Cost per Car of Ads...

Page 2 of 2  
On 04/07/2010 03:34 AM, dr_jeff wrote:


accounting practices for things like this are somewhat "elastic". i.e. you can load a foreign operation with a bunch of your domestic expenses to "help" the reported profits and tax burden, etc. bottom line, g.m.'s [better managed - better product, more competitive] foreign operations have been carrying the company for years, the european one particularly, even though the european is a very high [real] cost environment.

--
nomina rutrum rutrum

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote

I don't agree that GM's European operation have been carrying the company for years. In fact, I suspect the opposite is true recently. Opel has been struggling for decades. Saab is gone. GM does actually sell a significant number of "Chevrolets" (mostly rebadged Daewoos) and Cadillacs in Europe which is surprsing (at least to me). As you say, interantional companies can and do manipulate earning transfers between countries mostly to try and minimize taxes.
Your comment about Europe being a very high cost environement is true but you ignore the fact that the playing field is much more level in Europe. European countries all have government run health care programs, so GM is not saddled with paying for deluxe health care for workers while some competitors with younger non-union work forces don't have the same high health care benefit costs. Western European countries all have strict pension rules, so while GM may have high pension costs in Europe, so do all the competitors.
Ed
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 04/08/2010 04:31 AM, C. E. White wrote:

"recently" being the last couple of years. prior to that, it was solid blackline. and don't forget the accounting flexibility - internationals have considerable latitude in how they report these days and right now, to attract more of the bailout €'s the germans have been throwing about, you can bet that g.m.'s euro ops are "losing money".

not true. they have enjoyed significant profits, and have been ranked # 1or 2 in the euro sales leagues for ages. see above.

saab was already gone. g.m. should never have bought it. but they sure did hasten saab's demise.

and whine for subsidy €'s.

you've been suckered in by too much propaganda. european employers get charged directly by the state for health care. as do employees. when i was last there, it was ~10% employee, with an additional ~10% employer. that's a 20% total wage burden, which of course is effectively all paid by the employer. [this is in addition to income tax of course. it all amounts to the same thing, but i guess differentiation is one of those deceits that makes it more acceptable to an electorate.] then there are all the other local and state taxes they pay, which also have public health components. the only thing that keeps this whole thing manageable is that through their centralized systems, inefficient though it may appear, their percentage of gdp spent on health care is roughly half that of what we spend.

and massive union burdens too. you cannot fire underperformers in germany.

indeed, they have significantly higher costs, but can still make a profit. whereas they say they can't here. what is wrong with this picture?

--
nomina rutrum rutrum

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote

I did not say GM doesn't have higher costs in Europe. They do. I said the playing field was more level in Europe. It is. In the US, GM has to go head to head with Asian car makers that have much lower benefit and pension costs. In Eurpoe, all automakers work under the similar constraints (even Nissan, Toyota, and Honda). Eurpoeans restrict imports to a degree unknow in the US. Despite years of trying Toyta has never passed a 6% market share in Europe.
While I agree that in the past Opel made moeny and much of the profit was shifted to GM in the US (mostly for tax reasons), I don't see how you are assuming Opel is making money now and GM is hiding it. Opel's European market share has recently been below 7%. This way down compared to the past. GM is closing at least one Opel factory and others cuts are planned. GM would have sold Opel, except they realized with all the US cuts, they needed Opel's engineering to help with smaller cars. Opel is in just about the same state as is GM in the US. Here are some references:
http://wot.motortrend.com/6606781/auto-news/opel-five-year-plan-announced-profit-expected-by-2012/index.html http://www.reuters.com/article/idUSTRE6210UW20100302 http://www.encyclopedia.com/doc/1A1-D98JOPKG0.html http://www.thebigmoney.com/blogs/shifting-gears/2010/02/12/gm-s-turnaround-europe http://media.opel.com/content/media/intl/en/news/news_detail.brand_opel.html/content/Pages/news/intl/en/2010/OPEL/02_09_opel_nick_reilly_future http://gmeurope.info/MOPIDB/download.htm?03C2211F5E0001D6D4D0b4a9E1E3b0a2b2A2b4D4D0EF05C0A2a6D4bC1B082111EbIGdhfCj http://dealbook.blogs.nytimes.com/2009/11/25/gm-to-present-unions-with-strategy-for-opel /
Ed
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
C. E. White wrote:

That's a good way to look at it.
They also pay a large part of the cost of my favorite sport, NASCAR.
Let's see: Not having to think about body odor, free basketball and other sports plus NASCAR?
Or, another way to think about it: You paid for the basketball, deodorant-free games and NASCAR when you bought your last car.
According the first law of thermodynamics, there is no free lunch. And, the second one says you can't even break even.
Ford sells around 1.5 million vehicles a year and spends about $1.5 billion on advertising. That's about $1000 per vehicle. Now, that's a deal.
Jeff
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 05/04/2010 9:20 AM, C. E. White wrote:

But Toyota is value added.
You paid for GM. Ok, you haven't, but it is on your debt tab in DC.
--
Liberal-statism is an addiction to other peoples money.

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Canuck57 wrote:

The car sales pay for the ads, indirectly. Not the loans.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 05/04/2010 11:02 AM, dr_jeff wrote:

GM would not be having ads if it were not for our taxpayer funded debt.
--
Liberal-statism is an addiction to other peoples money.

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Canuck57 wrote:

I disagree. Without the ads, GM would hardly sell any cars.
Jeff
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Consumers go to the Web to get information on cars now, advertisement costs could be better spent making better vehicles.
-- Ron
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Ron Peterson wrote:

Except, without advertising, people won't know about the cars. Advertising is part of selling the cars. It's a cost of doing business.
Jeff
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote:

At the cost stated, it is about 1/25th of the cost of the average vehicle. A friend of mine works for a major cosmetics company and he says 40% of their revenue goes to advertising.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Canuck57 wrote:

Actually, it is added to the cost of the cars. From the graph to which I linked before, it is clear that paying $1000 per car for advertising has been going on for years.

The advertising includes all types of ads, including dealers' ads in the newspapers, TV and radio advertising, ads on TV and ads on the internet. Ads on the internet are, of course, growing, while TV, radio and newspaper ads are shrinking B-). I have a smiley there because I pretty much skip all ads when I read a newspaper or magazine. IMHO, it is a waste of paper. Actually, newspapers and magazines are wastes of paper, too, now that I can get them on the internet for free (and soon, I hope, on my iPad - and, no - the iPad isn't an internet feminine hygiene product).
Jeff
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Have you actually gotten an iPad? Till now I have avioded Apple products for my own use. But the SO has an iPod Touch which she really likes. My son has a regular iPod Classic which he likes. I keep hearing the hype about the iPad and think I might get one, but I am not sure if I'd really use it. If you have one, I'd love to hear your thoughts.
Ed
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
C. E. White wrote:

I had been planning on replacing my iPhone with the latest version when it comes out over the summer. Now, I am thinking about getting the iPad (just WiFi) and keeping the old version of the iPhone for another year (I have a year-old 3G 16 GB version).
I won't be able to get 3G data on the iPad, but I am in places where I can get WiFi enough (like my home and work), that that shouldn't be an issue.
I wish I knew what the 4G iPhone will do when it comes out. I suspect that only important thing I will be giving up is a better camera. I shall live without it, I think.
Jeff
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Don't have one, but I bet it'll be obsolete in a year.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
in2dadark wrote:

By obsolete, I mean no longer useful or being way too old. I have an iPhone 3G. It's been out for almost 2 years already. Although there is a new model out for about 9 months, it's not obselete. Nor is my iPod touch, which I think has been out for about 2 1/2 years. I doubt the iPad will be obselete in a year, even if there is a newer model. Just like my old Ford Contour is not obsolete, even if they haven't made them for about 10 years.
Certainly, I can update my iPhone 3G and get the 3GS, but I am fine with the 3G and the extra $500 in my pocket (that's would it would cost for an upgrade). I had planned on doing that when the iPhone 4G comes out in the late spring or early summer, but I may be better off keeping the iPhone and get the iPad or just getting nothing and using what I have.
Jeff
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Canuck57 wrote:

Really? By that argument, there are no good cars. Each car maker advertises. They all go to the big auto shows (LA, Detroit, NY, Geneva, etc.). They all spend money on TV. Many put big money into NASCAR and Indy racing (why, I don't know - Indy sucks). Some, like Hyundai, did so to get into the market. Others that are already in the market have to advertise to keep market share, including letting comsumers know about new models and their efforts to repair defects (like the sticky accelerator and mentally deficient drivers who either fake it getting stuck or press the gas when they want to stop.)
Likewise, there are many who believe that Apple, HP and Dell make good products. However, Apple still spends $0.5 billion just to advertise. The iPad has great reviews and lots of buzz on the internet, particularly the geek sites. Yet, Apple still chooses to advertise it.
All the car makers (and makers of most types of good products) advertise because people won't buy something if it isn't in their mind (and that means in front of them on the computer, TV, iPhone or iPad screen) or in front of them on the racetrack or newspaper, magazine or other print medium.
Jeff
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Related Threads

    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.