Sunday, June 22, 2008

Understanding U.S. Automakers

Why does it seem U.S. Automakers are always late in responding to changing market conditions? It happened in the 70's when American consumers bought the smaller and more economical Japanese vehicles.

BAD TIMING

I read an article recently where U.S. Automakers are ONLY NOW shutting down Truck and/or SUV manufacturing plants to convert them to build smaller cars. This process will take up to 18 months!

The reason? Sales of larger vehicles are WAY, WAY DOWN. The sales of smaller vehicles are WAY WAY UP. What a surprise, huh?

GOOD TIMING

One year ago, I considered the ramifications of owning a lower-mileage pickup in the event gas prices increased, and I sold it. I bought a small/midsize economy car that gets pretty good gas mileage. Granted, not even I envisioned $4.00 gas. But c'mon Detroit, where is your "pulse" on the market?

If a normal consumer like me could envision the possibility of gas prices going up ONE YEAR AGO - where is Detroit's head.

Is it any wonder we have lost so many valuable manufacturing jobs to overseas.

I once heard a phrase: Paralysis by Analysis. It might fit Detroit. They may spend so much time analyzing things like profit margins they simply miss the market signals. Then again, there may so much more profit in the large trucks and SUV vehicles that they just put off the inevitable. Too bad, because they are late to the party once again.

Even though gas prices are high, you do not have to pay high CAR INSURANCE rates.

In Arizona, to get a quote, click here: Arizona Auto Insurance


1 comment:

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