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Sedans Luxury Lounge
21519 messages, Last post on Dec 07, 2009 at 6:26 PM
You are in the Sedans Forum. Your Hosts are pat & karens
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This report likens the year Toyota just had to a baseball team winning 150 out of 162 games. http://www.nytimes.com/2007/02/18/magazine/18Toyota.t.html?_r=1&ref=magazine&ore- - f=slogin Interesting tidbit from the story re hybrids: Indeed, Toyota created its hybrid systems not so much with the current era in mind, but because it views hybrids as more practical and energy-efficient. Whether the future is in biodiesel, ethanol or hydrogen doesn’t seem to matter; the hybrid system could be adapted to any of those fuels, says Bill Reinert, Toyota’s U.S. engineer in charge of advanced vehicle planning. Reinert also told me that the current Toyota system already has the ability to accommodate the larger battery capacity of a plug-in hybrid, which would use electric power for local trips and fuel only for longer excursions. But those large batteries don’t yet exist. Was that extra capacity put there on purpose? “Hell, yes,” he says. “This company is not stupid.” |
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From today's NY Times: http://www.nytimes.com/2007/02/20/business/20chrysler.html?ref=business I think this exerpt from the story indicates the LT risk most enthusiasts don't see or don't want to see. And Daimler minus Chrysler would face the same long-term questions about its viability in the global auto industry as other medium-size, stand-alone competitors, like its German luxury rival, BMW. “As a carmaker, Daimler would become the smallest of the stand-alone operators in Germany, given that Porsche is likely to do something with Volkswagen,” Mr. Rhys said. “BMW has survived, but because of the rip-roaring success of the Mini, which Daimler doesn’t have.” In any case, Mr. Zetsche has not given up hope of fixing Chrysler, which he ran from 2000 to 2005, said a former senior DaimlerChrysler executive. It's a pure business issue - stay small and eventually get absorbed by a giant in the long term (as Europe will not be able to keep takeovers from happening too much longer) or play with the giants right now. The BMW comment is very telling. No matter how you slice it in the long run a lux maker without a broader universe of everyday cars to sell is not going to hold on or stay profitable/cash positive if it does; not with the future huge investment requirements and the need to spread those investments costs among many millions of cars sold annually in what will be a very rough competitive market. Pure ROI story. The fewer cars you sell the longer it takes to recover your investment, if ever, not to mention the additional investments that will be needed on top of it to keep up with the Jonesses in a fuel power switching world. It's a very different automotive world than 30 years ago.
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Replying to: ljflx (Feb 20, 2007 6:38 am) What kind of risk, investing? I buy that. But I think enthusiasts treat their portfolios and car purchases differently. With regard to BMW, is Mini going away? Should Toyota be discredited for Scion? Also consider BMW's platform expansion in the last half dozen years or so. They have been expanding and producing cars to full capacity and selling them. I don't think anyone will deny the juggernaut that Toyota is, but I don't think for one minute that they are invulnerable to problems. Care to call them unsinkable, put the ranch on them? Just for the sake of argument, what would happen to Toyota's sales and stock if it got caught up in something like Audi experienced with the acceleration issue years ago? On another note, I think you are a little too optimistic about hybrid, not that a failure here would affect Toyota much. I am certainly not predicting its failure but I think alternate energy tech is so unsettled at this point. Is it kind of like the Syquest, Jazz and Zip drives we used to use? Just wondering. As always, I enjoy your insight and opinions. I don't always agree with you but I like when you roll those tea leaves. 
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Replying to: designman (Feb 20, 2007 12:53 pm) Dman - that's not my assessment, that's a quote from the byline story. I happen to agree with it though - at least in the long-term. My belief is that the technology development costs in a fuel changing world in the future are going to be huge. If you don't have a large base of cars sold annually to spread them around to you'll be in trouble. The reason I link the enthusiast in is that many of those folks want car companies to stay pure (witness already the Porsche backlash) and IMO in the future that will not be possible. This isn't about the cars it's about the business itself. Like all businesses that face huge development costs this will give the industry giants a large advantage over niche players. I don't think for a second Dieter wants to unload Chrysler - I think instead he's reacting to pressure. If he does it, it will be S/T smart and L/T dumb. That's my read.
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Replying to: designman (Feb 20, 2007 12:53 pm) BMW's problem is their size and their vulnerable product range. Right now, with the Global economy humming they are successful. People are willing to pay for their product. However, an economic downturn would be devastating. Daimler-Benz is(was) a conglomerate. In addition to Mercedes car they have Mercedes Truck, Messerschmitt, a good chunk of Deutche Bank, etc. Toyota's sheer size and product range help shield them from economic upheaval. Even when the product isn't as good. Right now, Toyota is recalling more cars than they ever have. The Avalon and Camry have had teething issues that Toyota has never had before. Yet, they keep setting sales records. Audi wasn't guilty of anything, they were just the poster child for Americans not being able to drive. Benz and Bimmer were tarred w/ the same brush, but they had a larger, more loyal owner base.
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Replying to: volvomax (Feb 21, 2007 2:41 pm) The last time I was in England I was amazed at all the (affordable) BMWs that were around but they all had cloth seats, manuals and wind up windows. I do agree that these brands may not have the product range to approach Ford, GM and Toyota in sales volumes but I do not think that adversely impacts their viability. That's like saying Casio will put Rolex out of business. Different scales of production work for different scales of sales. Mind you, if BMW ever mess up the 3-series things could be rough for them.
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Replying to: bristol2 (Feb 22, 2007 1:53 pm) I never said BMW would be put out of business, only that they are vulnerable to market fluctuations, more so than a bigger car co. Remember what happened to BMW in the early 90's?
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Replying to: ljflx (Feb 20, 2007 6:38 am) MB believed during 98 that a lux maker cannot survive without selling everyday cars. That kind of toxic thinking is what lead to the current demise of Daimler Chrysler(selling Chryslers and SMARTs at a hefty loss). And YES a lux maker can thrive without being big . BMW used a GM auto tranny for the 5 series and European Chrysler engines for its first generation MINI . Huge investments are not required in this day and age of automotive outsourcing. BMW’s use of outsourcing ( for developments that are too expensive to develop in-house) is what makes BMW a high ROI story. BMWs joint hybrid endeavors with other auto marques is another example of how BMW can remain small and independent and at the same time pursue expensive drivetrain technologies.
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Replying to: volvomax (Feb 22, 2007 2:18 pm) No I dont remember? BMW was thriving during the late 80s and early 90s. But I do remember the problems Porsche had during the early 90s.
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Replying to: volvomax (Feb 22, 2007 2:18 pm)
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