Auto news in brief: Volkswagen passes Ford

[Neko-Bug]

Volkswagen passes Ford

Volkswagen AG moved ahead of Ford Motor Co. as the world's third-largest automaker by vehicle sales in this year's first half, according to figures the companies released last week.
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Volkswagen reported a 7.2% increase to 3.31 million cars and trucks, while Ford said its sales fell 11% to 3.09 million.

Ford is headed for another decline in the annual global sales rankings, after yielding the No. 2 spot to Toyota Motor Corp. in 2003.

Ford's U.S. sales fell 14% as gasoline prices rose above $4 a gallon, crimping demand for large pickups and SUVs. Its figures also exclude Jaguar and Land Rover, sold to Tata Motors Ltd. in June

From Detroit Free Press
http://www.freep.com/apps/pbcs.dll/a...807300325/1014

[scarabY2k]

Pretty cool. I think most of those sales were here in Jacksonville. We're pretty VW heavy here

[wawalker]

Good for VW, but nothing to celebrate, because, "as goes the auto industry, so goes the country."

[D2Beetle]

Given the Ego and/or Attitude of US Automakers, I think current events show how complacent they actually are and with that complacency, they worked themselves into their current predicament; if they expect to survive, they need to learn from it.

[wawalker]

Originally Posted by D2Beetle

Given the Ego and/or Attitude of US Automakers, I think current events show how complacent they actually are and with that complacency, they worked themselves into their current predicament; if they expect to survive, they need to learn from it.

I don't think it is fair to call them complacent--evryone knew this was coming for a good long while, but in many cases they were backed into a corner by several factors.
1. Small cars were not profitable or desired by a large segment of the market.
2. Trucks were very profitable and over 1/2 the market in recent years.
3. Union labor contracts make it hard to make big/fast changes.

Now that 1 and 2 have exchanged places very quickly (who could've predicted the jump from $3 to $4 gas would've happened practically overnight?) they are moving to close truck plants, bring in small cars they produce in other countries immediately, up production of small cars here, switch plants over to car production, etc. The minivan will make a big comeback with "soccer moms", and etc. I have seen something similar happen when I was a kid--lots of small 4 cylinder cars from domestics came out, big cars got V6 engines and the minivan was invented (nevermind VW had one for years). The domestics were in big financial trouble back then too--the govt. even bailed out Chrysler. So, this isn't new.

[buckod]

The one thing that is killing the US auto market is #3.

The Union labor contracts for the industry kill the auto makers.

The Union demands that each company produces X amount of vehicles with Y amount of colors, which guarantees work for the employees.

What ends up happening is that, for example, GM produces 45,000 red Hummer H3s. The market buys 20,000 and then there is the remaining amount sitting in dealerships and factories throughout the US. Multiply that with all the other vehicles out there and suddenly you see how GM has made a lot of vehicles that no one wants, so then they have to use incentives like 0% to move those units. So they sell the truck for nothing and make no money on the financing.
Do you notice how Toyota traditionally almost never has 0%?
They only produce units in regards to what sells. So if there is no demand for a red Tacoma, then they simply don’t make it. Toyota doesn’t waste money on making vehicles people don’t want to buy so in turn that equates to profit.

I don’t think that the US auto economy will collapse, it will simply shift to other companies that are producing vehicles here in the US like Toyota. If there are no GM Ford and Dodge trucks, well then guess who will increase the production of their line? Toyota for example will then open new factories to supply the demand for that market.

It is sad and a shaky future for our economy but we're still here after this year’s collapse and we will somehow get through it, with or without the larger companies that have COMPLACENTLY cruised through the past 20 years trying to stay current to most foreign companies innovations.

[Deserion]

Originally Posted by wawalker

The domestics were in big financial trouble back then too--the govt. even bailed out Chrysler. So, this isn't new.

But Lee Iacocca had a plan, Chrysler turned around, and paid off the loan. Funny how they're in the same spot again.

I doubt the "Moderate Three" will fail, but they do need a severe management change, and some hard plans to get their assets moving. One would think bringing in more Euro cars would help. Ford should bring the new Focus and Mondeo over (both nice cars), and the Transit to replace the Econoline (in the same way the Mercedes used the Sprinter to replace the Dodge Ram Van).

GM should keep working on using Opel/Vauxhall/Holden to supplement their lineup, such as other variants of the Astra (sedan/wagon), and market the hell out of them.

They have products overseas that can compete here, and are already produced. The only real hurdle is to get them Federalized, and get them coming in.

The Astra we get now (Saturn) is imported from Belgium.

The Moderate Three even have diesel options in Europe - bring them here if it meets emissions.

[larryziegler]

Originally Posted by wawalker

I don't think it is fair to call them complacent--
YEAH....I'LL CALL IT MISMANAGEMENT AND PLAIN GREEDY

1. Small cars were not profitable or desired by a large segment of the market.
TELL THAT TO HONDA, TOYOTA, AND NISSAN

2. Trucks were very profitable and over 1/2 the market in recent years.
TRUE.....BUT PUTTING ALL THEIR EGGS IN 1 BASKET AND NEGLECTING A BALANCED PRODUCT HAS YIELDED THEIR NEAR BANKRUPT CONDITIONS...THEY ALSO DID THEIR SHARE TO FIGHT THE FUEL ECONOMY REGULATIONS FOR THEIR PRODUCT LINES

3. Union labor contracts make it hard to make big/fast changes.
THEY COZIED UP WITH THESE LABOR ORGANIZATIONS TO HELP CREATE THEIR OWN PROBLEMS - BANKRUPCY WILL ALLOW THEM TO GET OUT OF THESE CONTRACTS, SCALE DOWN, AND BE COMPETITIVE WITH THEIR PRODUCTION COSTS

Now that 1 and 2 have exchanged places very quickly (who could've predicted the jump from $3 to $4 gas would've happened practically overnight?)
PEOPLE WERE COMPLAINING AND MAKING THREATS ABOUT MAKING SERIOUS CHANGE OF VEHICLE CHOICES WHEN GAS WAS IN THE MID $2 RANGE AND APPROACHING $3/GAL. THE BIG 3 HAD PLENTY OF TIME TO MAKE CHANGES TO THEIR PRODUCT LINE AND THEY DID NOTHING, EXCEPT ADD MORE CROSSOVER PRODUCTS. NOW THEY ARE SCRAMBLING LIKE CHICKENS WITH THEIR HEADS CUT OFF IN AN ATTEMPT TO SAVE THEMSELVES AND ADD ECONOMICAL CARS TO THEIR PRODUCT LINE.

LOOK AT THE AUDACITY THESE GUYS HAD IN FLYING CORPORATE JET AIRCRAFT TO MAKE THEIR PLEA FOR BAILOUT MONEY AND AFTER GETTING A SCATHING REPRIMAND, ARE NOW MAKING CHANGES. THESE GUYS ARE SUPPOSE TO BE LEADERS AND THEY ARE NOW ACTING AS FOLLOWERS. LET THE CHIPS FALL AS THEY MIGHT AND WHATEVER HAPPENS HAPPENS.

(Caps were used not to scream and shout but to differentiate my comments from Bill's......and definitely not being said with high emotion, but to state my point of view)

And from US News, here's their various rankings of cars/trucks by classification.....even some VW/Audi models making it in the top 3 in some areas.
http://usnews.rankingsandreviews.com...rankings/cars/

Here are 10 domestic models that could help bail out the industry
http://www.usnews.com/blogs/flowchar...e-detroit.html

Here is also their take on GM operating with a bankrupcy filing
http://www.usnews.com/blogs/flowchar...uld-benefit-gm

[wawalker]

Originally Posted by larryziegler

(Caps were used not to scream and shout but to differentiate my comments from Bill's......and definitely not being said with high emotion, but to state my point of view)...

Well, I said that all back in August and we are quite a bit further down the path now. Personally, I am in favor of Chapter 11 bankruptcy for the Big 3. A D.C. bailout will only put off the inevitable at taxpayer expense. I certainly do not want the govt. having a stake in the Big 3, that is so dang anti-American. I'm not all all happy the govt. owns so much of of financial industry now.

Originally Posted by buckod

The one thing that is killing the US auto market is #3.

The Union labor contracts for the industry kill the auto makers...

Yes, labor and labor-related "legacy costs" are about 50% higher for the Big 3 than they are for foreign companies producing here, which means one of 2 things: either you can't compete or you can't be profitable. Chapter 11 would give them an opportunity to regain a sound footing.