How Well/Badly are car manufacturers run?
Discussion
So they are royally boned by the sounds of it then.
Ford, GM, Jag/Landrover, etc
I heard on the news about vauxhall this morning, I'm assuming they are still part of GM, not sure how closely linked thier finances are though, likewise with Ford in Europe and the US.
I wouldnt know where to begin running a car manufacturer, but it strikes me as a little shoddy that after 6-12 months of poor sales the whole house of cards is set to collapse.
Are the likes of Fiat, Renault, BMW, Mercedes, VW/Porsche in the same boat? I havent heard anything on the news about the Mini Factory closing/3day weeks etc. (thats the only UK based factory of these companies I'm aware of)
Have these other companies been run "better" and had larger cash reserves to see them through pooey times? or are they just not in the UK press as much because there arent 1000's of jobs attached to them?
If it truely is a case of inept management should they be left to fail? If nobody is buying the product all a state funded "bail out" will do is prolong the inevitable (Rover?)
Or have I got it all wrong...?
Over to you guys!
Ford, GM, Jag/Landrover, etc
I heard on the news about vauxhall this morning, I'm assuming they are still part of GM, not sure how closely linked thier finances are though, likewise with Ford in Europe and the US.
I wouldnt know where to begin running a car manufacturer, but it strikes me as a little shoddy that after 6-12 months of poor sales the whole house of cards is set to collapse.
Are the likes of Fiat, Renault, BMW, Mercedes, VW/Porsche in the same boat? I havent heard anything on the news about the Mini Factory closing/3day weeks etc. (thats the only UK based factory of these companies I'm aware of)
Have these other companies been run "better" and had larger cash reserves to see them through pooey times? or are they just not in the UK press as much because there arent 1000's of jobs attached to them?
If it truely is a case of inept management should they be left to fail? If nobody is buying the product all a state funded "bail out" will do is prolong the inevitable (Rover?)
Or have I got it all wrong...?
Over to you guys!
Fundamentally, the car industry has geared up to provide expensive to buy and run vehicles which are purchased using credit.
Take the credit away, or the ability of large numbers to afford it, leaves the car industry with only one option and that is to reduce capacity.
How can it be sustainable to have dealerships like BMW or Mercedes having competing showrooms selling £50k cars only a few miles apart?
Take the credit away, or the ability of large numbers to afford it, leaves the car industry with only one option and that is to reduce capacity.
How can it be sustainable to have dealerships like BMW or Mercedes having competing showrooms selling £50k cars only a few miles apart?
toppstuff said:
Fundamentally, the car industry has geared up to provide expensive to buy and run vehicles which are purchased using credit.
Take the credit away, or the ability of large numbers to afford it, leaves the car industry with only one option and that is to reduce capacity.
How can it be sustainable to have dealerships like BMW or Mercedes having competing showrooms selling £50k cars only a few miles apart?
It's nothing to do with selling cars on Credit, although oviously not selling cars generates less profit.Take the credit away, or the ability of large numbers to afford it, leaves the car industry with only one option and that is to reduce capacity.
How can it be sustainable to have dealerships like BMW or Mercedes having competing showrooms selling £50k cars only a few miles apart?
More fundimentally, Ford and GM have both suffered from the same problem, bad investment of their profits years ago when healthcare and pensions were the way to go - Then things changed, and these were no longer the way to go.
This lead to big losses in their investments, and eventually both companires were finacially delisted twice. Now both companies are listed as junk status in the USA, meaning it's more expensive to borrow money.
Both companies are both still paying dearly for the bad investments of the 90's, and the slow down in sales has just made things worse.
With regard to dealers competing on each others door steps is not really an issue for the manufacturer's. Most dealers are independent from the manufacturer, and as long as they meet the mmanufacturer's operating standards, can pretty open up where they like.
You say build what the customer wants?
That's exactly what they did. Big SUV monsters. With oil down to record lows, I think americas thirst will return. They'll buy their prius and get bored quickly, the car just isnt suited for anyone outside of the cities and even then a big 4x4 is the american dream.
They'll be fine when SUV are vogue again in a few years,
That's exactly what they did. Big SUV monsters. With oil down to record lows, I think americas thirst will return. They'll buy their prius and get bored quickly, the car just isnt suited for anyone outside of the cities and even then a big 4x4 is the american dream.
They'll be fine when SUV are vogue again in a few years,
I think the answer is a lot more simpel then that: at the moment, it doesnt matter what they are building. If people arent buying it, they will make a loss. This is the sme whether its cars or cream cakes.
Perhaps the only difference is that you cannot panic and launch a new car quickly. They take years to develop, and months to prepare for production. If you look at the US car industry, when their current line-up was planned, their target customers wanted big, powerful, thirsty pick-ups. They made a lot of money sellign these. But even if they had made prious versions, they would still be in a simmiler state
Perhaps the only difference is that you cannot panic and launch a new car quickly. They take years to develop, and months to prepare for production. If you look at the US car industry, when their current line-up was planned, their target customers wanted big, powerful, thirsty pick-ups. They made a lot of money sellign these. But even if they had made prious versions, they would still be in a simmiler state
what about the car makers that are NOT in the press at the moment?
Are BMW/Merc/VAG/FIAT/Peugeot/Renault/etc struggling? are we not hearing about it because we dont host factories for them?
What about the Jap Giants? They seem to be having a rough time of it, Toyota reports its first loss in 30 years, but is it asking for a governement handout or have they got enough cash to see them through a rough spot? Honda pulls out of F1 to save a few yen, not sign of imminent collapse though.
Better run companies?
Are BMW/Merc/VAG/FIAT/Peugeot/Renault/etc struggling? are we not hearing about it because we dont host factories for them?
What about the Jap Giants? They seem to be having a rough time of it, Toyota reports its first loss in 30 years, but is it asking for a governement handout or have they got enough cash to see them through a rough spot? Honda pulls out of F1 to save a few yen, not sign of imminent collapse though.
Better run companies?
davido140 said:
what about the car makers that are NOT in the press at the moment?
Are BMW/Merc/VAG/FIAT/Peugeot/Renault/etc struggling? are we not hearing about it because we dont host factories for them?
What about the Jap Giants? They seem to be having a rough time of it, Toyota reports its first loss in 30 years, but is it asking for a governement handout or have they got enough cash to see them through a rough spot? Honda pulls out of F1 to save a few yen, not sign of imminent collapse though.
Better run companies?
Possibly. Possibly they have more cash reserves. Possibly already state owned (Renault) Possible media bias (JLR is just part of the consortium asking for options, they are not "begging the government for cash" but thats not what the media are saying)Are BMW/Merc/VAG/FIAT/Peugeot/Renault/etc struggling? are we not hearing about it because we dont host factories for them?
What about the Jap Giants? They seem to be having a rough time of it, Toyota reports its first loss in 30 years, but is it asking for a governement handout or have they got enough cash to see them through a rough spot? Honda pulls out of F1 to save a few yen, not sign of imminent collapse though.
Better run companies?
In the US Ford and GM have for the last decade been pension funds and health care companies selling cars as a sideline. GM made more money in the 90's from GMAC ( The Credit Business) than it made from making, selling and servicing cars.
Last month in the US car workers were getting worried that earning US $ 62 and hour was just not on. Funny how Honda and Toyota pay their workers less and have fewer sick days, no pension exposure and better union management relationships.
The Japanese are suffering due to the rise of the yen vs the US $.
Here in Europe as pointed out above we have too many manufacturrs making too many cars. 20 years ago BMW and M-B made 3 or four models with a couple of variations re engine and bodywork. Today they make every car in every combination.
Porsche have a boss who is a currency trading expert. They make more money from options, futures and swaps / bonds than selling cars, thus their ability to buy a major share in VW.
A-M and Bentley....chasing too many sales and going too mass market.
Most of these companies were set up by engineers and visionaries who wanted to build cars, race cars and not chase massive global sales. Today these vast organisations are run by ooverpaid executives who have no real engineering or sales experience and look at numbers from accountants more than actually asking buyers what they want, need and are willing to pay for.
Finally cars today are more reliable than ever, need fewer repairs, the electronics have made them over expensive and the market is flooded with choice. We need fewer mass manufacturers, greater product design, more shared components and fewer subsidised dealers....
Last month in the US car workers were getting worried that earning US $ 62 and hour was just not on. Funny how Honda and Toyota pay their workers less and have fewer sick days, no pension exposure and better union management relationships.
The Japanese are suffering due to the rise of the yen vs the US $.
Here in Europe as pointed out above we have too many manufacturrs making too many cars. 20 years ago BMW and M-B made 3 or four models with a couple of variations re engine and bodywork. Today they make every car in every combination.
Porsche have a boss who is a currency trading expert. They make more money from options, futures and swaps / bonds than selling cars, thus their ability to buy a major share in VW.
A-M and Bentley....chasing too many sales and going too mass market.
Most of these companies were set up by engineers and visionaries who wanted to build cars, race cars and not chase massive global sales. Today these vast organisations are run by ooverpaid executives who have no real engineering or sales experience and look at numbers from accountants more than actually asking buyers what they want, need and are willing to pay for.
Finally cars today are more reliable than ever, need fewer repairs, the electronics have made them over expensive and the market is flooded with choice. We need fewer mass manufacturers, greater product design, more shared components and fewer subsidised dealers....
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