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Posts Tagged ‘Bill Sluben’

Toyota: When a lack of a response is a response

Posted by Bill Sluben on February 6, 2010

Toyota’s struggles the past two weeks with real and (now perceived) quality problems have shook up the once impeccable quality record of the Japanese giant. Consider that it had been Toyota that has been the benchmark for quality in the industry the past 20-25 years. Consider that it is Toyota that has had a leadership position on the field of public perception, whether rightfully deserved or not. And consider that it is Toyota that has no clue or experience in managing a public relations bomb.

Toyota, and the Japanese, are notorious for just-in-time manufacturing and consensus management. It is the latter that is their Achilles heel with the current crisis. For it is highly unusual for a Toyota rank and file to speak up. That approach ahs established uniformity and efficiency with their manufacturing.

When the crisis first began to percolate two weeks ago, Toyota’s response was to ignore it. In hopes of it going away? In hopes that the claims were false? In hopes that a small margin of complaints was not enough to warrant a response? Who knows? When the crisis escalated, the leadership of Toyota was AWOL for nearly two weeks. The response was tepid (at best) from Toyota – “if there is a sudden acceleration, just apply firm pressure to the brake and shift the car into

neutral” OMG. Are you kidding me?

Now, Toyota is in a full blown crisis. This isn’ only about the electronic sensor to the accelerator. Now it has spread into quality defects/issues with the Prius brakes. And to their credit, Toyota has issued a moratorium on future sales and has rushed out parts to remedy the accelerator situation. The message that is rolling out of corporate is to hang in there, we’ll get you fixed up, we’re still Toyota – the best in quality. But where’s the response to how they will ensure that this will never happen again? Where is the response that restores the immense equity in the perceived quality of Toyota? That’s TBD…

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8 years ago we went for a little roadtrip across America

Posted by Bill Sluben on December 4, 2009

46 states, 16,000 miles and 2 car crashes later we delivered the Olympic flame from Atlanta to Salt Lake City.

Remarkable at the time was the focus that Chevrolet had on trucks.  The”halo” vehicles were the new Avalanche, the Tahoe Z-71, the TrailBlazer, the Suburban and the Silverado.  The vehicles were selected for obvious utility reasons but it goes deeper than that. 

We were mid stream in the consumer obsession with SUV’s and trucks.  It seemed the only attractive car that Chevy made at the time was the Z-06 Corvette (which this writer managed to propel over 120 mph on a somewhat snowy highway outside of Rochester NY!).  The other cars were the Impala and Monte Carlo.  Yes the Impala was redesigned but noone really stood back and took notice of the cars…it was all about the trucks.

What a remarkable ride.  Post 9-11 America, patriotism bursting out all over, the Olympic brand strong and no real disruptive protesting.  Truly a great fit for the Chevy brand – hit the magical combination of the Olympic Games here in the U.S. coupled with an intense (but alas…brief) period of unification and patriotism in the U.S.

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100 Muscle Cars Rolling…

Posted by Bill Sluben on December 1, 2009

If you happened to be in Atlanta (and on I-85 specifically) on Saturday you probably saw a vehicle caravan unlike no other:  100 Camaros heading down to Centennial Park.  This was the mother of all vehicle convoys…rivalling what the Prez would command coming to town.  And the kicker was that 50 were red for the Georgia Bulldogs…and 50 yellow for the hometown Georgia Tech Yellow Jackets.  Needless to say, the vehicles made quite an appearance at Centennial Park when the nearly 2 mile long caravan snaked off of the highway and onto the city surface streets.  At 304 horsepower each, you’re talking nearly 31,000 HP…now that’s some serious muscle!

Nearly 200 Chevrolet dealers from all over the state of Georgia traveled some 75 miles.  Their reward for the haul?  A trip in a luxury coach to the Georgia/Georgia Tech football game…this trek only a mile.

LiveLink Events had the unique opportunity to serve as the lead event management agency with this assignment.  Truly unforgettable experience!

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Future auto sales in the U.S.?

Posted by Bill Sluben on October 5, 2009

2010 and beyond:  what will it look like?

This from Aftermarket Business:  U.S. auto sales, on track to hit the lowest levels in decades, will begin to recover in 2010, according to Global Insight data. But it will likely be 2014 or 2015 until annual sales reach the 17 million vehicles a year seen early this decade.

In 2015, Detroit auto makers will sell around 6.5 million vehicles, just over half what they sold in 2000, Global Insight predicts.

On the production side, U.S.-based auto makers are expected to build about half the vehicles in the U.S., down from nearly 70% in 2000. Production, meantime, will grow at Toyota, Honda Motor Co. (HMC), Nissan Motor Co. (NSANY) and Hyundai Corp.

R.L. Polk & Company says  U.S. light-vehicle sales are beginning to show signs of improvement, according to an automobile market research firm that forecasts sales will jump 9.6% in 2010 to 11.2 million units.

In raising its 2010 forecast by 400,000 units, said the bottoming out of the housing market, expansion in manufacturing and improved consumer sentiment were signs the economic recovery was underway.

IHS Global Insights offers this:  forecast for U.S. light vehicle sales to 10.3 million units for all of 2009 (slightly better than the 9.5 to 10 million that I predicted earlier this year).  This is up from the company’s pre-C for C forecast of 9.7 million.

For all of 2010 Global Insight estimates that U.S. light vehicle sales will come in at 11.2 million and 13.8 million in 2011.  Both are a far cry from the heyday when we saw 16 to 17 million here in the States, but the market for autos is improving. 

J.D. Power & Associates maintained its 2010 target of 11.5 million units for total sales and 9.5 million units for retail sales.

So the consensus for 2010 seems to be right at 11.2 million units sold.

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Buying a new car in 2010? Or will it be slightly used?

Posted by Bill Sluben on September 15, 2009

Ahhhh…that new car smell.  Pretty intoxicating.  However, less of us seem to be getting drunk on it these days.

Seems to be a paradigm shift these days in how consumers perceive their “needs” and “wants” when it comes down to replacing the clunker.  The old (read: pre 2008) mentality was to replace a vehicle every 3-4 years…if not sooner.  And why not?  Credit was easy, unemployment was low, housing values were endlessly appreciating and consumer sentiment was high. 

Fast forward a year and a half and a different outlook and mentality has grown deep roots.  Gone are the days of excess and frivality…ushered in are more pragmatism and caution.  What does this bode for the auto market in 2010?  For starters, longer ownership of the vehicles that people already have.  And when it does come time to replace a vehicle, a look at slightly used vehicles can make a big difference in the hit to the savings account.

Considering most people keep their cars longer than one year, our best and worst residual value lists rank cars by their three-year depreciation values, with data provided by Automotive Lease Guide. Cars with the highest residual value hold 60-70 percent after three years. The worst hold 20-30 percent.  20 to 30 %!!!  That could translate into a $10,000 resale value after one year on a truck or SUV that cost it’s owner $50,000 to purchase.

To be fair, there are lots of great deals on new vehicles to be had…and the advantage to owning a new vehicle generally means more of your service repairs covered under warranty.  But the significant cost savings of purchasing a slightly used vehicle is hard to pass up in this economy.

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General Motors offering 60 day trial – smart, very smart

Posted by Bill Sluben on September 11, 2009

60 days to drive around a new GM.  If you don’t like it…just return it.  Smart campaign from GM.  They needed (need) to get consumers in a different mindset when it comes to their knee jerk perception and consideration for the GM brands.

By knee jerk, I posit that many consumers who reject GM do so on anecdotal evidence that “GM is poorly built…or lacks design…or are a bunch of gas guzzlers, etc…”

This is a true opportunity for GM to hit the restart button with consumers.  New company (albeit one that passed through a re-org), new culture, new leadership at the top, new product strategy…and new product.  Get out and personally introduce consumers to the new GM, whether it be through a 60 day “extended test drive”, or through highly effective measures like street team marketing, where consumers can discover GM on their own terms at work, home or play…and not only at the retailer.

What a story GM has to tell now.  This is a golden opportunity to break the cycle that seems to be handed down from the previous generation:  that GM is not worthy of my choice for a new vehicle.

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China is driving growth for GM now/future

Posted by Bill Sluben on September 3, 2009

Going Nowhere Fast in China
Going Nowhere Fast in China

40% growth rate in China this year!  GM is taking that to the bank.  To date, over 1.1 million GM vehicles have been sold in China.   And according to China Daily, the party might just be getting started for all automotive manufacturers.  Consider that car ownership is just 2.9 percent of the population – one of the lowest rates in the world – says Credit Suisse, which expects ownership to surge fivefold in the next decadeto reach 148 cars per 1,000 residents by 2020.  Credit Suisse estimates that 40 percent of urban households in China can afford a medium-priced car if auto financing is available, and 90 percent of rural households can afford the cheapest cars on the market.  Mind boggling potential when one considers that the population is over 1 billion people.

As it is already, the Chinese market is expected to top out at 11.8 million sales, the highest in the world and some 1 million more than the U.S. market.  However, the profit margins are generally slim as the majority of new vehicles are small and inexpensive.  It may be a volume game for manufacturers for a long while until Chinese personal incomes advance from the $5000 – $65000/annual right now (and that is in the urban areas).

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Recession has been good for one thing: decreased traffic

Posted by Bill Sluben on September 1, 2009

Not a car in sight...

Not a car in sight...

Have you noticed that the traffic jams seem a little easier to bear, that the number of vehicles on the road seems a little lighter these days and that there is a little more room to make that 4-lane swerve to get off the exit you just passed (no one does that right?).

It’s not your imagination.  In a report by INRIX, a leading provider of traffic and navigation services in the United States, gridlock in the U.S. reached it’s low point in the second quarter of 2009…but has begun to rise due to the (slight) economic recovery.  “Traffic congestion across the country is rising due to signs of economic recovery, initial rollouts of highway construction projects funded by federal stimulus packages, and lower fuel prices. In fact, 64 of the top 100 most populated cities in the U.S. experienced increases in traffic congestion levels in early 2009.”

Kinda liked having the top end perimeter here in Atlanta all to myself the past 8 months…

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Automotive Internet Research Soars

Posted by Bill Sluben on August 28, 2009

In an article in yesterday’s Wall Street Journal, Kevin Helliker outlines the success of start up internet sites that allow consumers to research and shop for cars.  In fact, nearly 100 of these sites have been launched in the past year even as car sales in the U.S. have plummeted by over 30%.  That brings the total number of automotive sites to over 5,000.

The Internet and it’s ease of researching vehicles and influencing purchase decisions has skyrocketed as of late.  And no niche has been overlooked.  Consider gaywheels.com, a site for LGBT enthusiasts established by industry vet Joe LaMuraglia.  Gaywheels.com ranks vehicle preferences and purchases among gays.  “Gay men are four times more likely to own a Volkswagen that the average customer,” says Mr. LaMuraglia.

Demand for these sites are increasing according to a recent survey by J.D. Powers completed in 2008 that found that 75% of car buyers conducted research on-line before completing a vehicle purchase.   The emergence of the wired and educated consumer has led to multiple iPhone apps where consumers are armed with the latest product and pricing information as they are negotiating a deal in the showroom.  The paradigm of car buying has certainly shifted!

Consumers will always have a need and desire to touch and experience a vehicle prior to making the purchase decision, whether that be at the dealership or at an event. Now however they have evened the playing field with the salesforce, no longer fearing that they are not getting a good deal.

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Say…how “American” is that American car of yours?

Posted by Bill Sluben on August 25, 2009

We’ve heard this argument before:  Japanese and Korean vehicles produced here in the U.S. are made with American parts and assembled with American labor.  The use of American workers may be closer to the truth then the inclusion of U.S. made parts.  The Japanese and Korean plated vehicles produced here have as much as 25% of their parts made here in the U.S. Contrast that with European brands where the percentage is closer to 10% (see below)

Case in point:  In an article written by Kelsey Mays of Cars.com the origin of country of parts content is examined for the largest automobile manufacturers.    The results might surprise you.  Mr. Mays writes that:

Made in the U.S.A?

Made in the U.S.A?

Of the 35 most popular U.S.-built 2008 and 2009 models, 43 percent of GM, Ford and Chrysler contenders had domestic content ratings of 75 percent or higher. In comparison, just 25 percent of the Nissan, Honda, Hyundai and Toyota models on the list achieved that.That doesn’t mean dealerships are teeming with cars that have 95 percent domestic content stickers. Those days are behind us; Toyota reports that in 2007, the industry as a whole saw domestic content ratings decline, and it looks like the trend is continuing through 2008 and into 2009. Of the most popular cars eligible for last January’s American-Made Index, we saw an average drop of 3.3 percentage points in domestic content between 2007 and 2008. Looking at a few early ’09 arrivals, like the redesigned Honda Pilot and the Toyota Corolla, it’s more of the same. Here’s how a handful of top U.S.-built models fared in the transition to ’08 or ’09.

 

  • Ford F-150: 80% domestic content, down from 90% for ’07
  • Chevrolet Silverado 1500: 85% for ’08, down from 90% for ’07
  • Toyota Camry/Solara: 68% for ’08, down from 78% for ’07
  • Honda Accord: 60% for ’08, down from 65% for ’07
  • Toyota Corolla: 50% for ’09, down from 65% for ’08
  • Toyota Matrix: 65% for ’09, down from 75% for ’08
  • Dodge Ram: 68% for ’08, down from 72% for ’07
  • Honda Pilot: 70% for ’09, same as ’08
  • Honda Civic: 70% for ’08, up from 55% for ’07

 And this from Mr. Mays again:

 

Weighted for sales, here’s how the big players measure up in domestic-parts content:
GM: 69%
Ford Motor Co.: 64%
Chrysler Corp.: 60%
Honda/Acura: 58%
Toyota/Lexus/Scion: 44%
Nissan/Infiniti: 31%
Mitsubishi: 25%
Subaru: 20%
Mercedes-Benz: 16%
Suzuki: 12%
Mazda: 11%
Volkswagen/Audi: 9%
BMW/Mini: 5%
Jaguar/Land Rover: 3%
Porsche: 3%
 

 

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