Thursday, May 11, 2017

Unsolicited advice for Detroit automakers

Yesterday's  Wall St Journal had a piece on troubles at Ford.  Sales have been going down.  I missed this, but Ford apparently let their last CEO Allan Mulally go a  couple of years ago.  First I had heard.  Mulally got Ford thru Great Depression 2.0 with out declaring bankruptcy like GM and Chrysler did.  Dunno why Ford ever let Mulally go, he was good. 
  Anyhow, here is my advice as to how to make cars and earn money.
1.   Build the best selling car.  Behemoths like the big three (GM, Ford, Chrysler)  cannot survive selling into niche markets.  Look at Corvette.  Highly desirable car, but there just aren't enough guys with Corvette money to feed a Gigantosaurus like GM.  Right now, the volume car is the small four door econobox.  Just take a look around on 128 during rush hour.  Most of the traffic is little econoboxes. Pickup trucks are way fewer, and luxury sedans (Bimmers) even fewer.  If you are one of the big three, you have to build a winning econobox to stay in business. 
2.  Sell the car under one name.  Don't do badge engineering (selling the same car under different names), just changing the badge on the fender.  It confuses the customers, and it dilutes your advertising.  Say you can afford to run 1000 ads.  If 500 of the ads call the car by one name, and 500 ads call the car by the other name,  few customers will remember either name.  More effective, run 1000 ads calling the car by the same name.  More customers will remember that your car even exists, let alone is it desirable. 
3.   Build a car, not a rolling desktop computer.  Customers care about styling, interior fit and finish, price, gas mileage,  handling in snow and rain,  low vibration and low noise at speed, reliability, resale value, and intangibles like a good name, and prestige.  Most of 'em are happy with an FM radio.  Customer's don't like fancy electronic nav systems or voice commanded sound systems, especially when they fail to work.   Besides, really fancy electronic doo-dads are too expensive to leave in the car.  Customers like to take their electronics with them.  Just offer an audio plug that lets the Ipod play back thru the cars speakers, and maybe some power receptacles.
3.  A good name for a car is worth a lot of sales.  The easiest way to make a name good is keep on using it.  Don't do the Datsun-Nissan hari-kari.  GM has a closet full of good old names that it doesn't use anymore.  Pontiac, Oldsmobile, Impala, Roadmaster and more.  Why they ever named a car Beretta is beyond me.  Everyone knows Beretta is an Italian handgun, carried by James Bond, before Q sold him on the Walthers PPK. 
4.  Design the dashboard so you can work it at night.   Use some real knobs that you can feel in the dark.  The modern cheapy dash of 100 pushbuttons, all alike, all with labels too small to read without taking off your driving glasses  is a PITA. 
5.  If you  have a car that sells, keep on making it, don't try to change the car into something else.  Witness Cadillac, famous for luxury six passenger boats, which has stopped making boats, and is now trying to sell a four passenger sport sedan going up against Bimmers.  Caddy even has a racing program now.  They aren't doing very well either at the track or in the showroom.  GM would have done better to keep Caddy selling boats and SUVs. and used another name for the sports sedan, Pontiac maybe.

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