Competitive Connection

October 29, 2007

 What others are saying . . .
Green is a business reality
Carmakers around the world are trying to convince consumers that their lineups come in green. The push — involving hybrid-electric cars, diesel-powered cars, flexible-fuel models and vehicles that run on hydrogen — is setting off the same kind of competitive frenzy that has always surrounded the development of sports cars and sport-utility vehicles.

There is “a new DNA for the automobile,” said Lawrence D. Burns, vice president for research and development and strategic planning at General Motors. GM will roll out a hybrid version of a vehicle in its lineup every quarter for the next four years, 16 in all.

 “For pure, raw business reasons, we’ve got to solve this problem because we want to continue to grow,” said Burns

Mr. Burns predicts that hybrid-electric vehicles, coupled with flexible-fuel models, could account for as much as 80 percent of the cars and trucks sold in the United States by 2030, once scientists fully develop alternatives to gasoline that consumers will willingly buy. —Source: New York Times, October 24, 2007
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Then and Now
Japan market slows
Whatever initially drove Japan's automakers to become the world's most successful exporters, they now have even more urgent reasons to sell beyond their borders: Their own domestic market is withering.

For many years, Japan had the world's largest proportion of elderly citizens and one of the smallest birth rates. Then, in 2005, its population began to decline for the first time since records were compiled in 1899.  If the trend persists, the government predicts Japan's population will shrink by a third within 50 years, to fewer than 90 million inhabitants.

Japan is still the world's second-largest passenger car market, and third-largest in total vehicle sales after the United States and China. The Japanese market is important for Toyota, which has a dominant 42 percent share. But it's not as important as the U.S. market to Toyota's bottom line. Honda, Japan's second-largest automaker, generates fewer than a fourth of its global vehicle sales in Japan.—Source: The Detroit News, October 22
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What others are saying . . .
New Malibu may change opinions of GM
The new Chevrolet Malibu, which begins arriving at dealers toward the end of this month, is a car GM is praying will be discussed favorably by consumers in the same breath as the Honda Accord and Toyota Camry, the acknowledged benchmarks in the category.

``It's astonishingly good,'' said Eric Noble, president of The CarLab in Orange, California, which does engineering analyses of vehicle tear-downs. ``And I've been quite open in the past about my negative views of GM vehicles. When Honda and Toyota see this car they'll have to start putting back some of the content they've been taking out to economize.''

Csaba Csere, editor of Car and Driver magazine, who has bashed GM models in the past, says the new Malibu ``drives beautifully.'' Csere said Malibu's 2.4-liter, four-cylinder engine is smoother and quieter than the comparable Honda engine.

Even if Malibu proves it has matched Accord and Camry in terms of quality and appeal, GM knows it will have to work hard to overcome the doubts of many U.S. consumers who have written off its vehicles.

Mass defection of customers from top Japanese automotive brands to Chevrolet is unlikely. Initially, if GM can intercept shoppers considering sedans such as the Hyundai Sonata, Mazda6 or Ford Fusion the automaker will have done well. –Source: Bloomberg, October 18, 2007
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Around the globe
Emerging markets key to growth
General Motors outsold Toyota in the first nine months of the year, buoyed by sales outside the U.S., in the battle to extend its 76-year reign as the world's largest carmaker.

Toyota's sales in the U.S., its largest overseas market, dropped each month of the third quarter, the longest stretch of declines since 1995. Detroit-based GM won customers in Brazil, Russia and China, boosting sales by 4 percent in the quarter.

“Both companies face mature home markets and have to look to emerging markets for growth,” said Koichi Ogawa, Daiwa SB Investments Ltd. in Tokyo. –Source: Bloomberg, October 22, 2007
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