Kiss of death for GM and perhaps Ford

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I have a copy of the May 2006 issue of Car and Driver (magazine). The magazine has an excellent article beginning on page 58 related 6 foreign made cars that cost about $15,000 per car. They are really small cars (aka
economobiles). These are the companies that make the economobiles: Honda Fit Sport Hyundai Accent GLS Kia Rio5 SX Nissan Versa 1.8L Suzuki Reno Toyota Yaris S
The car that came in first place in the comparison test was the Honda Fit Sport. It actully "sailed through the lane change test 6 mph faster than a Corvette Z06." The Honda Fit is now sold in 70 countries and is known in Europe as the Jazz.
One of the reasons that Americans buy GM cars and Ford cars is because of their low prices compared to cars made by Honda and Toyota. Now that Honda and Toyota will be selling the Honda Fit and the Toyota Yaris at a cost of about $15,000 per car, it means those people that plan to buy a low priced new car in 2006 or 2007 will probably be buying a Honda Fit or Toyota Yaris instead of a low priced Ford or Chevy. Do you agree? Do you agree that this could be the final nail in the coffin for GM and perhaps Ford? Jason
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I think Car and Driver wants to sell magazines.
I don't know the shape of things to come in the consumer automotive market, but I doubt anything will cause a huge shift of buyers from any major brand to another. It seems to me most people have already made up their minds which brands of car they would buy and which they will not.
I do recall that in the mid-70's one of the magazines (Road and Track, IIRC) track tested various cars and the Ford Pinto beat the Porsche 911's time through the slalom! Outraged readers wanted to know how the obvious error got through, so the editors explained: understeering cars have an edge over oversteering cars in the slalom, allowing the Pinto (shudder!) to beat the Porsche. I just don't think that is why more Pintos were sold than were 911s each year.
Mike
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Michael Pardee wrote:

A major factor is brand loyalty regardless of that particular brand's performance over the years. There are simply folks that will NEVER buy a foreign car and then those on the other side of the fence that will never buy domestic tin.
As far as "nails in the coffin" for any domestic manufacturer, one must consider the costs (high labor), government mandates (far too intrusive) and the public's response to sales campaigns.
I for one am not caught up in the "gotta get a new car" syndrome. One of my daily drivers is over fifty years old while the other is almost twenty-five years of age and that is way modern 'nuff for this ol' fossil...
JT
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MIke, You must be much younger than me. I remember the 1970's when there were lines of cars at every gasoline station. They even had to ration gasoline. It was the main reason the Jimmy Carter lost the election for a second term. The best selling cars (in the !970's) became the really small cars such as the Honda Civic and the Volkswagen Bug. If the cost of gasoline rises to $4.00 per gallon, it will cause a shift to cars such as the Honda Fit and the Toyota Yaris. I doubt that GM and Ford will sell very many monster sized SUVs and Pickups if the gasoline rises to $4.00 per gallon. Jason
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Jason wrote:

I can come up with several reasons Carter lost the election, all of which are based on his total incompetence.
1. Foreign Policy blunder #1: Returning the Panama Canal to Panama
2. Foreign Policy blunder #2: Inability to deal with the Iranian hostage crisis
3. Foreign Policy blunder #3: Failure to deal with the Lebanese civil war
4. Gutting the military (as evidence by the failure of the Iranian hostage rescue attempt)
5. Presiding over double digit inflation
6. The pardoning of Vietnam War deserters
Worse, his incompetence carried forth in later years such as being the main architect of the North Korean nuclear issue (along with Richardson of New Mexico).
Jimmy Carter, the Millard Fillmore of the 20th century...
JT
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On Sun, 09 Apr 2006 13:53:33 -0700, snipped-for-privacy@nospam.com (Jason) wrote:

Actually it was 6 mph faster than the next fastest car in the comparison and faster than the Corvette but we don't know by how much. Still a very impressive showing.
As for being the kiss of death for GM and Ford, Gm and Ford never made any money off economy cars anyway. The kiss of death for GM and Ford is $3 gas which is killing their monster SUV sales.
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You are correct. I just re-read the sentence that you mentioned and it's clear that I left out some of the words from that sentence in my post--sorry. You made a great point related to gas prices in regard to monster SUV sales. It's my guess that GM and Ford will have a hard time selling the monster sized pickup trucks if the gas prices keep going higher. Jason
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Perhaps more telling was the Consumer Reports 2006 cars edition where CRs data indicates that an 8 yr old Toyota/Honda has the same number of problems as does a 3 year old Ford or GM product -- and a 2 yr old VW.

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The only thing that can help GM is a 6 year bumper to bumper warranty. That would get them a lot of sales. And probably bankrupt them paying for repairs.
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Art wrote:

I have been saying the GM should put up or shut up about it's much bragged about "quality improvements" with a much better warranty for a long time now. Reasonable people see the logic, Mike Hunter does not :).
John
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Art wrote:

You bet! I really chuckled over that one...
JT
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I don't see much of a market for the Honda Fit. Most people would buy the civic instead which offers so much more for less money. Same thing with the Suzuki Reno vs the Suzuki Forenza. The Forenza is the better choice.
America isn't built like prehistoric Europe where there is barely enough room for foot traffic. People will buy the larger car for the same price or for a slightly higher price than the smaller version.
It would appear that for every Toyota Echo that was sold there were 10 more Corollas that were sold. Can you see the pattern? Air-
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snipped-for-privacy@yahoo.com wrote:

Sorry, but the Fit costs less than a comparably equipped Civic. I don't know about the U.S., but there is definitely a market for the Fit here in Canada, where gas costs much more than in the U.S. even after you do the necessary conversions (metric to U.S., currency). The Toyota Echo actually sold quite well here, and the Yaris looks like it will be equally successful. So I have no doubt that the Fit will also do well here.
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If the cost of gasoline rises to $4.00 per gallon, it's my guess that the Honda Fit Sport, Toyota Yaris S and Suzuki Reno will be very successful. That's the main reason those types of cars are so popular in Europe--since gas prices are much higher in Europe than in America.
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OK so the Fit is a little less. You still missed the point. Americans in general do not gravitate towards mini-compact cars. The situation is different in Canada. Yet In Canada people still buy big SUVs. Ever watched the TV show "Help you sell" based in Quebec Canada? They are driving an Explorer or a Jeep Grand Cherokee.
Air-
High Tech Misfit wrote:

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snipped-for-privacy@yahoo.com wrote:

No, I didn't miss the point. I was only pointing out that there is a market for those small cars in other places around the world.

Yes, people are still buying big SUV's here, but not in the large numbers of, say, 10 years ago.
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snipped-for-privacy@yahoo.com wrote:

Hello, If the cost of gasoline rises to $4.00 per gallon, the Honda Fit Sport, Toyota Yaris S. and the Suzuki Reno will become the best selling vehicles in America. Of course, lots of people that can afford it will continue to buy full sized pickups and SUVs. There are lots of people in America that can't afford to spend $50.00 or more per week for gasoline. I know several people that drive over 50 miles per day to and from work. Jason
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If Gas rises to $4 a gallon the best selling cars in america would be the Prius and the Civic Hybrid. Including the cars that run off of compressed natural gas. Motorcycles would start picking up in sales in a way that the states would have never seen before.
Sure the Fit and Nissan version would be top sellers too but the Prius would be one of the most desirable. Honda Insights would start selling for a lot of money used.
O3-
Jason wrote:

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snipped-for-privacy@yahoo.com wrote:

Air- You are probably correct. Only time will tell. The smallest cars and hybrids made by all of the car companies will become their best selling cars if the cost of gasoline rises to $4.00 per gallon. I would keep my Accord since I rarely drive it long distances. jason
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<<<<Air- You are probably correct. Only time will tell. The smallest cars and hybrids made by all of the car companies will become their best selling cars if the cost of gasoline rises to $4.00 per gallon. I would keep my Accord since I rarely drive it long distances. jason >>>>
And don't forget the Turbo Diesels offered by Volkwagen.
50mpg Highway is not bad at all for a diesel VW Jetta or Golf. The new Jeep Liberty Diesel is selling so fast that none of the dealerships can keep one on the show floor.
I wouldn't be surprised if the 5 states that banned the new turbo diesels would lift the emmisions requirments in order to make the diesel alternative available to the public in California, New York, Massachusets, Vermont, and Maine.
The advantage to the diesels is that they get better MPG on the Highway while the gas/electric hybrids get their best MPG in the stop and go. Now market a car that is a diesel/electric hybrid and now your talking! It's been on the drawing boards for years, just never actually done.
Or who knows, like you said only time will tell. I've got a feeling those nuclear batteries are going to save us.
O3-
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