Blog For Free!
Archives
Home
2008 December
2008 August
2008 May
2008 April
2008 February
2007 November
2007 April
2007 February
2006 October
2006 June
2006 April
2006 March
2005 December
2005 November
2005 October
2005 September
2005 August
2005 July
2005 June
2005 April
2005 March
2005 February
2005 January
2004 December
2004 October
2004 September
2004 August
2004 July
2004 June
2004 May
2004 April
2004 March
2004 February
2004 January
My Links
Marmot's Hole
Korea Lies...oops, Times
Korea Weather
cathartidae
Goldbrick in Seoul
Rathbone Press
Incestuous Amplification
Budaechigae
tBlog
My Profile
Send tMail
My tFriends
My Images
Sponsored
Blog
|
| Domestic Follies. |
| 11.24.05 (9:30 am) [edit] |
Well, I just finished more than a year working in the "domestic" car business, in the service department. With the greatest mercy, I fell "victim" of the slashing and burning that is all the rage at GM these days. For those GM diehards out there (if there are any reading my blogs) here is some inside info on GM: It is going tits up in a hurry. The reason is simple: they were not selling enough cars. What they do sell is utter crap. They only time they ever sold cars was when there was a major incentive happening and invariably GM lost money on every unit sold. This is not a good way to do business.
Then there is demographics; the vast majority of customers at my GM store were white, working class and had only high school education. They had annual incomes of less than $30,000 a year. More telling is most of them smoked and few had internet connections at home so they did not bother to research their purchase. They could not afford more than a basic car and had trouble getting financing. They did not have the sense to go out and buy a ten year old Honda. Do you realise how much profit a dealer sees from say, an Aveo? About $300,that is how much.
At least half were senior citizens who were probably driving their last car. Look at demographics in Canada and the USA; at least 40% of people are non-Caucasian. Do you see minorities buying GM cars? No, you don't. GM has failed to see changes in market conditions and adapt their products likewise. This city is 50% Asian and they drive Hondas and Toyotas, which they correctly see as being better value than GM cars. Ignoring the ethnic
Asian market has been a huge mistake for GM and the other domestics, too.
Then there is product. GM built the J-car, the Cavalier and Sunfire, basically unchanged since 1981, twenty four years! The bread and butter of the auto industry is building brand loyalty from first time buyers. If they
are satisfied with the product and dealer service, they will continue to buy the brand. GM stuck with the same, worn-out designs for far too long causing new generations of buyers to move to other brand they correctly saw as being more innovative and better designed.
I do not buy the "we must lobby Ottawa to open foreign markets" BS from Buzz Hargrove one iota. I was working in Japan the last time Ford and GM got big into this, in 1996. I have some news for you: the cars Toyota and Honda sell in North America are not the same as they sell in Japan. Shit, 81% of Honda and Toyotas sold on Canada are made here anyway....but in non-union plants They did market research and built models to suit the local market. What did GM do? They converted the Cavalier to right hand drive and installed the awful 2.4 litre Quad Four in it. Now, what is wrong with this picture? Well, Japan (and most other countries, too, by the way) taxes cars based on engine displacement. A 2.4 litre motor puts you into semi-luxury status in Japan, meaning taxes of about $5000 per year on a Cavalier. Who in Japan is going to pay that kind of money for a poor design with a rough motor? Not many. Ford did even worse with a 3.8 litre Taurus, which is in $10,000 per year taxes. The Japanese pay exactly the same taxes on locally produced cars. If GM actually made a
product that a Japanese consumer wanted, they might sell some there.
Then there is GM quality, or lack thereof; do you know that every GM 60 degree V-6 made in the last ten years has an intake manifold gasket designed to fail immediately after the warranty expires? It is $1000 to fix it at a GM shop. How about the North Star? Well, it has a two piece block that guarantees oil leaks after three years. How about electrics? All Japanese
and Daimler-Chrysler cars have digital electrics. A simple scan can find electrical problems in these cars but not GM; their architecture is at least fifteen years old. Just finding the fault takes time, that after 60,000 km you pay for, assuming a GM mechanic can ever find it.
I once had a customer, deeply in debt for an SUV that GM discounted on him a week after he bought it. It was now worth less than the loan on it. GM cars are designed to self destruct at the end of their warranty, which is 36 months or 60,000 km, whatever comes first. At 60,001 the car will start to fall apart. This guy, a construction type stated to me "It is like the thing was designed to fall apart after the warranty expired. I guess I am just unlucky." I could not tell him the truth; he was 100% correct.
So there you have it. GM has a tired product line, an aging customer base and poor quality. It has taken its customers for granted for too long and is now paying the price.
|
|
|
| |
posted by: party pooper (reply)
post date: 11.26.05 (6:04 pm)
We need more car companies like GM to encourage people to drive less and start using public transportation. We got to think about the environment.
posted by: kimchipig (reply)
post date: 11.27.05 (7:16 am)
What we need is more civic minded politicians to drive to city hall so they can tell us to ride the bus.
posted by: angus (reply)
post date: 12.23.05 (12:27 am)
k-pig
good to see you back in business.
as for my own experience with japanese. my first rice burner was a '80 civic. paid $300 for it, drove it five years and took it through three seasons of tree planting in b.c., alberta and sk. most expensive thing i ever did to it was put plates and insurance on it. everyone in my family laughed at me, as did a number of my friends. that is until recently. my sister just bought a new honda civic and loves it. after 10 years of driving pontiacs and chevies that spent as much time in the shop as in the drive way. funny thing is, one of my old buddies who has a forestry contracting company in northern sk, just ditched the last of his chevy trucks. drives nothing but toyotas now.
posted by: kimchipig (reply)
post date: 12.23.05 (2:09 pm)
Great to see you are still reading, Angus. I worked at a Chrysler shop before I worked for Garbage Motors. The owner's sister had a 1992 Eagle Summit for sale. It is a Mitsubishi Colt in disguise. I have been driving it for a year and have yet to do a repair on it. It has 140,000 km on it. That is half life (or less) for a Japanese car and the end of the line for an American car.
|
|
