U.S. Automobile Companies Face Tattered Image Issue

I have enjoyed watching NFL Football, again, on Sunday night and this season a major sponsor of the broadcasts is Chevrolet Trucks. It is no secret that GM, Ford and Chrysler have been having financial problems the past year and trucks and SUV’s are the biggest profits margin vehicles the big three sell in the United States. Six months ago no one thought there was much of a future for trucks and SUV’s because of raising gasoline prices. However, with gas prices now around $2 per gallon the big three once again have hopes that consumers will flock to dealer showrooms and start buying these cash cow vehicles, again.

Once again the domestic big three automakers are making a mistake and trying to earn money on a short term basis rather than taking a long range view of their business like the Japanese, do. I must admit the new Chevy Truck design is nice to look at, but every time I see a large truck or SUV these days, all I can think about are the high gas prices which we all struggled with less than six months ago. Hopefully, the big three US automakers will design a car which folks want to buy because it has equal or superior quality to Honda and Toyota, but I have my doubts as to whether they will put in the R&D, money and patience to develop a car Americans want to buy without huge rebates and other incentives.

US automakers have taken short cuts to monthly sales for so long there isn’t much trust left in their products with most Americans who buy cars. To me, US vehicles must be overpriced to begin with if the manufacture is offering rebates in excess of five thousand dollars just to move inventory from time to time. Either the big three are making huge sums of money on each vehicles or they are offer these rebates and losing money just to get inventory off their dealers, lots.

In the old days before competition from the Japanese, the domestic big three automakers quality was terrible. Most cars and trucks would never last past 50 thousand miles, which caused some folks to say that they built their vehicles with “planned obsolescence” so people would trade vehicles every few years. Maybe that made sense when the average price of their cars and trucks was under five thousand dollars. However, today the average price of a domestic vehicle has a sticker price that is five times higher than it was in the late 1970’s.

New ideas are needed in Detroit, but so far all I am seeing is more of the same and that same bad planning is what put the big three into the bad financial position they find themselves in today. I guess change is hard not only for people, but for large companies, as well.

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Tattered Image Issue