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GM Will Back Out Of Passenger Car Business per Morgan Stanley


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22 replies to this topic

#1 OFFLINE   RadicalX

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Posted 14 May 2018 - 08:29 AM

First, Fiat-Chrysler Automobiles made a splash when it axed the Chrysler 200 and Dodge Dart. Ford made a cannonball announcement when the automaker said it will kill off all passenger cars in North America, save for the Mustang. General Motors? Its sedans are sticking around, but perhaps not for the long-haul.
Morgan Stanley analyst Adam Jonas told Bloomberg in a Friday report that the automaker will surely follow Ford and FCA. We think that GM is going to follow Fiat Chrysler and Ford, he said.
Thus far, GM has not made any explosive announcements surrounding its sedan lineup. Instead, CEO Mary Barra called the segment significant and told reporters GM will make decisions more carefully when investing in its passenger car lineup. Her comments didnt come as exactly a vote of confidence.
Reports from last summer claimed GM has internally researched killing off numerous sedans from its brands. They included the Chevrolet Volt, Impala, Buick LaCrosse and Cadillac CT6. The automaker has not confirmed any of the nameplates deaths. The Chevrolet Sonic is reportedly nearing its end, but the small car will stick around for the 2019 model year, to our surprise.
Meanwhile, GM will invest tremendously in battery-electric cars and utility vehicles. The automaker has plans for 20 new EVs by 2023.


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#2 OFFLINE   blwnsmoke

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Posted 14 May 2018 - 08:50 AM

You forgot the "says Morgan Stanley".. little misleading title.

#3 OFFLINE   RadicalX

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Posted 14 May 2018 - 09:05 AM

You forgot the "says Morgan Stanley".. little misleading title.


That's the title of the news at the GM Authority. Don't be dramatic

#4 OFFLINE   twintornados

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Posted 14 May 2018 - 09:52 AM

I am left wondering what the Korean and Japanese manufacturers have in store for their sedans....are they too experiencing declines to the point of axing the products all together?


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#5 ONLINE   rmc523

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Posted 14 May 2018 - 09:59 AM

That's the title of the news at the GM Authority. Don't be dramatic

 

He's not being dramatic, I agree it should've been included, as it gives context.  The current title implies that GM has announced definitively that they're also exiting the car business.


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#6 OFFLINE   Fgts

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Posted 14 May 2018 - 10:33 AM

Morgan Stanley said it, GM will continue with sedans. Not everyone wants to "off-road" to their office job......

#7 OFFLINE   fuzzymoomoo

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Posted 14 May 2018 - 11:40 AM

Morgan Stanley said it, GM will continue with sedans. Not everyone wants to "off-road" to their office job......

Are you sure every GM brand will carry on with sedans? It might make sense for a brand like Buick to try something different and leave sedans to Chevy and Cadillac.
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#8 OFFLINE   Fgts

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Posted 14 May 2018 - 12:14 PM

Are you sure every GM brand will carry on with sedans? It might make sense for a brand like Buick to try something different and leave sedans to Chevy and Cadillac.


IIRC only Buick cars coming is a rwd coupe/sedan based on a Cadillac, rather it will be a Lacrosse replacement is to be seen, Regal can be easily made with Malibu in the US and Cascada probably gone with Opel. Buick OTOH will be CUV heavy beyond that with some that are EV.

#9 OFFLINE   fuzzymoomoo

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Posted 14 May 2018 - 12:18 PM

IIRC only Buick cars coming is a rwd coupe/sedan based on a Cadillac, rather it will be a Lacrosse replacement is to be seen, Regal can be easily made with Malibu in the US and Cascada probably gone with Opel. Buick OTOH will be CUV heavy beyond that with some that are EV.

Is that going to grow the brand though? Maybe they should try something bold is all Im saying. Buick could use a lift.
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#10 OFFLINE   630land

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Posted 14 May 2018 - 03:13 PM

If import makes start cutting CUV prices, then what?
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#11 OFFLINE   jcartwright99

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Posted 14 May 2018 - 03:39 PM

It's going to be a race to the bottom for sedans. I don't believe the market will dry up but it's definitely shrinking and will be low margin. If the market keeps shrinking, how long till Honda and Toyota say enough is enough? I wonder how many of their customers say, I went in for an Civic/Accord and came out with a CR-V/Pilot for a few dollars extra a month.


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#12 OFFLINE   ice-capades

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Posted 14 May 2018 - 04:53 PM

There will continue to be a market for sedans. The question is the size of the market for future sedan sales and how the sales pie will be split up. Sure, there will continue to be sedan sales erosion as buyers switch to CUV's, SUV's, etc. but there's also a good number of customers that won't make that switch and continue to demand sedans. With Ford's announcement along with FCA's remaining cars which are basically vehicles targeting a specific niche, should GM follow and start discontinuing at least some sedans... the Detroit 3 will surrender another market segment to the imports. The imports will share a larger portion of the smaller sedan market and be able to sell enough volume in order to justify continued sedan development. And the imports will continue to improve their designs to attract buyers. Maybe Ford will succeed with introducing and reinventing the sedans of the future with their so called "white space silhouette" vehicles. Only time will tell. And there's little question now that there's going to be a mass transition to hybrid and BEV powertrains from all the manufacturers. 

 

Anyone remember the days 40 and more years ago when there were few imports sold in the USA and the "Big 3" literally dominated the market? Domestic models were redesigned every three years like clockwork and models had their own design characteristics that established their identity. The imports continued to improve their quality, made inroads and learned from mistakes that the domestic manufacturers made. Along the way, more customers started to believe that the imports were better quality vehicles and the growing perception became reality. 



#13 OFFLINE   ehaase

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Posted 14 May 2018 - 06:57 PM

If import makes start cutting CUV prices, then what?

 

I do wonder if EcoSport, Escape, and Edge (as well as the Jeep Renegade, Compass, and Cherokee) will be in the same position 5 to 10 years from now as the Fiesta, Focus, and Fusion are today (and Dart and 200 were 2 years ago). 

 

Regarding GM, Malibu and Cruze debuted for 2016 so I would expect them to last a few years longer than Focus and Fusion, but whether GM designs replacements is another story. 



#14 OFFLINE   jcartwright99

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Posted 14 May 2018 - 10:36 PM

There will continue to be a market for sedans. The question is the size of the market for future sedan sales and how the sales pie will be split up. Sure, there will continue to be sedan sales erosion as buyers switch to CUV's, SUV's, etc. but there's also a good number of customers that won't make that switch and continue to demand sedans. With Ford's announcement along with FCA's remaining cars which are basically vehicles targeting a specific niche, should GM follow and start discontinuing at least some sedans... the Detroit 3 will surrender another market segment to the imports. The imports will share a larger portion of the smaller sedan market and be able to sell enough volume in order to justify continued sedan development. And the imports will continue to improve their designs to attract buyers. Maybe Ford will succeed with introducing and reinventing the sedans of the future with their so called "white space silhouette" vehicles. Only time will tell. And there's little question now that there's going to be a mass transition to hybrid and BEV powertrains from all the manufacturers. 

 

Anyone remember the days 40 and more years ago when there were few imports sold in the USA and the "Big 3" literally dominated the market? Domestic models were redesigned every three years like clockwork and models had their own design characteristics that established their identity. The imports continued to improve their quality, made inroads and learned from mistakes that the domestic manufacturers made. Along the way, more customers started to believe that the imports were better quality vehicles and the growing perception became reality. 

 

Excuse me!!!! I don't want to burst your bubble but US car manufactures were producing pretty crappy cars quality wise in 70's, 80's and 90's (they started trying then). I hate to be the one to break that to you. It wasn't perceived quality difference, it was an absolute quality difference. The first step is admitting you had a problem and that's what happened in the 90's. While I believe most basic quality and engineering has been solved for Ford (ie, any car maintained should be able to make it to at least 150k without a major breakdown/repair), Ford seems to still lack in the fit and finish category.


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#15 OFFLINE   ice-capades

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Posted 15 May 2018 - 03:34 AM

 

Excuse me!!!! I don't want to burst your bubble but US car manufactures were producing pretty crappy cars quality wise in 70's, 80's and 90's (they started trying then). I hate to be the one to break that to you. It wasn't perceived quality difference, it was an absolute quality difference. The first step is admitting you had a problem and that's what happened in the 90's. While I believe most basic quality and engineering has been solved for Ford (ie, any car maintained should be able to make it to at least 150k without a major breakdown/repair), Ford seems to still lack in the fit and finish category.

 

No problem as there's no bubble to burst. Back in the day you had to trade every three or four years for the simple reason that cars didn't last any longer! The early imports may have been better quality than the domestics at the time but I wouldn't say it was absolute, that's just my opinion. The engineering improvements have developed at different cycles for many manufacturers. The early Hyundai's were horrible and used to catch fire just sitting on the lots but they've come a long way since then. As for fit and finish, Ford's Mustangs are typically poor.  


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#16 OFFLINE   fordtech1

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Posted 15 May 2018 - 04:45 AM

As for fit and finish, Ford's Mustangs are typically poor.  


You still think that? The 94-04 were pretty bad. 05-14 I thought were pretty good overall, 15+ I havent noticed many issues. Well at least I havent had to adjust doors and hoods to try and make them look like they fit. Unlike the 94-04s in which was a constant complaint.

#17 OFFLINE   blwnsmoke

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Posted 15 May 2018 - 11:26 AM

That's the title of the news at the GM Authority. Don't be dramatic

Dramatic? Your thread specifically left out the title stating it was a 3rd party outside of GM stating this and it is also just their opinion. So when you read GM will back out of passenger cars, you would expect an announcement from GM when you click the link.

Your link specifically says Morgsn Stanley at the top of the article.

So no, not dramatic but definitely misleading. That article is pretty much worthless coming from a 3rd party opinion. You or I could have said the same thing and it is not news article worthy.

Edited by blwnsmoke, 15 May 2018 - 11:26 AM.


#18 OFFLINE   silvrsvt

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Posted 17 May 2018 - 11:21 AM

 

No problem as there's no bubble to burst. Back in the day you had to trade every three or four years for the simple reason that cars didn't last any longer! The early imports may have been better quality than the domestics at the time but I wouldn't say it was absolute, that's just my opinion. The engineering improvements have developed at different cycles for many manufacturers. The early Hyundai's were horrible and used to catch fire just sitting on the lots but they've come a long way since then. As for fit and finish, Ford's Mustangs are typically poor.  

 

 

IMO I think imports are overrated-its the confirmation bias at work-I bought this brand because I had a problem with a Ford, GM, whatever and when that brand has an issue, they discount it.

 

In my 25 years or so of owning cars, I've only had one real stinker of a car-it was my 2002 SVT Focus. All my other cars have been trouble free for the most part (outside of recalls or common problems that I could take care of myself) and the fit and finish decent to pretty good. 


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#19 OFFLINE   kyle

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Posted 21 May 2018 - 01:34 PM

 
No problem as there's no bubble to burst. Back in the day you had to trade every three or four years for the simple reason that cars didn't last any longer! The early imports may have been better quality than the domestics at the time but I wouldn't say it was absolute, that's just my opinion. The engineering improvements have developed at different cycles for many manufacturers. The early Hyundai's were horrible and used to catch fire just sitting on the lots but they've come a long way since then. As for fit and finish, Ford's Mustangs are typically poor.  

You guys are both correct and make some good points. I grew up in metro Detroit and remember the strong anti import feelings for anyone not buying domestic. After I got out of Michigan in 82 I was less jaded and definitely think the imports made everyone a better company.

Not sure what the sedan market will look like either in 5-10 years but think it will still be very relevant. I get a comoany car-Passat- for work. They are less expensive to operate and keep on the road than a SUV. That commercial market is huge! And Ford wont convert those fleets into a Escape or a Focus of any meaningful quantities. Talk about opening the doors to your competitors.

Edited by kyle, 21 May 2018 - 01:34 PM.

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#20 OFFLINE   Assimilator

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Posted 21 May 2018 - 03:58 PM

It's not that there isn't a market for sedans and will be for awhile, it will just shrink and remain unprofitable.  Ford is particularly vulnerable to margins because they tend to sell on price first and foremost, that's just their customer base especially in cars.  


Edited by Assimilator, 21 May 2018 - 04:35 PM.









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