A strong Letter from a Ford Dealer Principle in America

[welshbikerduck]

5 USA said:

GreigM said:

To me this letter alone is good proof why the US auto industry SHOULD be left to flounder and die - such a US-centric view is the poison that is killing the industry - absolutely no vision which includes the global perspective that the japanese,german and other industries take.

Can't help wondering whether you actually read all of the letter.

Please don't forget that most "Japanese" cars sold in USA are completely different from what's sold in Europe. The market is (a) enormous and (b) fundamentally different.

Please also don't forget that BMW were building all of their X5 and Z4 in USA for worldwide sale.

This thread provides a fantastic opportunity for the British motor industry experts to outline how MG, Rover, Triumph, Austin, Riley, TVR, Morris, Wolseley, Hillman, Marcos, Talbot, Noble and others have managed to keep developing new models and growing their sales while Ford and GM have struggled.....

Errmmm, OUCH

:smirk:

[LuS1fer]

It would have some credibility if all the dealers in the US didn't take GM and Ford cars and mark them up $20000 or more to line their own pockets whenever they receive an in demand model like the Shelby GT500 or Challenger. Scabbing your own customers is the lowest practice and one that is a cancer in the dealer network, not the manufacturer. Indeed, this sort of profiteering is probably enough to not only stop people buying a particular car but sicken them so much that they never buy another Ford again. List price should mean list price.

Half the reason why some of the more desirable imports in the UK are sky-high prices (like £50k) is because of this dealer marking up.

So if anyone deserves to die, it's the pirates who masquerade as dealers.

American cars are getting better but it may be too little, too late.

[anonymous-user]

LuS1fer said:

American cars are getting better but it may be too little, too late.

IMO it'll be a cold day in hell before Ford or GM disappear.

hmmm... what's the weather forecast?

[900T-R]

LuS1fer said:

It would have some credibility if all the dealers in the US didn't take GM and Ford cars and mark them up $20000 or more to line their own pockets whenever they receive an in demand model like the Shelby GT500 or Challenger.

Um, well, the multi-thousand dollar rebates on their bread and butter cars need to come from somewhere...

[GreigM]

5 USA said:

Can't help wondering whether you actually read all of the letter.

Please don't forget that most "Japanese" cars sold in USA are completely different from what's sold in Europe. The market is (a) enormous and (b) fundamentally different.

Please also don't forget that BMW were building all of their X5 and Z4 in USA for worldwide sale.

Completely disagree that most foreign cars are completely different, in fact I would argue that they are largely fundamentally the same, looking outside my window here in New York I see a mazda 3, toyota corolla, toyota celica etc etc which are pretty much IDENTICAL to the ones I see in the UK, but I also see a load of US cars made by the "Big 3" which I will never ever see outside the USA, so while there are the occasional examples of foreign-built cars which are specific to the US on the most part the foreign companies are selling pretty much exactly the same product worldwide, while the US car makers simply can't sell their US-based products elsewhere because the quality is fundamentally st. They are bouyed by massive government contracts which mean the government pretty much must buy US-built and also a fading sense of patriotism in the "I always buy american" mentality. The point being that the US car makers are holding up their current US products as a sign of how their quality has improved shows their lack of understanding of what their competition really is. I myself am driving a US ford "focus" this week and compared to the UK equivalent it really is a useless piece of junk.

As for the Z4 and X5 - sure they are produced in the USA, but in non-unionised factories following designs which are common to the worldwide market - and the Z4 build quality is not an example to be held up for any reasons.

[LuS1fer]

900T-R said:

LuS1fer said:

It would have some credibility if all the dealers in the US didn't take GM and Ford cars and mark them up $20000 or more to line their own pockets whenever they receive an in demand model like the Shelby GT500 or Challenger.

Um, well, the multi-thousand dollar rebates on their bread and butter cars need to come from somewhere...

They do...Ford and GM.

[900T-R]

LuS1fer said:

900T-R said:

LuS1fer said:

It would have some credibility if all the dealers in the US didn't take GM and Ford cars and mark them up $20000 or more to line their own pockets whenever they receive an in demand model like the Shelby GT500 or Challenger.

Um, well, the multi-thousand dollar rebates on their bread and butter cars need to come from somewhere...

They do...Ford and GM.

Um, I don't suppose dealer margins will be the same as they would be for cars that don't need to be heavily discounted to shift? That's not the way things work over here, and I don't see why that would work over there - are franchised dealerships in the USA that much more powerful vis a vis the manufacturers?

Edited by 900T-R on Friday 5th December 19:32

[urban_alchemist]

Mr Gear said:

LukeBird said:

+1
Arguing that GM was the biggest car maker in the world, because of 3000 units, laughable!

I think arguing that GM is the biggest automaker because of GM is laughable.

It is, but not for the reasons you outlined.

As BL abtly demonstrated, quantity does not necessarily translate to profitability. The very business-model of GM (and the other members of 'The Big 2.5') means that sheer numbers are the only way to translate revenues into profit. Their margins are so small on each car, as a result of low-retail-price and legacy payments (benefits, pensions etc) that they have two necessitites: (i) scrimp on development costs, and (ii) sell in huge numbers.

That means that they can't compete with the competition on quality, only cost. And when that is no longer incentive enough - as now - and (ii) stops happening, you're well and truly fked.

They have to die, if only to be reborn. Simple as...

Edited by urban_alchemist on Friday 5th December 20:34

[LuS1fer]

900T-R said:

LuS1fer said:

900T-R said:

LuS1fer said:

It would have some credibility if all the dealers in the US didn't take GM and Ford cars and mark them up $20000 or more to line their own pockets whenever they receive an in demand model like the Shelby GT500 or Challenger.

Um, well, the multi-thousand dollar rebates on their bread and butter cars need to come from somewhere...

They do...Ford and GM.

Um, I don't suppose dealer margins will be the same as they would be for cars that don't need to be heavily discounted to shift? That's not the way things work over here, and I don't see why that would work over there - are franchised dealerships in the USA that much more powerful vis a vis the manufacturers?

I don't know exactly how it works. All I know is that if a Ford dealer wants to put a $100k price tag on a Shelby GT500 Mustang (and they did), Ford can't do a thing about it so I assume they are a lot more independent. They seem to sell a lot of cars through cheap finance plans too. I could never understand why, if there were thousands of Americans prepered to pay $20k over the odds, Ford didn't charge that in the first place and keep the money instead of lining the dealer's pockets.

What's odd is if you comment on it on a US forum, some complain bitterly about the mark-ups but still defend the capitalist society and, rather like the pirate game, say "I'll wait".

I'd love to know how it works myself, maybe it's just volume.

[Captain Cadillac]

mblade123 said:

Dr JonboyG said:

mblade123 said:

Whilst they have petrol at pennys a ltr people will buy them but as soon as the price goes up?

The attitude with the US car manufacturers is you get what we give you and not what you want.
I was there just recently and it was a big advertising thing when some average saloon car or other was getting 30mpg.
For pitys sake I can get that from my M3 on a run on the motorway.

And as for this statement

[i]Did you realize Big Three's gas guzzlers include the 33 mpg Malibu that
beats the Accord. And for '09 Ford introduces the Hybrid Fusion whose 39 mpg
is the best midsize, beating the Camry Hybrid. Ford's Focus beats the
Corolla and Chevy's Cobalt beats the Civic[/i]

What a load of rubbish. A Hybrid Fusion that does 39mpg. Oooooh wow. How much did that take to develop??? My wifes bog standard Golf TDI gets 40 odd mpg with everyday use. Take it on a run and its close to 50mpg

Your argument would be a lot more compelling if you realised that a US gallon is only about 80% of a UK gallon, and that 30 MPG in the US is about 37 mpg Imperial.

Thank you for pointing out the fact that the American gallon is smaller. I was aware of it but in my frustration at reading the rubbish in the OPs letter neglected to mention it.
Having said that, it still dosn`t excuse the fact that American car makers can`t, sorry, won`t produce an economical product with great performance.

First, the American Fusion is a saloon, and it's bigger than a Mondeo. And that is 39 US MPG, which, if calculated using Imperial Gallons and calculated using the same testing methods that the Europeans use would equate to nigh on 50mpg. We calculate our MPG figures using real-world driving conditions, fast starts, air con on, etc. Driven gently you can expect to beat current EPA figures by 10% without much trouble.

You get 30mpg from your M3 on the Motorway? I get the same from my big RWD 3.6L Cadillac STS that's nearly the size of a BMW 7 series.

Of course, if I wanted to get over 30mpg Motorway from a car that's as fast as an M3 I'd just buy a Corvette... and detune it. Of course, I'd have lots of extra cash left over as a Corvette costs a fraction to maintain and requires far less repairs than a BMW.

Hell, a Chevrolet Impala SS with a V8 engine will break 30 on the motorway, and it's 40% bigger than an M3.

I'm still waiting for Europe to produce a car that can obtain MPG, Lap Times, technological advancements, servicing costs and reliability of a Corvette for even twice the money.

Once again, Europeans have no clue about the American auto industry.

[LuS1fer]

Ah, the old ignorance gene. It tends to surface every other generation. My supercharged Mustang generates 462hp and will do over 30mpg on the motorway. It will also do 24mpg average. I can also service it myself for about 1/3 of what an M3 would cost to service and it's cheaper to tax.