Like some readers of my diary know, i came from Europe. Well, i like talk today about the problem with car manufacturers in the United States. Near the city where i born they are some important factories of some important european car manufacturers. I work any time in a top factory of Volkswagen Group (nearly Porsche Group) and that make i know anything about car manufacturers strategies specially about european car manufacturers. I will not talk about secrets, only about so obvious things in this highly competitive market.
When i start to know about US car manufacturers strategies, and about their brands and models, so unknown in Europe, i get few surprised by somethings, and now, when we see the important losses of General Motors, Chrysler and Ford, i understand few better any mistakes in the gestion of these companies last years.
I get surprised for example with the high number of brands what still living, and with the high number of models by brand. When i work in Europe, the factory where i work only make one model for all the world. 250.000-300.000 cars by year of same model, what was make too in more factories until more than 400.000 cars by year of one model. In the United States, they are very few models with a production by year of 150.000 cars. More, in the United States car manufacturers have much brands with productions in this level for all the brand. Brands what are making 200.000-300.000-400.000 cars by year, any of they for only one country. That increase very much the costs, and in time of crisis increase very much the losses.
I get surprised too with american cars fuel consume. Is really high. In Europe they are very few hibryd cars for sale in car dealers today. That is because in Europe the engines of gasoline and gasoil are in same level of consume than hybrid engines for american market. No-one of european car manufacturers have now no-one hybrid model for sale. I like hybrid tecnologies but until now in Europe not are sufficently competitives. In the United States, they are competitives because the level of consume of fuel in current engines is more high than in Europe.
Well like my english is so poor, i will tell with an outline my point about top car manufacturers structure for the global market of cars.
Now, i don't see high future for more than 4 brands by car manufacturer with a strategic position so clear for everyone of they.
FB = First Brand. (>1.500.000 cars and trucks by year)
FLB = First Luxury Brand. (>125.000-150.000 cars by year)
FEMB = First Emerging Markets Brand.
SSGB = Second Strong General Brand. (>1.000.000 cars and trucks by year)
Maybe a strong and sucessful car manufacturer don't have all these four brands, but have more than four can became a problem for the company if don't have correct strategy for each brand. Here is the cause of top car manufacturers don't buy new brands in last years.
1st TOYOTA Losses in 2008
FB = Toyota
FLB = Lexus
FEMB = Daihatsu
SSGB = -----
Scion
Hino, is a trucks brand.
Scion, an experimental brand with very low production by year, can be the weak brand.
2nd GENERAL MOTORS Very high Losses in 2008
FB = Chevrolet
FLB = Cadillac
FEMB = Wulling
SSGB = Opel
GMC
Buick
Pontiac
Saturn
Vauxhall
Holden
Daewoo
Saab
Hummer
Well, in the general overview, is obvious General Motors have an unnecessary high number of brands what increase the costs in the company. I understand when tell Pontiac, Saturn, Saab or Hummer must be sold or closed like car brand, other think are the factories and the workers. A good factory can let make cars for a brand, and make in the future cars for another better brand. I think in General Motors are more brand what can be closed, but im surprised because i don't hear about they (Vauxhall, Holden or Daewoo).
The "SSGB" brand in this group, Opel, can be sold for improve the company. I think that can be rigth. And german cars manufacturers like Daimler or BMW are good candidates for this sale.
3rd PORSCHE Only Seat let small losses in 2008
FB = Volkswagen
FLB = Audi
FEMB = Skoda
SSGB = -----
Seat
Porsche
Bentley
Lamborghini
Bugatti
MAN and Scania are trucks brands.
Porsche, Bentley and Lamborghini are highly exclusive luxury brands, what can survive without competitive oposition of new car manufacturers from emerging countries like China or India. In this group Seat is the weak brand because have low level of production (381.000 cars in 2008). Bugatti is a highly exclusive luxury brand but is in risk because is not consolidated.
4th FORD High losses in 2008
FB = Ford
FLB = Volvo
FEMB = Troller ??
SSGB = -----
Mercury
Lincoln
For me Ford company have a so good structure of brands for global market. I think Ford must have a brand for emerging markets, a brand with lower level of pices than Ford for high sales in emerging countries. Until now, seems can be Troller brazilian brand buyed in 2007.
http://news.bbc.co.uk/...
http://en.wikipedia.org/...
http://www.troller.com.br/...
I think the bigger problem of Ford is have very much models in Ford and Volvo brands with low production. Why 3 SUVs Volvo?. Lincoln can survive like luxury brand, but make with Lincoln a global luxury brand require high investments, and Volvo is well know in all the world like luxury brand. I think sale Volvo can be a strategic mistake. If Ford need money fast, is better sell the 13,4% of Mazda. Mercury seems the weak brand in this group
5th RENAULT-NISSAN Only Nissan-Infiniti let small losses in 2008
FB = Nissan
FLB = Infiniti
FEMB = Dacia
SSGB = Renault
Samsung
The alliance make a good work for make up Nissan in last years, and get with possitive numbers in 2008. The alliance have a so good structure of brands. Samsung is a brand for emerging markets what don't have the same problems what other brands.
6th FIAT If Fiat and Chrysler joint ways. Only Chrysler let (very high) losses in 2008.
FB = Fiat
FLB = -----
FEMB = Zastava ??
SSGB = Dodge
Chrysler
Jeep
Alfa Romeo
Lancia
Abarth
Ferrari
Maserati
Iveco is a trucks brand.
Fiat buy in 2008 Zastava with their assembly factory. Maybe Zastava became finally the brand for emerging markets. Ferrari and Maserati can survive like highly exclusive luxury brands, but this group will have the same problem of General Motors with the number of brands. Maybe the new group start with losses. Fiat have good numbers now, but is not the more secure car manufacturer from Europe.
The group dont have a luxury brand with high production.
Chrysler don't have sufficent scale economies with their models. Very few come to 100.000 cars by year. They are very much models with low production.
7th HYUNDAI-KIA
FB = Hyundai
FLB = Genesis ??
FEMB = (Hy)
SSGB = Kia
All the group came from an emerging country, for that Hyundai and Kia are brand too for emerging markets. Hyundai was thinking in create a luxury brand like Lexus, Acura or Infiniti. The name of this new brand can be Genesis. Hard work for Hyundai make a new global luxury brand with high production. Japanese car manufacturers start more than 20 years before.
8th HONDA
FB = Honda
FLB = Acura
FEMB = -----
SSGB = -----
The logical steps for Honda would be make Acura a global brand and find a new brand for emerging markets. Sure they are looking for it. The structure of brand of Honda is complementary to the structure of brand of Suzuki. A merge between this two japanese car manufacturers can be an intelligent step for they.
9th PSA Small losses in 2008
FB = Peugeot
FLB = -----
FEMB = -----
SSGB = Citroën
The logical step for PSA french group would be a merge with BMW (they are rumors) or with Daimler, finding a high production luxury brand (here FLB). The group cand find too a new brand for emerging markets with a buy or a new brand.
10th SUZUKI
FB = Suzuki
FLB = -----
FEMB = Maruti
SSGB = -----
Maybe Suzuki find a high production luxury brand. The structure of brands of Suzuki is complementary with the structure of Honda, Daimler or BMW.
11th DAIMLER Only losses from the 19,9% of Chrysler in 2008, and maybe from Smart too.
FB = -----
FLB = Mercedes Benz
FEMB = -----
SSGB = -----
Smart
Maybach
Mercedes AMG
Freightliner, Fuso, Orion, Setra, Sterling, Thomas Built and Western Star are trucks and bus brands.
Maybach and Mercedes AMG are highly exclusive luxury brands, what can survive. Smart, with long time losses in first years is the weak brand in this group.
Daimler have now a 19,9% of Chrysler, a source of losses for they. I think Daimler can be interested in Opel if can let Chrysler.
Without Chrysler, the structure of brand of Daimler get complementary with the structure of PSA and Suzuki groups. Daimler can be too a good buyer for Opel.
12th BMW
FB = -----
FLB = BMW
FEMB = -----
SSGB = -----
Mini
Rolls Royce
Rolls Royce is too a highly exclusive luxury brand. Mini with their little car have good results. Is a brand with low production but they have only one model.
BMW is a candidate for a merge since long time (PSA sound). PSA and Suzuki have a complementary structure with this german car manufacturer. BMW would be a good candidate too for buy Opel.
Here end this outline about the top car manufacturers brand structure. I hope get easy for understand.
Like we can see the majority of brands in risk in all top car manufacturers get in GM, Fiat and Ford. In other groups only Scion, Seat, Smart and Mini can be in same risk in the future. Scion is an experimental brand with very low production what can close tomorrow if Toyota need, and Smart and Mini will be brands with only one model for not losse scale economies.
From american cars manufacturers i think Ford, Chevrolet, Volvo (Swe), Cadillac, Wulling (Chi), Troller? (Bra), Opel (Ger) and Dodge have good conditions for have a good future in the competitive global market. Surely with Opel out of General Motors. I think is rigth the sale of Opel (but not the sale of Volvo because is the first luxury brand in the group and the 4th in the world). I think are rights too the last movements of Ford group with their sales of brands (Land Rover, Jaguar, Aston Martin, and a 20,4% of Mazda), or the merge of Chrysler with another car manufacturer group. I think they go for rigth way, specially Ford, but they need make much more for let back current losses.
General Motors, future Fiat-Chrysler, and Ford groups will be in bad economic situation if not low their number of models and their number of brands for find better scale economies and decreases their costs, and increase the efforts in design of the new models. Less models but more effort in design by model, for make attractive and efficient cars. That like tell the groups must have a good brand structure, without strategic mistakes (like the sale of Volvo), but like tell too they must have a better structure of factories with more production by factory. I think the minimum by factory can be 200.000 cars by year and only one or two models by factory excluding luxury brands.
I think brands like GMC, Buick, Pontiac, Saturn, Vauxhall, Holden, Daewoo, Saab, Hummer, Mercury, Lincoln, Chrysler, and Jeep are in true risk in this moment. And italian brands Alfa Romeo, Lancia and Abarth can be too in same risk in next years, not cause a merge with Chrysler, but yes cause of market evolution, when new car manufacturers from emerging countries up. The question is not if any brand will be closed. That is sure, but is sure too not all these brands will be closed. The question is what of this brands can survive long time with correct strategies for minoritary brands. Mini is showing a good strategy for be a minoritary brand and survive without losses. Porsche, and all others highly exclusive luxury brands have another succesful strategy what can be good for luxury brands.
Seems General Motors like continue with GMC, Buick, Vauxhall, Holden and Daewoo. I think they are too much. Seems Ford like continue with Mercury and Lincoln. Mercury seems weak now. And in Fiat-Chrysler merge no-one talk of close brands, they like continue with Chrysler, Jeep, Alfa Romeo, Lancia and Abarth, and all can be too much. The car manufacturers will must find good strategies for these minoritary brands can survive.
Habitually i let a poll in my diaries. Today can be interesting see what minoritary brands in american car manufacturers are more liked and viewed by readers and voters, what of these brands win more support for continue, what of these brands are the bests for the future in a global market with new strong manufacturers from emerging countries.
I think if american car manufacturers need help from american tax payers, americans can talk about the future of this companies and their brands.