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Thread: The State of The Car

  1. #166
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    Quote Originally Posted by NSXType-R View Post
    I'm still not sure why Ford decided to sell Jaguar and Range Rover.

    It's not like they were losing money or anything.

    I have a feeling that the XF and XJ were both developed well before Ford sold them off, so it's not like they didn't have direction, but I could be wrong.
    Ford was desperate for cash. They sold just about anything they could for cash and put the rest in hock. Had things go wrong, even without the financial crash Ford would have even lost the trademarked blue oval. In a sense Ford was lucky in that they were hard up for cash two years before GM. That meant Ford had sold everything and got their emergency cash lined up before 2008. GM MIGHT (and I say that because it was not at all certain) have weathered the storm had they done the same thing in 2006. In the short term in 2005 and before people realized just how bad 2008 would be, GM looked like they were on track for a slow but steady recovery. The financial crash that resulted in even Toyota claiming a loss was too much for GM given their huge legacy costs.

    Anyway, Ford may or may not have seen a long term future with Jag but they certainly needed the money NOW so they sold at a loss despite all the work they put into the company. This is likely the reason they dumped Mazda as well. Otherwise that was a good partnership for Ford (and a life raft for Mazda).

  2. #167
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    Quote Originally Posted by culver View Post
    They weren't luxury in Europe but that is how they were pushed on US buyers. To be fair, the European cars we got typically were deluxe models and they would be about what people would consider entry level luxury in terms of equipment and features.
    Avoidable Contact: Rich Corinthian Swaybars | The Truth About Cars

    It used to shock Americans when we would see Mercedes sedans being used as Taxis and coming with features and trim levels that were no higher than a Malibu or Camry. Mind you the Mercedes importers only ever brought over the nicest versions. Still, the thought of using a luxury car for anything other than a Limousine was crazy! Of course that was yet another difference between the markets. I suspect Europe, lacking as many larger cars basically had to use things like E-class Mercedes when a larger sedan was needed because they didn't have a large VW. Of course the US had plenty of large cars.

    Anyway, the fact is SAAB was a bit stuck. They either had to go main stream and get the numbers way up or they had to go way up in price. They couldn't remain semi-premium and semi-expensive. The economics of making cars just doesn't allow that anymore. To make maters worse, the only way to increase volume would be to go mainstream with a larger host company. Audi-VW could pull that off. They were both German so both had that "German car" cachet. They also had long since been sharing parts. SAAB didn't want to fully embrace GM (not without good cause) but they had also misstepped with other makes first. Kind of a bad deal all around. GM wasn't good enough to save SAAB and SAAB wasn't smart enough to save it's self given all the resources GM threw at it.

    I'm going to take a wait and see on JLR. They might live. They have an upside in that the brands fit nicely together. They also were in decent shape when Ford left. Tata is likely to value the premium brands and perhaps is willing to handle some loss for a bit. Shedding them might be goof for Ford in the long term since they can finally really concentrate on fixing Lincoln (a very sad shadow of it's former self). Still, volume means a lot in this business.

    Avoidable Contact: Lexus killed Saab, but GM let Saab die. | The Truth About Cars
    Interesting articles.

    But while I can generally agree with them, they are in parts biased and in others simply not true.

    Except for some exceptions Saab was never cross-shopped with Peugeot or Renault or any other mainstream European car maker. As I said Saab was in the same market that BMW, Alfa Romeo, Lancia, Rover or even lower end Mercs were. Perhaps it wasn't as clear as the division structure of American car makers were but those aforementioned makers were above the generalist makes. Thier differentiation didn't come from power everything as American cars did but they were better in other aspects, like reliability, quality, safety handling or performance. That is in no doubt due to the different conditions different markets were facing. The article only mentions the privilege of owning a car in Europe, which is indeed one aspect, but there were also others, like geography constraints, fuel prices, road shapes, etc.

    Also the article focuses on how Saabs became just mainstream products and failed to fight Lexuses. It is forever banging on, on how possibly a midly modified Vectra was going to compete with endless hordes of ever improving BMWs. And that's all very well, but they seem like they forget to mention the rise of Audi in the 80's and 90's. Cars that were (are?) little more than rebadged VWs with a questionable mechanical layout went from being a moderately well built, reliable car to the next best thing in the premium sports saloon and coupé pantheon. Audi's reputation was built primarily on marketing, and if Audi pulled it off, why couldn't Saab? It is only ironic that the A5 Sportback and A7 Sportback which would make for perfect Saabs now sell llike hot cakes under the Audi brand.

    Surely Saab's sutbornness and reluctancy to accept any corporate mandates from GM musn't have helped, but in my opinion the fact that GM simply failed to understand Saab and capitalise on the image they had built is something that certainly doomed them. Perhaps they needed more volume, or to go further upmarket but cars like the 9-2X or the 9-7X lead me to believe the corporate management at GM didn't have a clue about either of the options.
    Quote Originally Posted by NSXType-R View Post
    I'm still not sure why Ford decided to sell Jaguar and Range Rover.

    It's not like they were losing money or anything.

    I have a feeling that the XF and XJ were both developed well before Ford sold them off, so it's not like they didn't have direction, but I could be wrong.
    Jaguar was indeed losing money under the last years of Ford ownership and continued to do so for the first years of Tata ownership. It's only recently they have become profitable again.
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  3. #168
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    Quote Originally Posted by culver View Post
    This is likely the reason they dumped Mazda as well. Otherwise that was a good partnership for Ford (and a life raft for Mazda).
    Well, at least this will give us the next-gen rear wheel drive Alfa Spider.

    And that can only be a good thing.
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  4. #169
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    In the US I'm sure SAAB was cross shopped with other Euro brands. It might not have been that way in Europe but it was in the US. I also think the article was probably right in that much of what made Euro cars popular here was that they weren't main stream. Owning one, even when often they weren't significantly more reliable than the junk the US was producing, mean you had something different and special at a time when the domestics were starting to embrace badge engineering. This article provides a nice primer...
    Avoidable Contact: How Fake Luxury Conquered The World | The Truth About Cars

    I agree GM failed to understand SAAB. I also suspect that SAAB failed to understand the reality that being perfect for 80,000-120,000 buyers a year wasn't going to cut it. What many, my self a SAAB owner included, liked about the company was how the product was unique. Unfortunately some of that comes from doing things that don't appeal to the masses. Anyway, SAAB was kind of trapped between being near luxury defined by quirks and real volume typically achieved by removing quirks. GM wasn't good enough to make it happen and SAAB wasn't good enough to make it happen given all the resources offered to them. Cars like the 9-2 and 9-7 are easy to point at as examples of GM's failure to understand but really, at that point GM had been working with SAAB for 15 years. Those cars were really evidence that SAAB was already in deep trouble rather than evidence that GM didn't understand. The dealers in the US were screaming for product and GM, thanks to many local dealer franchise laws that are incredibly one sided in favor of dealers, had little choice but to listen.

  5. #170
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    Quote Originally Posted by culver View Post
    In the US I'm sure SAAB was cross shopped with other Euro brands. It might not have been that way in Europe but it was in the US. I also think the article was probably right in that much of what made Euro cars popular here was that they weren't main stream. Owning one, even when often they weren't significantly more reliable than the junk the US was producing, mean you had something different and special at a time when the domestics were starting to embrace badge engineering. This article provides a nice primer...
    Avoidable Contact: How Fake Luxury Conquered The World | The Truth About Cars
    Interesting, but I guess we were sort of saved from this because of two reasons:

    -We didn't have a big corporation dominating the whole market, and the big industrial groups didn't have many divisions to really cover the entire market at the time (the monster that VAG is now was still very much 15 or 20 years in the future)

    -Our differences were more than skin deep. This could also be due to national differences between car companies. I mean all of the divisions within GM (or Ford, or Chrysler) were Amercian and built cars for American people, which meant that more or less shared the same culture. In Europe though, one company was Italian, the other French, another one British, and then there were the Germans and the Swedes amongst others. Those had different cultures and living conditions which also dictated the way the cars were and meant that Volvo was very different from an Alfa Romeo which in turn was very different from a Triumph.

    However, there's also something interesting in the article and which you mention as well, the democrtisation of luxury, which eventually can put an end to the products that lived from that luxury as a sort of selling point. I can agree with that, but now that premiumness (which can be considered the new word for "luxury") is selling better than ever it doesn't seem like this is putting and end to all those so-called Premium brands. Why is this popularisation not affecting them as it did the GM divisions in the seventies?
    Quote Originally Posted by culver View Post
    Those cars were really evidence that SAAB was already in deep trouble rather than evidence that GM didn't understand.
    I guess the question is; Was failure a consequence of GM's misunderstanding of Saab or was it the other way round?
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  6. #171
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    I think the failure of SAAB was SAAB wanted to stay what it was in the late 70s and early 80s. That was understandable since that was their best time and much of what people love about SAAB was from that time. The problem is the market doesn't support that any more. The economies of scale needed to make a car don't let you make what SAAB wanted to be for the prices that people were willing to pay for SAABs. Perhaps if the 9-5 sold for BMW 535 money the numbers would work. When it had to sell for far less the numbers just didn't work.

    Early on GM largely let SAAB do it's own thing (GM had their own issues to deal with). SAAB did but they didn't do what was needed for the future. By the time GM came in and really took control a decade had passed and SAAB was in worse shape. At that point GM wasn't talented enough to fix things (they might not have been even if they started early).

    I'm not sure I understand your question about popularization vs luxury. As a side thought I do think that many things in mature markets like cars are purchased based on "premium" vs what might be considered luxury features. I have a friend who is looking to replace a 10 year old BMW 530. He's suggested a number of cars including a FWD luxury car. I suggested he take a look at the new Lincoln entry level sedan when it comes out. He said no because he doesn't consider it to be a quality car. The issue is his sense of premium. The BMW is a very nice car but realistically it's fit and finish isn't flawless and is likely no better than the new Lincoln. If he means reliability, a historically valid point, then again he is wrong as Ford's current reliability (Lincoln included) is very good while his BMW has actually been rather poor. If he said it was about the feel of the car and the driving experience I could understand but then the Lincoln is likely to be very comparable to one of the cars he was considering. If he said he didn't like the styling that is again OK. Instead he didn't like the idea of driving a Lincoln. It was entirely the thought that counted.

    I guess we could say the same thing about Swiss watches. In the 50s the American watch brands delivered a very good product for a reasonable price. They rarely were as good as the premium Swiss watches but were probably as good if not better than the average Swiss watch. In the 70s the Japanese came in and messed everything up. Quartz watches mean that one of the long standing criteria of a superior watch was removed. While sub 5 second per day accuracy was considered premium in a mechanical watch, it's rather poor for a quartz watch. The durability of a quartz also was far superior to a mechanical. Basically the quartz watch SHOULD have made all mechanical obsolete and consigned them to the same grave yard as things like the Accutron. Instead, and perhaps because with clocks everywhere now watches are more a fashion item than a needed tool, we have now decided that these inferior mechanical movements are premium. If you wear one it's because you know more about watches than that common slob with a Tag quartz F1. No, it means I'm dumb enough to love an inaccurate mechanism more than a superior quartz movement. The Swiss did a brilliant job capitalizing on that. Now they get to charge more than ever for the same movements they were about to ditch in the 1970s. I think the ETA in my watch dates back to the late 60s or mid 70s.

  7. #172
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    I've had the same conversation with a friend, like you had with your BMW v Lincoln friend. Only this time it involved Mercedes-Benz and Alfa Romeo. His family has been a long a time customer of Daimler (and he currently drives a previous generation R171 SLK) and wouldn't be caught dead in an Alfa Romeo because well... it's an Alfa Romeo.

    My question about the democratisation of luxury/premium arised from the article you posted. If I understood right one of the reasons that killed GM's class systems is that in the end everyone started offering the same to all customers, so that the expensive divisions started exploring cheaper segments of the market and viceversa.

    This is a sort of what's happening with the current premium brands (with the possible difference that they are not, for the most part, part of large corporation and are treading on the toes of cheaper products made by the same group, or at least not as extensively as GM products did in 70's) and premium, altough not always objectively justified, is selling more than ever.

    Arguably this should kill them (or take them into deep trouble at least) like did with GM divisions in the 70's and 80's. But it doesn't seem to be any signs of that in the market. Why?
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  8. #173
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    OK, I see your question now. I don't think we would see a merger of premium and mainstream brands. In the US Cadillac was always nicer than Chevy. The same was true of Lincoln and Ford. Only Chrysler fell to the point where a Chrysler was the same as a Dodge (Yes, Chrysler was once quite a premium make).

    In Europe you had more competition so you never had companies develop the multi-layers like GM had (a very good idea for GM back in the day). The market has evolved to the point where I think there is pretty much room for mainstream and "Normal-Luxury". I will leave out the ultra luxury like Bentley and RR since they are very small volume. What gets squeezed out are the in betweens like Buick (alive only because China placed historic value on the name), Olds, SAAB and in the future possible Citroen and Volvo. Those brand might live if they are heavily based on other platforms but they are too small to support their own full lines.

    The European premium brands did move down market some. Mercedes seems to be retreating from their move into the common class (A-class, low end C-class). But keep in mind that VW-Audi-Porsche are already doing the platform and parts sharing game. VW has experienced a case of too much overlap with the B5 Passat - Audi A4. I knew a few people who decided the cars were so similar and the Passat was the better buy. VW has since corrected this mistake. Toyota has also tried to have less obvious overlap between the Camry and the ES-350. Anyway, I think the market does have room for two levels so I don't see premium going away. However, it would be interesting to see, at least in the US, what the % luxury brand breakdown is now vs say in 1970. In 1970 Lincoln and Cadillac were the biggest luxury players with Chrysler likely 3rd. However, if I would count SAAB and Volvo as luxury today then Mercury, Olds, and Buick would all count back then.

    Finally, so long as the brands are largely reworks of other models it shouldn't be too bad to have yet another brand. For instance, GMC trucks and SUVs are clearly just versions of other GM products. In some cases they at least don't look identical, in other cases they are clearly the same. However, GMC marketing really does work and GMC really does earn more per truck than Chevy so GM elected to keep the second brand. I think it was also because it gives Buick dealers in the US a sister product. VW of course has SEAT and Skoda. Again, clear re-badges but R&D for those are low so why not.

  9. #174
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    Well I guess European Groups are mainly in the same position because they do not have as many divisions as US Groups have (had).

    Altough VAG is getting there (and there's the case of Seat and Skoda as you said, altough rarely staright rebadges) and FGA also had/has the problem of Alfa Romeo and Lancia which have suffered greatly under Fiat ownership and are languishing today.

    By the way, I've always thought the Chrysler's premiumness was never properly exploited much like Saab's case. Is this correct or does the distance and ocean in between distortionates my view? I always have thought that Chrysler was the coolest of the American car makers.

    EDIT Oh, and it seems like GM is having another go at Opel. I wonder if it will be successful this time...
    Last edited by Ferrer; 07-01-2012 at 01:37 PM.
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  10. #175
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    I think Chrysler was premium until the 1970s. I think it was always trailing Lincoln and Cadillac but it was respectable and the company was an innovator. Some of the industry's firsts came from Chrysler. I think they were the fist to do ABS and I know they were the first to really embrace airbags. Then again I think they always felt a bit second tier hence the desire to create the DeSoto brand. However, around 1980 Chrysler was hard up it dumped any real pretense that the Chrysler brand was playing with Caddy and Lincoln. At that point it was more like the premium Fords and Buicks. You know, the ones that killed the marketing ladder GM worked so hard to set up. So by the 80s there was little to set Chrysler apart from Dodge.

    As for Opel, well I hope GM gets them together. Then again, it might be better for the US if they didn't. That might move more car design back here. I think GM has looked at cars about the way Ford did. You have redundant design departments. In that case it makes sense to spread the load. The US gets trucks by default since we buy them. We also get the Corvette and Mustang. The rest gets sent over the world. Ford had Mazda and Ford Europe doing most cars. Now that Mazda's gone I suspect that Ford Europe is doing most of the car design work. They might be better than Ford US, but maybe not. The Ford of Europe products were nicer over the last 20 years but that also reflects the market demands and reality. GM seems to have done a similar thing. Australia does the RWD big cars. Korea does the little things. Europe does the middle stuff. I suppose both companies could dump Euro production but that seems rather dumb.

    Anyway, I hope Opel can get sorted out.

  11. #176
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    Next problem, are convertibles on the way out?

    Convertibles are down, but are they on the way out?

    Discuss.
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  12. #177
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    All out? Never. Down, well convertibles are typically the less practical choice. When times are good and money abounds people are more likely to spring for that toy car. When time get tough, and reports are these are tough times, "middle class" luxury items get reduced. So the number of high end convertibles probably won't change but the number of "middle class" convertibles likely will drop.

    I'm not sure about in Europe but my impression in the US is we have fewer of what I might call sedan convertibles. By that I mean convertibles made from honest 4 seat cars vs two seaters (Miata, Z4) or basically two seaters (MINI). Sure, we still have the higher dollar models from BMW and Audi. We also have the Mustang and Camaro convertibles. What we don't have are as many things like the Camry Solara. Chrysler still makes the 200 convertible (the follow on of the Seabring... a decent car before the dark DC days) but the range of convertibles in the more affordable price range does seems to have declined.
    I also wounder if this is a marginal cost thing. In the late 80s for instance GM not only had the Camaro convertible but convertible versions of the Cavalier and Beretta, the Corvette of course, and the Old's Cutlass vert. I'm not sure if any sold in great numbers but aside from the Corvette none were that expensive. Now GM has just the Camaro and Corvette in the US. So in the past was it cheaper to make a convertible version of a car? Is it that much more expensive to take the convertible through safety testing or are production costs that much more streamlined today where convertibles just suck up the margins?

    It would be interesting to know.

    Of course with record setting highs around here (43 C last weekend! A normal summer high might be 38) perhaps people are just more interested in cars with AC.

  13. #178
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    Here in Europe convertible versions of C-segment cars are still relatively common (Eos, Golf, Megane or 308 to name a few). For a while, with the advent of folding metal roofs, there also seemed to be a sparkle of B-segment based open topped cars, but it seems that only the 207 survived relatively healthily and it still remains to be seen if it will make the transition to the new 208.

    If we go bigger than that it is indeed premium terrority, since generalist car makers can't compete on image and I guess that the developments costs for those would make it hard to price them competitively. Two seater roadsters are a different matter. The MX-5 reigns supreme at the lower end of the market and pretty much nothing can touch it (despite valiant attempts like the Renault Wind) altough the lead could be challenged by the recently introduced Mini Roadster. If we up the ante it is, again, premium all the way, up to the superexotic Lamborghinis, Ferraris and Paganis.

    But all in all Europe the offer is still here for a wide array of budgets, so I personally wouldn't worry too much about the demise of the convertible yet.

    I think that one of the features that has possibly saved the convertible from extinction is something that us, the petrolheads, don't like too much: the folding moetal roof. This has made the convertible and much more practical car, since it has allowed to double as an everyday car and a weekend toy. And the wider appeal is always good in terms of sales and therefore profits, helping it survive and maybe even making it more propular than it wouldn't have been with a soft top only.
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  14. #179
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    What's the price of a MINI Roadster vs MX-5? Personally I think the MINI Roadster is hideous but the standard MINI cabrio is fine. It wouldn't surprise me if the MINI cabrio has taken some sales from Mazda. The MX-5 was well placed when it came out because it could be sold both to the driver who appreciated the chassis and to the Sunday "cute convertible" driver. The MINI cabrio is perhaps not as good a chassis, though no slouch, but the MX-5 is one of the few cars that is less practical in terms of cargo space. I mean you can at least claim the MINI will seat 4. I would say you could put kids in the back but in the US that typically is not allowed without child seats. While infant seats are a significant safety feature, seats for younger kids aren't really of significant value. They represent legislation without ration.

  15. #180
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    The article fails to take a good look through history as the late 70's immediately came to my mind when production of convertibles was halted due to crash concerns(in USA). Granted that wasn't a market condition....but way before that sales of convertibles have been up and down(no pun intended).

    Wiki:

    [ame="http://en.wikipedia.org/wiki/Coach_convertible"]Coach convertible - Wikipedia, the free encyclopedia[/ame]

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