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It's Getting Deep: Auto Maker's Propaganda Machines Continue To Pump Out Bull Crap In An Effort To Bolster Sales!

Agent00J submitted on 09/06/2008 Official AutoSpies Timestamp: 11:49 PM
from: www.autospies.com

[20] user comments | category: Misc News

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It's Getting Deep: Auto Maker's Propaganda Machines Continue To Pump Out Bull Crap In An Effort To Bolster Sales!

It seems like everyday that goes on, more bad news is pouring forth from some sector of our economy. I awoke this morning to the headline that Fannie Mae and Freddie Mac are about to be taken over by the US Government in a bailout of epic proportion. Earlier this year we saw Bear Stearns collapse and again the government stepped in to try to shore up this failing investment firm.

We all have personally felt the effects of oil this year, and although there seems to be signs of a recovery, uneasiness permeates throughout the marketplace. The auto industry has not been immune to the economic upheaval either, with continued bad news or factory slowdowns or worse, shutdowns an almost weekly news event.

Two different things I read this past week really spurred the thought process on this story, and what really struck me was the overwhelming feeling that the manufacturers really are trying to pull one over on us in a desperate attempt to calm the market. It seems as though a bunch of bull crap is being spewed forth by the manufacturers in an attempt to increase sales and settle unsettled consumers and investors.

The question has been tossed around here from time to time, who will survive and who will succumb to bigger companies or simply slide into extinction. I have a feeling that perhaps we are looking at the manufacturers from the wrong perspective. Call me crazy, but I think the best car companies out there should be able to stomach a downturn with little to no effect on the business other than slower sales because plans were laid out in advance to account for a changing economic situation.

But this is not the case; for the most part everyone is hurting right now. Well, not everyone, Honda is doing pretty good, Hyundai is kicking butt and taking names. But there are a lot of big names that are hurting right now. Yeah, we all know Ford and General Motors, but what about Toyota and BMW. News of a massive write down on off lease vehicles by BMW rippled through the headlines this summer, and Toyota, a once unstoppable force is slowing down in almost every segment of the market as very high double digit percentage point sales and profit losses continue to mount.

So what went wrong and which manufacturer is dishing the most crap?

Let’s look at Toyota and GM. These two colossal automakers are a lot more alike than people want to acknowledge. GM has been the biggest in the world for a long time, and Toyota rapidly sped up and looked like it would overtake GM in sales.

But during the build up to overtake GM, look at what Toyota brought to market. SUV’s and pick-up trucks, the lifeblood of GM is exactly the product mix Toyota was rushing to develop and bring to market. Toyota went as far as to challenge the domestically dominated full size pickup market with the Tundra. Their truck met or surpassed the offerings of both Ford and GM, and with a massive investment in a new factory in Texas, Toyota was positioned to take over yet another segment of the market.

And yet that new factory sits almost idle, as production has been scaled back while current inventory lingers on dealer lots with heavy discounts. It could be argued that in the quest to become the biggest Toyota lost focus on what made them successful.

General Motors on the other hand is lucky to still be in business. With so much bad product for so many years, it truly is a miracle to think that the General survived. With the addition of Bob Lutz however a true car guy was in control, and his passion and understanding of what makes a great car great has led to some world-class product including the CTS and Malibu. But the fact of the matter is GM relied too heavily on truck and SUV’s and simply wasn’t prepared to react to a changing market that almost overnight shunned the large truck and SUV in favor of more efficient transportation.

And therein lies the problem, and hence the propaganda coming from both GM and Toyota. Failure and inability to adjust to rapidly changing market conditions is a quick recipe for disaster.

General Motors is fighting back launching a website of Facts versus Myths. The site is informative, but is it truthful? Perhaps it is my own cynical mind, but I can’t help but feel that I am being conned by a company desperate to survive.

And what about Toyota, AutoSpies.com reported a 99% decrease in profit earlier this year, and with very few new models in the pipeline, the declines are almost guaranteed to continue. While Toyota probably won’t fail, the lean mean machine that once dominated the market is struggling to hold on to market share it fought so hard to obtain. Will a smaller product lineup be the solution to regain momentum, or is chasing General Motors with offerings in every market segment the ideal answer.

And to contrast GM and Toyota, Agent 009 wrote an article a couple months ago praising Honda for their continued success even in a market that was sliding in the wrong direction. Honda has never changed course from its mission of selling fuel-efficient cars. The same cannot be said of GM or Toyota. We know that GM recognizes that if it doesn’t change it will fail, but what about Toyota, will they be able to adjust to a market that changed as quickly as it did.

As I said earlier, the best business is the one that can adjust to a changing market without having the changing market bring it to its knees. Both GM and Toyota are learning a valuable lesson that hopefully makes them stronger on the back end.

How much more of their propaganda will we have to endure before the product can speak for itself? Only time can answer the question.

In the meantime what other companies are you tired of hearing news from that you can’t help but think is simply bull crap? And do you think some car companies will simply close up shop, and if so who?

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EnnNorak - 9/7/2008 8:40:51 AM

-8 Boost

The existing marketing hype and sales practices still make it very difficult for retail customers to do business with the automakers. Advertising is focused on intangible promises instead of providing prospective customers with the facts they need to make an informed decision. Too many dealers are still bent on ripping people off with pricing gimmicks and , in some cases, out and out fraud. One has to spend too much time researching the facts and making sure that one is getting a fair deal.

Ideally, automakers should sell vehicles on the Internet directly to the retail customer with full disclosure about pricing and specifications as well as the exact nature of materials and fasteners used to build the product. The customer could then designate a delivering dealer who would get a nominal commission to cover the administration involved. When I buy a car, I simply look for red flags which I avoid and I then sole source the first dealer that agrees to my "cost plus" terms. I don't do business with people I think are crooks.

The days of relying on style alone are over. Most luxury features from expensive cars have trickled down to affordable cars so they might as well abandon market differentiation based on hyping up one brand over another within the same corporation. Customers want value for their money and many expensive cars no longer deliver on the promise of their brand because they don't deliver much extra value or luxury compared to other much cheaper vehicles built on the same platform.

And, for those auto executives who still believe that the average consumer is ignorant and does not appreciate full technical information, let me tell you that you don't write brochures for the average guy, you write it for the one technical guy in ten who will convince 20 of his buddies to buy your car. The average consumer just looks at the pictures but the techie will read the specs if they are comprehensive and without the bullshit. Of course, some cars have considerably inferior specifications and their corresponding marketing executives are ashamed to fully disclose these specifications accordingly.

reply to this comment

Dutchman - 9/7/2008 10:41:21 AM

+7 Boost

And maybe we should start a line for bread like 70's Moscow. I guess a "for profit market" should not exist in your world. The consumer is now allowed to surf the internet and then decides to purchase not from the vendor that might be closet to home and best suited to handle future issues but instead from the vendor who provides the cheapest sales price. IE "Your Terms". Then, lets say for example its your new car that breaks down and needs some sort of maintenance repair. You go to you local vendor whom you did not buy the product from and then demand the best level of service as if you had bought the product from said vendor. You say "but I paid for a luxury and I should get a luxury experience" but the vendor has not made any money! Zero.

Here is another example because I know everyone hates it when a dealer "Crook" to you makes a profit.

You go on line and buy the cheapest seat you can find on whatever airline offers the lowest fare. Then, when the flight is late, or cancelled or doesn't give you any nuts you go home and get on the same internet to complain about what a horrible experience it was. "The airline crooks" have not made enough to barely stay in business. But you bought direct, did all your research, got a "fair deal" and then received the level of service one is provided when there is no more profit margin.

I don't pay sticker but I don't expect the dealer to make nothing. I don't buy from a dealer in Florida when I live in Texas. I don't want to buy direct from any manufacturer because when something needs attention my local dealer knows who I am, takes great care of me and offers me a level of service I expect not because of the car I drive but because I bought my car from his FOR PROFIT BUSINESS!

zairnaim - 9/7/2008 12:35:30 PM

+5 Boost

EnnNorak in short the world is not set up just to benefit you. There are other people out there who need to make a living. No product from any manufacturer would be perfect by your standards with all the nit picking you do. No company is out there to benefit you unless by doing so it helps them. This is a self centered world get used to it!!!

steve27t - 9/7/2008 3:04:12 PM

0 Boost

EnnNorak and Dutchman.

You are both right !!

But let me make a point. One of our local S. Florida Toyota dealers has a TV ad. where the owner explains that "dealer fees" and other add-ons are not charged at his business, that they are outlawed in many states, but not Florida.

My local BMW/Audi/Porsche dealer is a prime example, they have dealer fees, low jack add ons, vehicle protection packages, all sorts of BS that just piss me off. Most people just accept the BS, these guys are ruthless rip-off merchants. I have been friends with some of the salespeople over the years and they are as bad with them they are with the customers. But when you are the biggest guys in town you can get away with it.

Notjustlex - 9/8/2008 12:53:59 AM

0 Boost

If you are too much of a sissy to find what you like and work a deal I have three words for you "Sticker is quicker"

If you don't want to work a little to get a deal that seems fair to you then just pay sticker and shut up about it.

TurboSpyder - 9/7/2008 10:56:09 AMView My AgentSpace

+2 Boost

These are the "good ol' days" compared to what's coming.

reply to this comment

Lyall - 9/7/2008 2:44:04 PM

0 Boost

As always, the truth sits smack in the middle.
Which is to say, the median between EnnNorak and Dutchman.

reply to this comment

huu76 - 9/7/2008 3:55:05 PM

-2 Boost

00J,
99% drop in profit is true, what you left out was that Toyota's quarterly drop in profit was due to N.America, the rest of their markets saw little impact. Why ruin a good story though.

As for them not having a lineup for market demands. I guess the Corolla/Matrix, Camry and Yaris don't count.

You left out that Toyota hasn't had to offer lease/finance rates below 3.9% like everyone else. Toyota offering to reassign workers to different plants or having them do other work instead of laying them off shows they must be hurting (contract workers don't count since everyone hires them on an as needed basis).

Everybody wants to be in Toyota's shoes right now, on pace to make $9 billion in profit in a bad year and not having to permanently lay off workers.

reply to this comment

Agent00J - 9/7/2008 9:59:48 PMView My AgentSpace

+2 Boost

Huu,

Thanks for the comments and criticism. Local Toyota dealers are offering up to a $5000 discount AND a $5000 gas card to help move inventory right now.

Granted, Toyota is better off than some of the others, however they have grown exponentially, but are they as efficient as they used to be?

Only time will tell, I am just tired of feeling like I am having smoke blown up my ass.

-00J

huu76 - 9/7/2008 3:55:54 PM

-4 Boost

I forgot about the Prius, which sold more than the discounted 3-series.

reply to this comment

JRobUSC - 9/7/2008 10:16:18 PM

+2 Boost

you mean to tell me a $25k vehicle sold more than a $35-60k vehicle? WOW! THAT'S AMAZING!

Seriously, how much was your soul worth when you sold it to Toyota? And your integrity? Was that extra, or did you just throw it in?

gooch - 9/8/2008 11:11:20 AM

+2 Boost

He just threw it in, like a set of floor mats.

doctorproctor - 9/7/2008 8:18:57 PM

+1 Boost

Seriously I've often wondered if auto companies ever pay any attention to public web forums such as this and other auto related websites?....or if they pay any attention at all to the public who are their potential customers instead of relying on marketing analytics, demographics and ad agencies? Seems like auto manufacturers have their head in the sand when it comes to giving the public what they need. North American manufacturers just keep spitting out SUV's and Crossovers of every variety with little innovation in the areas of fuel economy, style or value for the dollar. Whereas many foreign manufacturers seem to be doing a better job of giving the public what they want and need in these areas. Some manufacturers offer the latest 'techie' gadget while others offer 'discounts' to move their metal. I've purchased two new vehicles in the last two years simply based on known quality, known reliability and value for my dollar in comparison to others. Of course there are a whole host of reasons today as to whether or not a particular brand will sell but overlooking the public's demands will certainly spell continued failure.

reply to this comment

rawbux - 9/7/2008 10:41:19 PM

+1 Boost

EnnNorak, you talk about factories being able to buy a car online, how do you road test? Besides there is paper work that has to be signed and legally disclosed and has to be done by a person legally allowed to do that, at ;east that is the law in most states.

reply to this comment

rawbux - 9/7/2008 11:09:51 PM

+3 Boost

PROFIT IS A GOOD THING, OTHERWISE 99% OF THE PEOPLE ON THIS FORUM WOULDN'T HAVE A JOB! DEAL WITH IT PEOPLE!! DON'T ACT LIKE BABIES, NOBODY FORCES YOU TO BUY ANY ADD ONS FOR YOUR NEW CAR!!THEY ARE OPTIONAL!!

reply to this comment

huu76 - 9/8/2008 11:30:29 PM

0 Boost

gooch, jrrob,
Toyota financing will add about 25% to the price of a Prius. Your $25K Prius will actually end up costing $31,000, not far off from the me-too BMW.

00J,
Toyota has a clearance event in Ontario right now to move their '08 Tundras, financing as low as 4.9% (instead of their usual 8.5%). BMW's 0.9% looks a helluva lot more appealing, difference is Toyota isn't desperate to move their cars.

reply to this comment

JRobUSC - 9/9/2008 8:58:05 AM

+1 Boost

BMW BMW BMW BMW BMW BMW BMW BMW... Enough already kid.

Seek therapy for your BMW phobia, or find a Canadian website to stroke Toyota's nuts on and leave the rest of us alone. It's beyond old.

mmeecc - 9/9/2008 4:01:30 PM

+1 Boost

rawbux is right!
Everyone wants everything and pay nothing. And on top of that, they still want the manufacturers to invest billions in R&D.
Are you living in some fantasy world where money just appears magically and everyone works for free?
If it were your company, is that how you would do business? Come on. Don't be such hypocrites....
I'm generalizing, but a LOT of people are like this.

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