Uh, Honda is a lot closer to GM than GM is to Toyota.
And I wonder what we'd see if Mercedes was listed. And Porsche low?
Heck, every Porsche owner I know buys another one. That's one reason
Porsche has the highest profit margins in the industry.
Isn't there another way to look at this? 45.4% of the people buying Fords
are trading in something else. Isn't that possibly a good thing for Ford?
Maybe the headline could have been "Ford Captures New Sales From Other
Brands." Suppose 100% of the people buying your brand were people that owned
your brand, would that be a good thing? It would show a lot of Customer
loyalty, but it would also mean you weren't capturing new Customers. I have
to wonder what the ideal number would be. Probably one reason Scion numbers
were so low is that it is a new brand, so there are not many "old Customers"
with cars to trade in.
I guess this is like a lot of statistics - the meaning is determined by the
people reporting the statistics. Which brings me back to one of my
perceptions - the press loves Toyota.
Well, no. That's not what the numbers say. They're saying "of people
whose last car was a Ford, 54.4% are buying a Ford this time" --
they're losing half their customers on the next purchase.
"Of people who bought a Ford, x%'s last vehicle was something else"
would be a different statistic. And it's the other statistic the
automakers want: capture from other makers.
Certainly true. But, really, the actual headline and story are very
accurate and spin-free: they report both that Toyota's customer
loyalty is No. 1 (excuse me while I go get some Tums -- my daughter
loves the Damned Toyota truck that is the most reliable vehicle we've
ever owned for 206K miles now, but is a bigger pain in the butt to fix
when it does finally break than every other vehicle we've ever owned
combined -- thanks, my heartburn is better now), and that GM's is, in
their words "close behind".
After reading the actual JD Power Press Release, I see that you are correct.
It is not that 54% of the people buying a Ford traded in a Ford, it is that
54% of people who bought a Ford last time, bought a Ford again. I wonder how
someone like myself figures into these statistic. In the last 22 months, I
have bought three new vehicles, two Fords and Nissan. I didn't trade
anything in. But one of the vehicles I sold was a Ford, one was a Pontiac,
and one was a Mercury. Not to mention a couple of other vehicles I got rid
of in the last three years (a Saturn and two other Fords). If they had
surveyed me in Feb of 2006, I would have said I replaced a Saturn with a
Nissan (but not exactly directly). If they had asked in July 2006, I would
have said I replaced a Pontiac with a Ford. And if they had asked in
December of last year, I would have said I replaced a Mercury with a Ford. I
am getting ready to buy two more cars (one for my Sister and one for my
older son). It is likely I'll get a Toyota for my Sister to replace a Honda,
and a Mazda for my Son to replace a Honda. So am I personally destroying the
Honda retention rate? Interestingly, if I was buying a car for myself, it is
likely I'd replace a Ford with a Honda. And next year or the year after when
I need a new truck, I'll probably replace a Nissan with either a Toyota or a
Ford (depends on whether or not Ford can fix the F150 for 2009 - I hate the
current F150, the only worse truck is the horrible carton Tundra - at least
I could still get a Tacoma).
So far, ALL of this supports my claim which I started realizing a few
years ago: Toyota today is the GM of 1970. They have market dominance,
they have repeat buyers, they have a long track record, but their
product is declining at an incredible rate. Next thing you know they'll
bring out their equivalent of the Vega (oh wait, they already have
Scion), and they'll start putting small-car components in 3-ton
vehicles ala TH-200 transmissions in Oldsmobiles (oh wait- they already
have the Tundra with its crap brakes and defective camshafts...)
Don't forget Toyota, like GM and Ford before, will soon start cost cutting
measures to increase profits at the expense of quality and reliabilitiy - oh
wait they are planning just that....
"Watanabe: Toyota will save $2.7 billion a year
December 11, 2007 - 6:50 am ET
TOYOTA CITY, Japan (Reuters) - Toyota Motor Corp. expects to accelerate its
cost-cutting efforts next year to save more than $2.7 billion annually, its
president said today, as the world's biggest carmaker seeks to offset rising
commodity and development costs.
"We would expect to exceed what we've done under the previous plan,"
Katsuaki Watanabe told Reuters in an interview at the company's headquarters
in Toyota City.
That amount should grow every year along with rising sales, he said, as cost
reductions would be made on a per-vehicle basis.
Since 2005, Toyota has been working on a new cost-saving strategy dubbed
"VI" for Value Innovation, which seeks to lump some of the tens of thousands
of components in a car into modules and systems. The first car to
incorporate the new scheme, a remodeled Crown sedan, is due out early next
"I believe the strategy is basically proceeding as planned," Watanabe said.
Toyota has given scant details on the program's target, saying only that it
expected the impact to be faster and bigger than a previous plan to cut the
price of individual parts.
That plan, called CCC21 (Construction of Cost Competitiveness in the 21st
Century) and led by Watanabe as purchasing chief, shaved $9 billion off
costs over five years, and executives have said it had the capacity to
eliminate 300 billion yen in costs every year. That is equivalent to around
13 percent of Toyota's operating profit of 2.24 trillion yen last year.
The ability to reduce costs has been Toyota's forte, allowing it to pour
money back into developing new models and attract drivers around the world.
Toyota began selling the Prius, the world's first gasoline-electric hybrid
car, 10 years ago and is still one of just a handful of carmakers to
mass-produce the gas-sipping vehicles.
"The fact that they're planning to build on the CCC21 plan is remarkable,
and attests to Toyota's unique strength as a high-volume carmaker and its
group companies' solidarity," UBS Securities auto analyst Tatsuo Yoshida
"It'll give them a free hand to use their resources flexibly, including
securing even more customers by building more attractive features into their
cars," he said.
CRUCIAL 10 PERCENT
Slashing production costs is even more important as commodity prices keep
climbing, environmental and safety standards rise and consumers migrate
towards smaller and lower-margin compact cars to get better mileage.
At the same time, Toyota has promised to reach and sustain a 10 percent
operating profit margin. Already its margin is the highest in the sector, at
9.3 percent in the year to March 2007.
Watanabe said reaching the 10 percent margin was "crucial" to be able to
invest to the tune of 1.5 trillion yen a year each on facilities and R&D to
develop safer and more environmentally friendly cars.
The VI project will be incorporated into each new model that Toyota rolls
out from early next year, meaning the effect will grow from year to year,
"The full impact will be seen probably around 2010," he said, adding that
Toyota would step up its cooperation with North American and European
suppliers to expand the cost-cutting activities beyond Japan.
Watanabe, known in the company for his "big-picture" vision, is looking
beyond the ambitious VI project.
By 2010, the 65-year-old executive said, Toyota will likely have crafted a
new scheme to replace the VI plan.
"By then we'd be looking at the car's design as a whole, for example by
using lightweight materials," he said.
"I don't want to divulge too much, because this is really a corporate
secret," he said, but added that there was a hint in the 1/X concept car
shown at the Tokyo Motor Show which weighs just 420 kg -- one-third of the
Prius, with twice its fuel efficiency.
Toyota is the world's most valuable automaker, with a market capitalization
of more than $200 billion. Its revenue reached $215 billion last business
year as sales grew in North America, Europe and China, although Toyota is
conspicuously behind in the budding Indian market.
Toyota has forecast sales of 9.34 million vehicles this year, including
units Daihatsu Motor Co. and Hino Motors Ltd., likely toppling General
Motors as the world's top seller of automobiles. Excluding GM's
minority-held Chinese joint venture, Toyota ranked first in 2006.
By 2009, Toyota aims to expand sales to 10.4 million a year.
Motorsforum.com is a website by car enthusiasts for car enthusiasts. It is not affiliated with any of the car or spare part manufacturers or car dealers discussed here.
All logos and trade names are the property of their respective owners.