A Greater Share Of A Shrinking Pie?
One segment of the automotive market getting particularly hammered right now are large pickup trucks, manly beasts that don’t exactly sip fuel. GMC/Chevrolet, Ford, Dodge, Nissan, and Toyota field their own models and each manufacturer is seeing double-digit sales declines year-over-year.
Still, if you are a plumber, electrician, roofer, or other contractor you know that big pick up trucks are the lifeline of your business. Hauling crew and materials, only the biggest vehicles can get the work done.
For the 2009 model year, both Ford and Dodge are releasing the next generation of their respective F-Series and Ram models. Five years have gone by since their last updates and both companies are on schedule.
Unfortunately, gas prices are headed to over $4 per gallon on the eve of their releases.
Still, Chrysler is bullish on the new model expecting the company to grab a bigger piece of the segment pie. Trouble is, the pie has shrunk and the Ram’s year-over-year sales will continue to decline; the Ram series is Chrysler’s best selling model.
If Chrysler is able to hang on for a few years by maintaining or increasing market share for the Ram, the following scenario could improve the company’s long term picture:
- Nissan follows through with its agreement with Chrysler (made earlier this year) to use the Ram platform to build the next generation Titan truck.
- Toyota abandons the full-size truck market, deciding to concentrate on smaller trucks and everything else that it does best. The Tundra is a late-comer to the game, perhaps Toyota will see the light and quit.
- Ford and GMC/Chevrolet aren’t going anywhere with their trucks, but Dodge will be satisfied with a strong #3 position.
High gas prices are making predicting the future difficult, but with diesel models available, the Dodge Ram is still an important option for people who need big trucks.
(Source: The Wall Street Journal)
GM Likely To Garner $7K Tax Break For Volt
General Motors is hinting that the starting price for the Chevrolet Volt will be about $40,000 when the car is finally ready for customers in late 2010 or early 2011, but the company has a problem with that figure. Originally, GM expected the Volt to sell for about $30,000, but battery production costs have jacked up that figure by nearly ten grand.
The higher amount has GM worried as they believe customer demand will hinge on whether the car can come to the market at a price that is affordable. Thus, the company is asking that Congress consider a tax credit of as much as $7K per vehicle to aid their cause.
GM isn’t alone in working with policy makers to come up with some sort of credit for buyers who opt for a plug-in hybrid. Toyota, Nissan, and Ford are each heavily investing in this technology and would benefit if the next president makes this issue a cornerstone of his environmental policy.
Current buyers of select hybrid models are eligible for tax credits but that amount is subject to change depending on the number of hybrids an automaker sells. For instance, owners of the 2008 Ford Escape and Mercury Mariner SUVs, for example, receive a $2220 credit for the AWD vehicle or $3000 for their FWD ride, while Toyota/Lexus owners no longer receive any credit.
Taking advantage of the election year and the importance the two main candidates (bye, bye Hillary) have placed on environmental issues, GM’s request for a $7000 per vehicle tax credit will likely receive attention from Congress. Although President Bush might not go along with whatever legislation is eventually introduced on behalf of the Chevrolet Volt, the next president will be more inclined to aid buyers of the plug-in hybrid.
GM recently reached an important milestone with the Volt as the test mule vehicle on its Milford proving grounds consistently goes 40 miles between charges. A tiny three cylinder gas engine will work to recharge the battery, but unlike current hybrids, only the electric motor will power the wheels.
(Source: Edmunds.com)
Further Reading
Chevrolet Volt Hits the Road With Li-Ion Batteries And 40-Mile Range
Summary of the Credit for Qualified Hybrid Vehicles
Chevrolet Volt photo courtesy and copyright GM Corp.
Updating The Chrysler 300 Without Messing With Success
One of the secret fears an automaker has becomes evident when redesigning a successful product — the fear is that the buying public won’t be thrilled with its successor. An earlier generation model may have been a hit, but the next generation car is a bust. Hundreds of millions of dollars can be lost when a redesign flops, an experience that can bring devastation to the company’s bottom line.
Chrysler is facing what could be a problem with its popular 300 model, a near-luxury sedan that has sold well since its debut in 2004. Though most cars are redone every five or six years, Chrysler is looking to stretch the 300 re-do out to 2011 when the next generation 300 makes its debut, probably as a 2012 model.
So, what is the problem with redesigning the 300? Answer: Chrysler is afraid of losing its heritage good looks. The car’s style, created with lead designer Ralph Gilles at the helm, has been lauded by auto critics everywhere for its good looks, baby Bentley similarity, and macho road presence. Though the current model will probably be “long on the tooth” by 2011, its appeal remains strong.
Wards Auto is reporting that Chrysler is using its entire design team of 23 engineers to craft the next generation 300 and says that they are nearly done with the design. Borrowing an idea that has served Porsche well, the 300 update will include evolutionary, not revolutionary changes. Fans of cars like the Porsche 911 know what I mean — this iconic model has changed through the years, but its original good looks remain.
The most significant changes slated for the 300 will occur on the inside. Though the seating is comfortable, the fit, content, and materials are substandard. This complaint is to be remedied with the next generation 300, with Chrysler claiming that interior quality will match what the standards of the Asian automakers will be for 2012.
Let’s hope that the benchmark for Chrysler interior quality will be Toyota and Honda, not Chery, Tata, or Proton.
Photo courtesy and copyright of Chrysler LLC.
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