{"id":369459,"date":"2011-07-28T08:00:14","date_gmt":"2011-07-28T12:00:14","guid":{"rendered":"https:\/\/sportscardigest.com\/?p=36058"},"modified":"2024-01-16T07:20:26","modified_gmt":"2024-01-16T07:20:26","slug":"puzzles-facing-the-car-industry","status":"publish","type":"post","link":"https:\/\/www.supercars.net\/blog\/puzzles-facing-the-car-industry\/","title":{"rendered":"Puzzles Facing the Car Industry"},"content":{"rendered":"

The Puzzles Facing the Car Industry – Oil Prices and Consumer Biases<\/h2>\n

By Martin Swig
\n\"\"<\/a><\/p>\n

Car selling requires a long-term strategy. Consider Hyundai. In their first ten years in the U.S. they wandered all over the map. They then \u201cidled\u201d for about five years. Finally they found a sound strategy and produced a succession of very good cars. At long last they are recognized as a major producer of very desirable cars. Reputation: UP. Resale value: UP. Dealers: TOP NOTCH. Sales: SKYROCKETING. A track record like that requires a good strategy, good execution and good forecasting.<\/p>\n

Today, we have governments demanding electric cars, consumers being primed to want them to reduce our dependence on oil. So far electrics have less than 1% of the market. But what if oil is actually plentiful, as some experts are beginning to believe.<\/p>\n

Citing huge reserves in Alberta and North Dakota, and recent discoveries in Brazil that may exceed the reserves in Saudi Arabia, these sources suggest that oil prices could decline precipitously. If that happened, demand for electrics and hybrids would likely collapse, wiping out the considerable investment in them.<\/p>\n

Remember the Chevy Vega, Plymouth Horizon and Dodge Omni?<\/p><\/blockquote>\n

We\u2019ve been there before. In the early \u201870s our not-so-wise legislators created CAF\u00c9 (Corporate Average Fuel Economy). These regulations required that the average fuel consumption of all the producers\u2019 cars achieve a certain average. There is a separate average for trucks. A company like GM couldn\u2019t average its imported product with its domestically produced cars \u2013 a sop to the Auto Workers Union. The result was that U.S. companies were forced to build money losing small cars. Remember the Chevy Vega, Plymouth Horizon and Dodge Omni?
\nSince government couldn\u2019t force consumers to buy them, it took big discounts to sell them. This was eventually a factor in the bankruptcies of GM and Chrysler. Will something similar happen again?<\/p>\n

The Hard to Read Consumer
\n\"\"<\/a><\/h2>\n

In 1962, my sister asked me what car her family of four should l buy. I suggested a Chevy Corvair wagon. She never asked my advice again until now. After an ownership history of Range Rover, Infiniti FX and Mercedes-Benz ML, I suggested her next car be an Audi Q5. She likes it, but isn\u2019t quite convinced.<\/p>\n

I told her to shop a Cadillac SRX, Ford Edge or Flex, maybe a Chrysler 300 for variety, or possibly another Mercedes-Benz or Infiniti. Her response: Japanese or German, but no American car. I pointed out that the American quality is way up, fully competitive with the competition. She was happy to know that, but Cadillac and Chrysler were OUT because she didn\u2019t want to reward a company that accepted a bailout and bankruptcies that so obviously discriminated in favor of the UAW.
\nFord will get a grudging look. She will reconsider the Infiniti and Mercedes. My guess: The Audi will win out, based on style, economy and well-earned reputation.<\/p>\n

Interesting minefield for corporate planners in a marketplace feasting on very good cars from every manufacturer.
\n[Source: Martin Swig; photo credit: Audi AG; Flickr<\/a>]<\/p>\n","protected":false},"excerpt":{"rendered":"

The Puzzles Facing the Car Industry – Oil Prices and Consumer Biases By Martin Swig Car selling requires a long-term strategy. Consider Hyundai. In their first ten years in the U.S. they wandered all over the map. They then \u201cidled\u201d for about five years. Finally they found a sound strategy and produced a succession of very good cars. At long last they are recognized as a major producer of very desirable cars. Reputation: UP. Resale value: UP. Dealers: TOP NOTCH. […]<\/p>\n","protected":false},"author":122,"featured_media":794091,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[263,7143],"tags":[17152,17154],"class_list":["post-369459","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-car-culture","category-misc","tag-car-culture","tag-misc"],"yoast_head":"\nThe Puzzles Facing the Car Industry - Oil Prices and Consumer Biases<\/title>\n<meta name=\"description\" content=\"Martin Swig on the puzzles facing the car industry, including rising or falling oil prices and consumer bias.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.supercars.net\/blog\/puzzles-facing-the-car-industry\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Puzzles Facing the Car Industry - 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