Cobalt plant running at capacity.
Super Moderator
Joined: Feb 2000
Posts: 2,026
From: Japan
Re: Cobalt plant running at capacity.
Originally Posted by dav305z
This is the outlook that prevailed at GM for the 20 yrs that they left the Cavalier rotting on the dealer lots, and it's completely untrue.
First of all, Cobalt is like any car - if you sell a ton of them, you will make a lot of money, regardless of the profit margin. Sure, it's not like selling a Silverado, but they aren't losing money either.
Even looking beyond the immediate financial impact, you are missing the importance this has for GM. This is the next generation of car buyers that GM is trying to get. They missed the last generation - the baby boomers, and have seen their market share slide to the point that they need to practically give away their cars to maintain half of what they had 20-30 years ago. If GM can get young people to buy the Cobalt, and really love their ownership experience, they will come back in 3-4 yrs - with more money. Toyota and Honda got to where they are today by doing this. They got people hooked on cheap Civics and Corolla's. When they needed something bigger, many of these folks just traded up to Accords and Camrys. Now, a lot of these people are in their 50's and are driving MDX's and LS400's. In this sense, for GM's future financial outlook, this little car just might be GM's single most important car release in a LONG time.
First of all, Cobalt is like any car - if you sell a ton of them, you will make a lot of money, regardless of the profit margin. Sure, it's not like selling a Silverado, but they aren't losing money either.
Even looking beyond the immediate financial impact, you are missing the importance this has for GM. This is the next generation of car buyers that GM is trying to get. They missed the last generation - the baby boomers, and have seen their market share slide to the point that they need to practically give away their cars to maintain half of what they had 20-30 years ago. If GM can get young people to buy the Cobalt, and really love their ownership experience, they will come back in 3-4 yrs - with more money. Toyota and Honda got to where they are today by doing this. They got people hooked on cheap Civics and Corolla's. When they needed something bigger, many of these folks just traded up to Accords and Camrys. Now, a lot of these people are in their 50's and are driving MDX's and LS400's. In this sense, for GM's future financial outlook, this little car just might be GM's single most important car release in a LONG time.
Yep. I couldn't agree more. Using fancy seats and interior from the SS to equip and sell lower optioned cars is a fine idea and I hope GM does this with more than just the Cobalt in the future.
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Joined: Nov 2001
Posts: 1,646
From: Portland, OR
Re: Cobalt plant running at capacity.
Originally Posted by dav305z
This is the next generation of car buyers that GM is trying to get. They missed the last generation - the baby boomers, and have seen their market share slide to the point that they need to practically give away their cars to maintain half of what they had 20-30 years ago. If GM can get young people to buy the Cobalt, and really love their ownership experience, they will come back in 3-4 yrs - with more money. Toyota and Honda got to where they are today by doing this. They got people hooked on cheap Civics and Corolla's. When they needed something bigger, many of these folks just traded up to Accords and Camrys. Now, a lot of these people are in their 50's and are driving MDX's and LS400's. In this sense, for GM's future financial outlook, this little car just might be GM's single most important car release in a LONG time.
Although seems I've read somewhere on more than one occasion that none of the big three make money off their compact cars. Maybe I misinterpretted it.
Registered User
Joined: Nov 2000
Posts: 1,958
From: Kansas City, MO
Re: Cobalt plant running at capacity.
Originally Posted by dream '94 Z28
Bingo!
Although seems I've read somewhere on more than one occasion that none of the big three make money off their compact cars. Maybe I misinterpretted it.
Although seems I've read somewhere on more than one occasion that none of the big three make money off their compact cars. Maybe I misinterpretted it.
Registered User
Joined: Nov 2000
Posts: 2,712
From: Ontario
Re: Cobalt plant running at capacity.
Originally Posted by dream '94 Z28
Although seems I've read somewhere on more than one occasion that none of the big three make money off their compact cars. Maybe I misinterpretted it.
Banned
Joined: Mar 2002
Posts: 1,954
Re: Cobalt plant running at capacity.
Originally Posted by dav305z
This is the outlook that prevailed at GM for the 20 yrs that they left the Cavalier rotting on the dealer lots, and it's completely untrue.
First of all, Cobalt is like any car - if you sell a ton of them, you will make a lot of money, regardless of the profit margin. Sure, it's not like selling a Silverado, but they aren't losing money either.
First of all, Cobalt is like any car - if you sell a ton of them, you will make a lot of money, regardless of the profit margin. Sure, it's not like selling a Silverado, but they aren't losing money either.
Originally Posted by dav305z
Even looking beyond the immediate financial impact, you are missing the importance this has for GM. This is the next generation of car buyers that GM is trying to get. They missed the last generation - the baby boomers, and have seen their market share slide to the point that they need to practically give away their cars to maintain half of what they had 20-30 years ago. If GM can get young people to buy the Cobalt, and really love their ownership experience, they will come back in 3-4 yrs - with more money. Toyota and Honda got to where they are today by doing this. They got people hooked on cheap Civics and Corolla's. When they needed something bigger, many of these folks just traded up to Accords and Camrys. Now, a lot of these people are in their 50's and are driving MDX's and LS400's. In this sense, for GM's future financial outlook, this little car just might be GM's single most important car release in a LONG time.
How many Cobalt buyers will end up being life-long GM buyers?
Banned
Joined: Mar 2002
Posts: 1,954
Re: Cobalt plant running at capacity.
Originally Posted by R377
It is true that domestic automakers don't make money on small cars, or even midsized cars for that matter. Simple math will demonstrate this. Let's say GM-NA makes $2 billion profit this year (even though they won't). Now let's assume that each GMT-800 and its variants pulls in $3000 in average profit. They sell about 1.2 million of these a year, or $3.6 billion in profit, just from trucks. But if the entire company makes only $2 billion, that means that some other car lines must be losing about $1.6 billion to pull down the profit. Care to guess which ones?
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Joined: Oct 2003
Posts: 1,276
From: Chattanoga & Franklin
Re: Cobalt plant running at capacity.
Originally Posted by redzed
It kinda makes you question the post Zarella, Lutz-era decision to shift resources from to passenger cars from SUVs and trucks.
I think the fullsize SUV will be almost extinct in about 15 years. They will sell a few of them, but only to people who really need a vechile with that type of capabilities. 15 years from now, fullsize SUVs will go out of style with the family types, they will have moved on to more efficent and nicer driving car based crossovers.
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Joined: May 2001
Posts: 858
From: Ft. Lauderdale, FL
Re: Cobalt plant running at capacity.
Originally Posted by redzed
Does "brand loyalty" still exist?
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Joined: Jan 2000
Posts: 10,285
From: Albany, NY
Re: Cobalt plant running at capacity.
Originally Posted by redzed
Does "brand loyalty" still exist? How many Cobalt buyers will end up being life-long GM buyers?
How many Cobalt buyers will end up being life-long GM buyers?
Registered User
Joined: Mar 2005
Posts: 757
Re: Cobalt plant running at capacity.
Originally Posted by redzed
What don't you understand about "irrelevent?" There is no way that a very predicable ramp-up in Cobalt production can make up for the equally predictable fall-off in SUV sales.
Does "brand loyalty" still exist? How many Cobalt buyers will end up being life-long GM buyers?
How many Cobalt buyers will end up being life-long GM buyers?
.In any case, haven't you ever heard the term "Honda fanboy"? Japanese brands have earned themselves huge followings by grabbing customers at early ages with their affordable small cars. So again, if GM can do this with the Cobalt, they WILL have people looking at GM dealers before any other dealers for their next cars. And just perhaps, these people will be willing to by the car without having GM pay them to do so.
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Joined: Nov 2000
Posts: 1,440
From: five-one-oh/nine-oh-nine
Re: Cobalt plant running at capacity.
GM running its plants with no downtime does NOT impress me by itself. we all know what happened with GM running production of the Saturn L series and the XLR what with a 2 year supply already banged out as of today. Awesome.
I want to see steadily increasing sales figures. Yeah, that would impress me.
I want to see steadily increasing sales figures. Yeah, that would impress me.
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