Dumb Moves By The Auto Industry

There have been times over the past several decades when it seemed that General Motors had a monopoly on dumb moves. Not just now. I say that not just because its North American market share seems to have touched bottom at 23.5% in the first half of the year, moving up since. The main reason GM looks comparatively intelligent these days is not merely that its cars and trucks are greatly improved, but that its competitors are making some very unintelligent decisions. Three that come to mind involve Ford, some Japanese firms and Chrysler.Ford Motor (nyse: F – news – people ) has made clear that it will create a look or design theme for all its cars around the world. So when a fellow from Manchuria sees an American Ford or a German Ford, he can say, even in Manchurian, “That’s a Ford.” If an American traveling in Manchuria sees a Chinese Ford, he can say, “That’s a Ford.”This is not a simple exercise, like putting the same label on soda cans. We’re talking about battles among designers, the retooling of factories and the spending of hundreds of millions, maybe billions, of dollars over time to do it. News source: Forbes And why? Is that Manchurian going to be more likely to buy a Ford if he sees a German Ford with a similar grille? Is even one American more likely to buy a Ford if, when touring in China, he sees the same grille? We used to believe that it was better that foreigners, like the Germans, didn’t know that one of their auto companies was owned by outsiders, meaning us Americans.Some luxury cars do have a universal look, for example the Mercedes and the BMW. But those are German cars, not global cars meant to fit every national taste. The German attitude is: “This is German. If you like it, fine; if you don’t, you are too dumb to know better.” That’s not the American approach.Now every Ford carries the name “Ford,” so the fellow from Manchuria will know an American Ford when he sees the name. But there’s no reason to think the design that pleases him will please me. In fact, more often than not, Ford’s European designs don’t please Americans. I can go through a half-century of Ford flops, such as the Contour and Mystique, which were European-designed Fords built in America, and the Merkur and Scorpio, European Fords imported here. Even the Focus, the smallest Ford built here, came from a European design and is disappointing.It would be wiser to spend the time and money creating designs that fit each market. Yes, this costs more in design, tooling and parts. But how much is saved by losing customers who don’t like the global look?Also a good nominee for a Bad Idea Award: building a new car plant with new workers and having them build a completely new design. That’s asking for trouble. Still, that is what Nissan (nasdaq: NSANY – news – people ) did in Mississippi and Toyota (nyse: TM – news – people ) did in Texas. Sure enough, they have had trouble: Even Consumer Reports panned some of the new Toyota trucks from Texas. Wouldn’t it be better to build a brand-new vehicle in an older plant, with experienced workers, and build a car you know how to build in a new plant? The cost to the Toyota and Nissan reputations has been terrible.Lastly, my list of bad moves includes a plan by Chrysler Corp. to combine its Chrysler, Dodge and Jeep nameplates under one showroom. If you have a Chrysler dealer that sells 1,000 cars a year and a Dodge dealer that sells 1,000 cars a year and a Jeep dealer that sells 500, and you put them all under one roof, you don’t get 2,500 sales. You get maybe 1,800.Why? There usually are physical limits on how many cars may be sold and serviced in one location, for one thing.Second, put them together and you have 25 different vehicles. Go find a sales person who can really know so many. Worse, some of these vehicles are mechanically similar–the Jeep Liberty and Dodge Nitro, both sport utilities; the Chrysler Sebring and Dodge Avenger, both sedans.You’ll note that Chrysler has started cutting vehicles, including some good ones like the Dodge Magnum, a sleek, low-slung station wagon. They have their problems, but I would say inept marketing was the real issue. If Chrysler kills too many products, it won’t have much to sell.Lest I be accused of being a sourpuss, here’s my good-news prediction:Next year will be better for the industry than this year, maybe 10% above 2007’s expected 16.1 million vehicle sales. Despite the troubled housing market, credit problems and Fuel prices, low unemployment and fairly low interest rates will keep buyers coming out. And General Motors (nyse: GM – news – people ) will continue its turnaround.