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jpd80

GM Sales number December and 2018

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15 hours ago, probowler said:

I still feel like Ford is backwards in their thinking... How about aiming to sell MORE cars for MORE money each?

 

That seems like a much more ambitious and worthy goal than "We'll just make less and charge more". 

 

At some point, you need to chase new customers. Not rely on repeat buyers forever. (An unsustainable strategy when you start cutting costs and cheapening your vehicles)

 

Well of course that’s always the goal, but once the vehicle is on the market there is a natural point at which the mfr can sell the vehicle at a decent profit based on the vehicle’s desirability, supply and the competition.  Trying to go above the natural market demand requires price drops and heavy incentives and/or rental fleet dumping.

 

The only way to grow sales profitably is to make vehicles people want to buy and keep them continuously updated so you get a large body of repeat buyers.  This is how Camry and Accord and full size pickups became market leaders.

 

You don’t start out with limited volume in mind unless you have plant capacity restrictions and you can’t expand.  But you need sustained profitable volume before you invest in new manufacturing facilities.   

 

Where Ford has screwed up is not keeping the product updated and then decontenting.  Once that happens you have to lower production to maintain price margins.

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On 1/6/2019 at 1:26 AM, jpd80 said:

All the Lincolns were up to, could it be a seasonal thing like premium / luxury fleets sales?

Lincoln December sales last year were also down significantly last year from the previous year, so some bounceback was expected:

_________________2016_______2017_______2018

MKZ......................2,650...........2,293............1,874

MKS.......................215................0....................0

Continental...........1,845...........1,216............1,170

MKC......................2,795...........2,504............2,774

MKX/Nautilus.......3,527...........2,976............3,364

MKT........................649.............186................271

Navigator...............1,110..........1,444............2,073

Total......................12,791........10,619.........11,526

Total % (+/-)..........+17.8%.........-17%...........+8.5%

2 hours ago, akirby said:

 

Where Ford has screwed up is not keeping the product updated and then decontenting.  Once that happens you have to lower production to maintain price margins.

I don't get how they can't look at F-series, see the success there with a constantly upgraded/evolving product, and not translate that to the rest of the lineup.  I get there are varying degrees of profitability and resources that can go into different products/projects, but it just seems like there's a disconnect there that nobody has seemed to figure out.

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51 minutes ago, rmc523 said:

I don't get how they can't look at F-series, see the success there with a constantly upgraded/evolving product, and not translate that to the rest of the lineup.  I get there are varying degrees of profitability and resources that can go into different products/projects, but it just seems like there's a disconnect there that nobody has seemed to figure out.

Because there is a huge difference in margins on the product. When the F-150 can be considered the best selling luxury vehicle on the planet going by pricing and I'll assume a good margin on it, its alot harder to translate that to say the Escape that has 5-6 other competadors that have currency/overhead advanatges that it doesn't have. It doesn't help the leadership fucked up things 4-5 years ago too.

 

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6 minutes ago, silvrsvt said:

Because there is a huge difference in margins on the product. When the F-150 can be considered the best selling luxury vehicle on the planet going by pricing and I'll assume a good margin on it, its alot harder to translate that to say the Escape that has 5-6 other competadors that have currency/overhead advanatges that it doesn't have. It doesn't help the leadership fucked up things 4-5 years ago too.

 

Well that's why I said, I know there are varying levels of profit/resources needed, but I think you can still scale it within reason.  They just seem to "squirrel!" (dog from Up reference) when it comes to product.  They'll address one, then abandon it and race to another, etc. etc.

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A big part of it is managers who only think short term (and probably how their incentives are structured).   But it's easy for the F150 program to get the additional resources and avoid cost cutting because it's the top dog cash cow. 

 

The only way to avoid that problem is for Hackett to dictate that other vehicles like Ranger/Bronco, full and mid sized utes, etc. get the same treatment and that they are off limits for extended refreshes and decontenting.   And change the incentive programs accordingly.

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39 minutes ago, akirby said:

The only way to avoid that problem is for Hackett to dictate that other vehicles like Ranger/Bronco, full and mid sized utes, etc. get the same treatment and that they are off limits for extended refreshes and decontenting.   And change the incentive programs accordingly.

Unfortunately, I really don't see that happening until leadership changes 

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7 minutes ago, fuzzymoomoo said:

Unfortunately, I really don't see that happening until leadership changes 

I think the bigger issue short term is they need to divert that capital to these new projects (autonomous cars, BEVs, hybrid integration, new models).  That’s a leadership decision to invest in the future which I think is a good move.  If it means having to delay refreshes then it probably needs to be done.  

But I’m hoping that will change in the next year or so and they can get back to maintaining the current vehicles.

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49 minutes ago, akirby said:

I think the bigger issue short term is they need to divert that capital to these new projects (autonomous cars, BEVs, hybrid integration, new models).  That’s a leadership decision to invest in the future which I think is a good move.  If it means having to delay refreshes then it probably needs to be done.  

But I’m hoping that will change in the next year or so and they can get back to maintaining the current vehicles.

That's pretty much the only decision made during Hackett's tenure so far that I've agreed with, except for the autonomous vehicle stuff. I still don't think we really know the full extent of their plan there. I would also like to see more of the investment into BEV technology diverted to FHEV and PHEV technology (especially the latter) but that's just me. 

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As I've explained before the Autonomous strategy is to build and operate a Transportation as a Service platform that uses the autonomous vehicles to do commercial transport and delivery.  The vehicles are necessary to offer the service but the profit is in the service which is ongoing monthly revenue whereas the vehicle is a one time purchase (or once every X years).

It's like the phone companies subsidizing smart phones to get the monthly service revenue.

So let's say you sell the vehicle for $50K at a 10% margin so you make $5K.   The provider (let's say Dominos) pays you $300/month for the TaaS management service (dispatch, tracking, etc.) per vehicle and you net $250/month in profit.  Over the next 5 years you'll make $15K in profit.  And I'm sure they'll charge more than that.  And that revenue isn't subject to the same downturns as new vehicle sales.

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I think the PHEV investment is basically done with Aviator and Escape debuting this year on new platforms.   That also covers the FHEV development since it's pretty much the same architecture just with a smaller battery and no plug.

Edited by akirby

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31 minutes ago, akirby said:

I think the PHEV investment is basically done with Aviator and Escape debuting this year on new platforms.   That also covers the FHEV development since it's pretty much the same architecture just with a smaller battery and no plug.

So that's it then? No future improvement? That would be disappointing 

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19 minutes ago, fuzzymoomoo said:

So that's it then? No future improvement? That would be disappointing 

 

Not done completely but the bulk of the platform development and testing will be done and that's the part that requires a lot of resources.  Ongoing improvements would be relatively small and probably mostly battery improvements.

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On 1/8/2019 at 7:08 AM, akirby said:

 

Not done completely but the bulk of the platform development and testing will be done and that's the part that requires a lot of resources.  Ongoing improvements would be relatively small and probably mostly battery improvements.

Good call, engineering would all be locked in now, adding bigger or better batteries would be the most they would entertain as a  later option....

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On 1/4/2019 at 4:39 PM, Assimilator said:

Subcompact Utilities:

GM: 182,989

Ford: 54,348

Compact Utilities

GM: 484,869

Ford: 298,469

Midsize Utilities:

GM: 345,394

Ford: 446,898

Fullsize Utilities:

GM: 282,442

Ford: 72,500

That's an old fashioned ass-whuppin'   Rationalize all you want but it is what it is! 

Then there is Toyota and Honda up there as well...

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2 minutes ago, Kev-Mo said:

That's an old fashioned ass-whuppin'   Rationalize all you want but it is what it is! 

Then there is Toyota and Honda up there as well...

They don't care as long as they get the margins they want.... 

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Ford is strongest in midsize utilities with Edge, Explorer, MKX/Nautilus, Flex, MKT, and soon Aviator and Bronco.  GM is strong at both ends of the spectrum but not in the middle.  Ford's balance sheet probably looks very healthy compared to Jeep for example, and probably similar to GM in aggregate.  

I think Ford prioritized the right vehicles. 

 

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Even if GMs margins aren't quite as good as ford, isn't there something to be said about getting more buyers, more customers, and hopefully making mroe people loyal to your brand?

I can see a couple advantages maybe with their strategy.  They just have to keep those customers, and maybe one day they can try to increase their margins as well.

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17 hours ago, Assimilator said:

Ford is strongest in midsize utilities with Edge, Explorer, MKX/Nautilus, Flex, MKT, and soon Aviator and Bronco.  GM is strong at both ends of the spectrum but not in the middle.  Ford's balance sheet probably looks very healthy compared to Jeep for example, and probably similar to GM in aggregate.  

I think Ford prioritized the right vehicles. 

 

Just on Jeep, 1 Jan 2019 Inventory of Wrangler is now over 88,000

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16 hours ago, probowler said:

Even if GMs margins aren't quite as good as ford, isn't there something to be said about getting more buyers, more customers, and hopefully making mroe people loyal to your brand?

I can see a couple advantages maybe with their strategy.  They just have to keep those customers, and maybe one day they can try to increase their margins as well.

GM was the best selling car maker in the US and they still went bankrupt in 2008. 

Just because you make alot of something, doesn't mean you make alot of money off them.

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12 minutes ago, silvrsvt said:

GM was the best selling car maker in the US and they still went bankrupt in 2008. .

Toyota surpassed GM as the #1 automaker in the U.S. before GM went bankrupt in 2009. Main reason GM went bankrupt is the extremely steep decline in sales. In the U.S. alone, GM's sales volume decreased by nearly 3 million vehicles between 1999 and 2009.

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2 minutes ago, rperez817 said:

Toyota surpassed GM as the #1 automaker in the U.S. before GM went bankrupt in 2009. Main reason GM went bankrupt is the extremely steep decline in sales. In the U.S. alone, GM's sales volume decreased by nearly 3 million vehicles between 1999 and 2009.

You don't go bankrupt because sales drop.  You go bankrupt because you can't make a profit and you run out of cash.   Ford and GM both were selling a lot of vehicles but not making enough profit.   Ford made drastic changes before GM did and avoided bankruptcy, but the point remains that just because you sell a lot of vehicles it doesn't mean you're a healthy company.

Ford could boost sales dramatically overnight with additional $5K incentives on every vehicle but they'd be losing money.

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33 minutes ago, akirby said:

You don't go bankrupt because sales drop.  You go bankrupt because you can't make a profit and you run out of cash.   Ford and GM both were selling a lot of vehicles but not making enough profit.   Ford made drastic changes before GM did and avoided bankruptcy, but the point remains that just because you sell a lot of vehicles it doesn't mean you're a healthy company.

Ford could boost sales dramatically overnight with additional $5K incentives on every vehicle but they'd be losing money.

Good points akirby sir. Reason GM and Ford couldn't make a profit in that era was drastic loss of market share in the U.S. combined with low quality sales. Too many junky products, too many sales to fleets, too many sales incentives to retail customers.

GM today is a completely different business, with the right approach that emphasizes good products and high quality sales to retail customers over raw sales growth. Ford is heading in that direction too thanks to Jim Hackett. 

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5 minutes ago, rperez817 said:

Good points akirby sir. Reason GM and Ford couldn't make a profit in that era was drastic loss of market share in the U.S. combined with low quality sales. Too many junky products, too many sales to fleets, too many sales incentives to retail customers.

GM today is a completely different business, with the right approach that emphasizes good products and high quality sales to retail customers over raw sales growth. Ford is heading in that direction too thanks to Jim Hackett. 

They only had a few products producing profits and subsidizing all the others and they both had too much overhead.  When sales dropped on their cash cows it put them into the red.   If all those other vehicles were at least break even they wouldn't have been in such dire straights.  They weren't willing to cut production or cancel unprofitable models.

 

GM still has too many similar vehicles and too many brands.  They're surviving now thanks to truck and suv sales.  They still have too much overhead.  If truck and suv sales drop they'll be hurting once again.  They are in a lot better shape than before but don't kid yourself that they've completely changed.

Ford has done a much better job reducing overhead but they've also given up some sales in the process by not keeping products updated and not bringing out new vehicles sooner. 

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45 minutes ago, akirby said:

GM still has too many similar vehicles and too many brands.  They're surviving now thanks to truck and suv sales.  They still have too much overhead.  If truck and suv sales drop they'll be hurting once again.  They are in a lot better shape than before but don't kid yourself that they've completely changed.

This analyst agrees with you.

https://www.freep.com/story/money/cars/general-motors/2019/01/09/gms-restructuring-plan-bring-more-jobs-cuts-and-marketshare-loss/2507689002/

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