Sales of Ford brand cars are up 4.1 percent through March, according to
Autodata Corp., and Mercury cars are up 12.2 percent. The new Mustang,
a reinterpretation of the ol' classic with the performance cred to
match, is on pace to outsell even the Chrysler 300.
NoOp Comment: Go Mustang!!
Meanwhile, sales of Honda cars through March are off 12.7 percent;
Lexus car sales are off 5.6 percent; Nissan cars are down 3.2 percent
and Infiniti cars are off 2.1 percent. Only sales of Toyota cars, the
clear leader among Japan's Big Three, are up so far this year, and up
big -- 22.8 percent.
NoOp Comment: Pretty amazing, isn't it?
Now, the Detroit-is-doomed crowd can muster all sorts of reasons why
these trends aren't really as encouraging as they may appear. But I'd
offer this: If automotive trends are immutable, how do you explain
what's happening in the car market?
Answer: The game is far from over.
Detroit's thrashing by Toyota, painful as it may be, is a perverse
gift. Why? Because it continues to force the auto brass and their
people to change their methods, improve their products and focus on
customers, not petty internal squabbles.
And Chrysler's success with the 300C is an equally welcome gift to
rivals GM and Ford because it effectively proves that stylish,
competent cars conveying emotion are the best antidote to dull,
competent cars resembling household appliances.
If Chrysler's 300 has contributed anything to the uncertain prospects
for Detroit, it's hope and certainty that the end is not as close as it