I think the vehicles could support an increased price by increasing the quality of interior materials slightly...I mean, stopping the generous use of cheap PLASTIC!..add more real wood and light metals.
Also, Buick could compete with Lexus by offering more optioned base, excuse me, "standard" models. People do a lot of "Standard vs standard" model comparisons.
Buicks already a step above Pontiac or Chevy in build and fit.

 

Ah - so we're now not talking about just raising the price, we're readjusting the position in the market via the addition of features. Which, er, is exactly what GM is already doing by reducing its fleet sales, which correspondingly has increased the average transaction price at the cost of reduced production. How it will play out in the longer term is yet to be determined, of course; an accurate assessment of this strategy may require several years of commitment to it.

Until GM can reduce its fixed costs and the lack of flexibility that they bring, it's still a necessity to keep its plants as close to 100% capacity as possible. Any additional cost incurred by downtime will quickly eat away at the additional profit gained via a different marketing strategy. It's not an enviable position to be in, and I hope that GM can figure out a way to fix it. I fear that the current cost-cutting plan simply reduces the size of the company down to the point where it's properly sized for the current 25-26% market share, and hasn't yet addressed the sort of cuts and realignment that might be necessary for a longer-term market share in the 20-22% range.

 

DING! DING! DING!

WINNAR!

 

You CAN'T make it go away, magically or otherwise.

You can only minimize two ways:

1) Sell more cars and thereby spread that cost over more vehicles.

2) Offer buyouts to your employees to limit the harm they cause.

Now, let's say GM is successful in lowering that cost by $100 per vehicle... what are they going to do with it?

First, they have to return to profitability, so some chunk of it is going there.

What are they going to do with the rest?

Add content to the vehicle and invest in new programs.



This is only partially true - Chevrolet and Cadillac DO NOT have problems here.

Chevrolet ALONE outsells Toyota, Scion and Lexus COMBINED in North America.

Cadillac is the #1 luxury brand in North America.

Where's the problem?

Buick, Pontiac and Saturn.


Who is giving away Cadillacs or Chevrolets??? We snapped on an HHR so quickly because they offered 0% financing, the first tangible incentive offered on the vehicle since it launched...

Here's the facts, by segment, of where Chevrolet is positioned:

Compact Entry:
Aveo - #1 in sales.

Compact Premium:
Cobalt - #3 in sales.
HHR - #10 in sales.

Midsize Entry:
Malibu - #2 in sales.

Midsize Premium:
Impala - #3 in sales.
Monte Carlo - #21 in sales.

Sports Premium:
Corvette - #1 in sales.

Midsize Pickup:
Colorado - #3 in sales.

Fullsize pickup:
Silverado - #2 in sales.

SUV - Entry:
Equinox - #5 in sales.

SUV - Midsize:
Trailblazer - #2 in sales.

SUV - Fullsize:
Tahoe - #1 in sales.
Suburban - #3 in sales.

Van - Midsize:
Uplander - #6 in sales.

Van - Fullsize:
Express - #2 in sales.


You can see the successes for yourself. Chevrolet is dominating trucks, Impala, Aveo and Malibu are all very successful in super-tough segments, Corvette OWNS it's segment (it's small, but important).


ALL DATA TAKEN FROM JD POWERS NORTH AMERICAN VEHICLE SALES REPORT THROUGH MAY 31st, 2006.

 

OK, let's look at the results above and point to what GM has to do where it matters most - Chevrolet.

1) Four segments dominate car sales - Compact Entry (Chevy is #1), Compact Premium (Chevy is #2 with HHR and Cobalt combined), Midsize Entry (Chevy is #1) and Midsize Premium (Chevy is #3).


2) For Compact Entry and Midsize Entry Chevrolet is doing fine - it doesn't get any better than #1. The way to stay that way is to restyle and re-engineer the cars on a 4-5 year cycle and continue beating the competition in the value department.

Concentrate on better fuel economy - a huge selling point in this segment.



3) For Compact Premium, Cobalt is doing fairly well but needs some improvement. This is a VERY tough segment populated with formidible competitors (Civic, Focus, Corolla). The way to win here is to offer even more content at a lower price and improve fuel economy.

HHR is a home-run. Why? It's basically a Cobalt that you get to charge a significant premium for because of great styling and features. You can do that from time to time, but you can't do it ALL THE TIME. You still have to have great bread and butter cars. Appliances will ALWAYS outsell toys.



4) For midsize premium, Impala is very succesful, but it CAN BE a world-beater... Camry needs to be tackled head on, and Impala can do it.

Firstly, realize that calling an Impala a midsize is a misnomer - it's really a large car.

Second, Impala solidly "out-values" Camry. It has higher content and is just a flat-out better car for the money. To win there, Chevrolet has to change perception more than they need to change the car:

Get into a "Warranty War" with Camry. Whatever Camry has, Impala beats by 1 year and 12,000 miles. If Toyota raises theirs, Chevrolet immediatly responds. ADVERTISE IT.

Start a "Fuel Economy War" with Camry. Beat every V6 motor they sell, no matter what, in fuel economy AND power. The 5 and 6 speed transmissions are critical here. Tout E85 as much as possible for Impala. This is a tough job - Impala is a physically larger car - but it can be done. Consider fast-tracking an hybrid with E85 compatibility - think of the hay that can be made there!!!! ADVERTISE IT!!!

Get into a "Feature War" with Camry. Advertise them head-to-head, feature-for-feature, and beat them across the board. ADVERTISE IT!!!

Win the "Quality War" with Camry. GM has the best plants in North America for quality. Beat the Camry at it's own game AND ADVERTISE IT!!!

Win the "Styling War" with Camry. Given how truly awful Japanese stylists are, this one is going to be cake. ADVERTISE IT!!!

All the while, keeping winning the "Price War" with Camry - something Impala already does with ease. ADVERTISE IT!!!

DO NOT convert Impala to RWD. DO NOT make Impala smaller. DO NOT decontent Impala and sell to fleets if at all possible.

DO NOT turn to radical styling to sell Impalas - Camry and Impala buyers DON'T WANT cutting edge styling. The want a nice-looking, comfortable, high-value, efficient, inoffensive appliance.

Restyle and reengineer Impala EVERY FOUR YEARS, without fail.

Finally, BUILD THE EVER-LOVING **** OUT IMPALAS. Allot more of Oshawa to building Impalas so that it can take up the slack from poor LeCrosse and Grand Prix sales by building even more Impalas. DO NOT let Oshawa slow down at all, EVER - if Monte Carlo or Grand Prix or LeCrosse aren't selling, BUILD MORE IMPALAS. A minimum of two shifts running full-out, ALL DAY, EVERY DAY. Drive the prices down through volume to increase the value equation even more in Impala's favor.

 

Now, let's talk about the problem children:

1) Chevrolet Uplander - Horrible restyling, just terrible. The Uplander breaks Rule #1 of appliances - it looks weird. "Boring" is what sells. GM's minivans have always been terrific from a features and quality standpoint - but the styling has many times been awful. Institute a crash restyling program and follow much of the pattern shown above with Impala regarding features and content.

Thank you for killing the 3.4 liter dead. NOT because it is OHV motor but because the reliability record of said motor is not very good.

Needs 5 or 6 speed automatic - simply for the sake of fuel economy. I think one is coming, on the way, or already here.



2) Chevrolet Colorado - The jury is in. The I5 was a bad idea. The truck is not doing well and is a weak point in Chevrolet's truck line-up.

I kind of like the Colorado... but not enough other people do.

This isn't personal, but the fact is that the truck isn't selling well enough.



3) Chevrolet Equinox - The single weakest point in Chevrolet's truck line-up relative to the rest of the market. This is a tough segment, but the fact is that Equinox is not doing what it needs to do here.

Why?

I don't know. Equinox seems like a nice enough vehicle. It's got neat features... gets relatively good fuel economy... This one is somewhat puzzling...



4) Chevrolet Trailblazer - Here we go with a CLASSIC GM mistake. The damned thing hasn't been truly restyled in AGES - and isn't going to be. The entire segment has taken a hit because of fuel economy, but the fact is that the Trailblazer is a far, far better vehicle than the segment leader - but the styling IS OLD HAT NOW.

It's #2 in segment, but the segment is dropping like a rock and it SHOULD BE #1. The restyled Explorer is a turd and ripe for being overtaken.



5) Chevrolet Monte Carlo - With the advent of the new Camaro soon, kill it and build more Impalas. It no longer makes much sense to build it... apart from NASCAR... but the sales are poor even with it being the Chevrolet NASCAR vehicle.

The Hyundai Azera outsells the Monte Carlo, and I have no goddamned idea what a Hyundai Azera is... and I work in the automobile industry... that oughta tell ya something about the sales of the Monte Carlo... cars I have never heard of outsell it.

 

The final point?

Treat Chevrolet like what it should be - a car company UNTO ITSELF.

Get Buick, Pontiac, Saturn, Hummer and Saab the hell out of Chevrolet's way.

GMC IS out of Chevrolet's way, mostly because it IS Chevrolet.

Here's a wholly radical, and risky, idea, but it should be considered:
The ONLY division that gets to trump anything Chevrolet wants or skew a business case is Cadillac - not because they're bigger or more profitable, but simply because they carry the upper-crust image of GM on their shoulders.

 

I guess it is possibly to get the other brands out of the way, but not soon... It would take years to re-position the other brands and give them the cars that would meet these goals...

I could see buick being an AWD division, pontiac rwd, saturn is basically going with a good direction right now, and saab... who the hell knows... saab should only have 3-4 vehicles. 9-3, 9-5, 9-5 wagon, and I guess an SUV...

 

I thought we were talking about the increased profit from reducing fixed costs and re-investing them into new models. I guess that is what you get for skimming a thread.

 

The only way i'de be for Impala staying FWD is if they still bring back the big RWD sedan...caprice or whatever they choose to name it.

I dont think the malibu is going to cut it. They can lengthen the car and try to move it into impalas segment, but atleast to me, I dont think its going to work.

 

I suspect you're correct about that, as we're long past the point when significant portions of the population just walk in to the Chevy dealer out of tradition. Going forward, niche/targetted marketing is going to become even more important in auto sales than it already is, and that spells enormous difficultly if your economic fundementals demand a consistantly high sales volume.

If there's any positives in the current GM strategy, it's the investment in the brands folks here love to hate -- Saab, Saturn, and Hummer*. By reinforcing the image of these brands, they much more strongly postioned for the post-massmarket era.

(* While I'm dubious about the long-term popularity of Hummer, you can't argue with the brand strength. If anything the brand is TOO strong, to the point where it might repell more customers than it can attract.)

Honestly, I'm not convinced GM makes any money off Malibu or Aveo. They seem like plant-fillers to me.

I was amazed
Then it turned into another GM "Best Value" argument, which has proven not to work well in the real world. For people who can afford a Camry, the Impala just doesn't cut it.

I toally agree 100% that Impala should target Camry dead-center. This is war, and GM has to win. I'm just not convinced the current Impala is the car to do it with -- personally I don't believe it measures up to Camry. Maybe that's a "perception issue" .... but a common one.

This runs counter to your early argument of Volume, Volume, Volume. Because, let's face it, GM has largely been able to keep those plants running by dumping rebadges into Pontiac/Buick. And as seen with Cobolt, if they miss the mark, just make a Pontiac. The challenge is making absolutely sure they can not miss the mark.

 

Yeah - it's amazing what knowledge one can pick up by, you know, actually working in the industry.

 

Must be the paint fumes, bro.

 

How does Impala "solidy" out-value Camry?

I'm not saying it's a bad value, but if it "solidy out values" Camry then you should be able to present me with some side by side pricing comparisons.

I just went on carpoint.com and priced the top model Impala and the top model Camry and equipped them as evenly as I could which basically meant I left stability control (VSC), navigation and the keyless start off the Camry

The Camry came to 29,100 w/ destination. The Impala came to 30,730 w/ destination.

I mean is it the V8 that gives it the "solid" extra value? How many people see a "solid" extra value in their 4-door family sedan because it does 14.3 in the 1/4-mile instead of 14.9? Is that worth an extra 1600 bucks?

Maybe peopel would rather have a 6-speed auto instead of a 4-speed? Or the extra average 3 mpg advantage the V6 Camry gives over the SS? How about 5yr/60k powertrain coverage instead of 3yr/36k? How about actual automatic climate control instead of the old school manually controlled switches. How about air that blows on the back passengers too? How about cup holders in the back?

Gear heads understandably put a lot of focus on the performance side of things but gear heads don't buy most Impalas and Camrys... families do. And I'll tell you I bet among the differences I mentioned above, the V8's extra performance doesn't make a solid value case for the Impala in the light of the other differences I mentioned - especially gas milage and price differential.

Again, I'm not saying the Impala is a bad value or a bad car but I fail to see how you can make such a blanket statement that the Impala is solidly/obviously the better value when it my side by side comparisons, short of an pretty small acceleration advantage, the Impala actually offers slightly fewer features for slightly more money.

 

It's only slighty more money per list prices -- in practice with incentives and fleet sales, you can bet the Impala's ASP is well below the Toyota's.