Making Cars Americans Want to Buy (Redux)

Yes, you’ve heard the expression, “The Big Three doesn’t make the kinds of cars Americans want to buy.”  They blame the SUV, anything considered a gas guzzler, and blame executives at the domestic automakers for not having enough foresight.

For your review, I’ll cite a few examples.  Here’s a good example from the Democrat Party organ known as the Las Vegas Sun:

Those observers say the best way for the Big Three to compete is to make cars Americans want to buy. Maybe it’s not the workers who are killing Detroit but managers who chose to build Hummers over Honda Civics or Toyota hybrids, creating a new market of minivans and SUVs that were highly profitable for a decade — until gas hit $4 a gallon last summer.

“It’s not that the companies weren’t innovators,” said Gary Burtless, a former Clinton administration economist now a senior scholar at the Brookings Institution. “It’s just that the U.S. is more interested in gas sipping than gas guzzling.”

Here’s one from a surprising source.  The usually conservative CATO institute has allowed a moronic liberal to infiltrate its ranks with the following post:

Detroit’s “Big Three” automakers are struggling. Instead of making cars Americans want to buy, GM, Ford, and Chrysler are clamoring for tens of billions in taxpayer-subsidized government loans. Sadly, these sub-prime borrowers will likely get their cheap money. Both McCain and Obama are backing the bailout, lest the American public be visited with the calamitous extinction of the Pontiac Vibe and Chrysler Sebring.

Or how about my favorite Obama suck-up and liberal dingbat, Campbell Brown from CNN:

1. Americans are finally starting to turn their backs on those 12 mile-per-gallon SUVs.

Yes, it took us long enough, but we are finally starting to get it. I know, gas prices have fallen back into the $2-per-gallon range, but we all remember what it cost to fill up last summer, when gas was $4 per gallon. And we all know those days will come again.

2. Why isn’t Detroit making what we want to buy now?

Where are the hybrids? Where are the batteries? Where are cars that get 70 miles per gallon? For years automakers fought tooth and nail against improving fuel efficiency standards. You say they’re in the pipeline? You say we’ll get 40-mile-per-gallon cars in 2020? Americans need them now.

3. Ignoring the competition.

It has seemed at times like American carmakers think car buyers are so blindly loyal that they will keep coming back — despite the sticker shock — for crummy cars that guzzle gas, fall apart too soon, and cost too much to repair. Lots of other companies have figured out how to build better quality, more fuel-efficient cars, and even do it right here in the United States.

(And, if you’ll remember, I eviscerated Madame Dingbat on these very same comments in a previous post, which you can read here.)

I mean, I’ll ignore the obvious point that these people didn’t get their facts straight about Ford – they didn’t go to Congress for a bailout, and haven’t received a dime in bailout money.  It is clear, however, these people haven’t a frickin’ clue as to what they’re talking about.  The Ford F-150 was the top-selling vehicle in 2008, and three of the top ten vehicles sold in the US were both gas guzzling trucks, and built by domestic automakers.  This is a documented fact.

Gosh, how could they sell so many of these gas guzzlers if Ford doesn’t make the cars Americans want to buy? 

Now, however, it seems the worm has turned.  Maybe you’ve read the following about Toyota recently:

Toyota sees $8.6 billion annual loss

TOKYO (Reuters) – Toyota Motor Corp (7203.T), the world’s biggest automaker, forecast a much bigger-than-expected $8.6 billion annual loss and said it would sell about 1 million fewer vehicles this year, leaving it desperately trying to cut costs in the grip of a severe market downturn.

The global crisis that has battered demand for cars and pushed U.S. rival Chrysler (CBS.UL) into bankruptcy has hit Toyota hard, reversing its rapid expansion into overcapacity almost overnight. Dozens of its factories stand half idle.

The Japanese giant posted its first-ever consolidated operating loss last year after a record profit the year before.

For January-March, Toyota booked a $6.9 billion loss, in line with consensus estimates, and cut its annual dividend nearly 30 percent — the first cut since at least 1994, when it changed its reporting period.

While the entire industry is caught in the slump and seeking to offload cars piled up in stockyards, Toyota has been especially vulnerable due to its exposure to the United States and Japan, where sales have plunged to multi-decade lows.

Even in China, Toyota has bucked the market’s rise with a fall so far this year.

“Toyota’s outlook was worse than I’d expected. The company expects a really tough time for the first six months,” said Naoki Fujiwara, a fund manager at Shinkin Asset Management. “I expect the bottom for the auto industry is the April-June period, followed by a slow recovery.”

Toyota President Katsuaki Watanabe was more downbeat, stopping short of predicting when sales would pick up in major markets, or when the company would return to profitability as it remains saddled with excess capacity.

“Of course the external environment doesn’t help, but we were lacking in the scope and speed of dealing with various problems and issues, and for that I am sorry,” he told a news conference.

For the year to next March, the maker of the Prius hybrid forecast an operating loss of 850 billion yen, more than double the average forecast in a survey of 20 analysts by Thomson Reuters. It sees an annual net loss of 550 billion yen based on the dollar and euro averaging 95 yen and 125 yen.

The bleak forecasts prompted ratings agency Standard & Poor’s to downgrade Toyota’s long-term debt ratings to AA from AA+, with a negative outlook.


Toyota said it expected its global sales, including units Daihatsu Motor Co (7262.T) and Hino Motors Ltd (7205.T) but excluding cars sold by joint ventures in China, to fall about 14 percent in 2009/10 to 6.5 million vehicles.

Watanabe said that would knock 800 billion yen off the operating level this year, which Toyota aims to offset with cost cuts. The bigger loss forecast this year is otherwise due to a stronger yen, he said.

To return to profit, Toyota must sell more cars or cut costs further, Watanabe said. But he predicted the U.S. market would be around 10 million vehicles industrywide at best this year, down from more than 13 million in 2008.

Toyota is hoping the launch this year of a third-generation Prius will ease some of its sales slide and production cuts, even though it is cutting the price of the popular model to bring it closer to Honda’s new Insight hybrid, meaning its contribution to profits would be smaller than planned.

Toyota may also benefit from the expected introduction of a cash-for-clunkers scheme in Japan.


Toyota is bleeding overhead costs, with about a third of its global assembly lines working on single shifts. It will slash capital spending by more than a third this year to 830 billion yen as it puts expansion projects on hold, but it said it was not thinking of closing any production lines for good.

Toyota reported a January-March net loss of 765.8 billion yen, against a year-ago profit of 316.8 billion yen.

Domestic rival Honda Motor Co (7267.T) last week forecast a small profit for this year thanks to its relatively healthy motorcycle business.

“Compared with Honda, (Toyota) has a lot of larger models and a lot of excess capacity globally,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. “By 2010, cost cutting and capacity reduction may be taking effect, so they could break even then.”

Other big automakers are also struggling.

General Motors Corp (GM.N) on Thursday reported a quarterly net loss of $6 billion and said it burned through more than $10 billion as it relied on a federal bailout to ride out the sharp sales decline.

Japan’s Fuji Heavy Industries Ltd (7270.T), in which Toyota has a 16.5 percent stake, forecast its annual operating loss could balloon to 35 billion yen this year from 5.8 billion yen in 2008/09, citing weak global car sales.

Toyota shares closed down 1.5 percent at 3,980 yen ahead of the results. The stock has risen 39 percent this year, while Tokyo’s transport sub-index (.ITEQP.T) is up 47 percent.

Toyota’s 5-year credit default swap has narrowed to about 151 basis points this week, falling 140 bps from a record peak in mid-March as equity markets have rallied, according to Markit data. 

What happened here?  Toyota seeing huge losses?  How can that be?  Why, Campbell Brown and Will Wilkinson have told us that US automakers suck, and they don’t make cars Americans want to buy?!?

I’m – I’m – I’m flabbergasted!  How could these media geniuses be so wrong?

I guess Toyota is having problems with selling its cars because they too do not make the cars Americans want to buy?  Toyota’s vehicles must suck something awful for them to be in such a bind!  I mean, if we’re going to be consistent, we’ve got to conclude that Toyota’s financial predicament has to do with the slip-shod quality of their vehicles, and the fact that they are not targeting the appropriate market sectors with their foreign little death-boxes.

And then you see this:

Ford outsells Toyota as April sales tumble

Sixth time in seven months that Ford takes retail market share

Associated Press
May 1, 2009

DETROIT – Detroit’s Big Three is becoming Ford and the other two.

While its rivals stay afloat with billions in government aid, Ford grabbed a bigger slice of the American car market in April with record sales of its fuel-efficient Fusion. Those results pushed it past Toyota to retake its post as the nation’s No. 2 car seller.

Even though Ford’s monthly sales tumbled 32 percent from a year earlier, it captured 16 percent of the total market. Most of those gains came at the expense of General Motors and Chrysler, which unlike Ford are dependent on federal help.

Overall U.S. auto sales reported Friday fell 34 percent from a year earlier. Automakers sold about 820,000 light vehicles in April, about 38,000 fewer than in March but still a big improvement over January’s 27-year low.

“It seems we’re bouncing on the bottom of the bathtub, but it’s somewhat stabilized,” Chrysler Vice Chairman Jim Press said in a conference call with journalists. “Maybe we’ve figured out where the bottom is.”

Chrysler, which filed for a government-engineered bankruptcy Thursday, reported the sharpest decline among major automakers, falling 48 percent.

GM, the largest American automaker with 21 percent of the market, posted its smallest decline in four months at 34 percent.

Ford sold a record number of Fusions — 18,321 — with the unveiling of its 2010 gas and hybrid versions of the car.

“Fusion appears to have broken the hold on the midsize sedan segment,” said Ken Czubay, Ford’s vice president of sales and marketing. Ford began selling the Fusion in 2005 with its 2006 model.

Toyota Motor Corp., which had overtaken Ford as No. 2 in U.S. sales, fell behind its rival in monthly sales for the first time in months. Ford got a lift from its line of midsize cars that burn less gasoline.

Ford Motor Co. sold 133,979 light vehicles in April, compared with 195,665 for the same month of 2008. The figures exclude sales of heavy and low cab forward trucks. Sales rose from March to April, with Ford selling 2,878 more cars.

“Based on dealer commentary, we believe this was at least partially due to customers shifting to Ford based on concerns about a potential bankruptcy filing at General Motors and Chrysler,” said Brett Hoselton, auto analyst for KeyBanc Capital Markets.

April marked the sixth time in seven months that Ford gained retail market share.

Chrysler lawyers made their first appearance in federal bankruptcy court Friday. GM has a June 1 deadline to restructure or face bankruptcy.

Press attributed the automaker’s April decline to a steep drop in sales to fleet customers. Retail sales fell at a much smaller 39 percent, he said.

He dismissed the notion that fears about the company going into bankruptcy kept consumers away from dealerships.

“Maybe some people have some worries about the longevity of the company,” he said. “Well, heck, now the president of the United States, the U.S. government, is not only going to back our warranties, they’re going to be an investor in forming our new company.”

Still, Chrysler is clinging to just a 9 percent share of the U.S. market, down from about 12 percent a year ago.

Meanwhile, Toyota reported a 42 percent drop in April sales. Toyota, the world’s biggest automaker, was weighed down by declining sales across the board and a 62 percent slide in sales of its Prius hybrid.

The Japanese automaker is phasing out the existing Prius to make way for its 2010 model, which goes on sale in the U.S. in the coming weeks.

Ford’s midsize Fusion model is a viable competitor against Toyota’s popular Camry, with the 2010 models getting praise for quality, safety and fuel economy. More than 40 percent of the 2010 Fusions sold are hybrids that get 41 miles per gallon.

Meanwhile, GM’s car sales fell more sharply than its trucks, a trend that goes against the federal government’s goal to boost sales of smaller, cleaner cars.

Japanese automaker Honda Motor Co. posted a more modest 25 percent drop in sales.

Nissan Motor Co., reported a 38 percent drop in its sales. The No. 3 Japanese automaker saw double-digit sales declines across both its car and truck segments.

Ok, where are the scores of media idiots and auto “experts” touting Ford’s success and Toyota’s abject failure?

Oh wait, I forgot: Toyota going down the drain doesn’t give these people the veiled justification to urinate all over an American company, blame fat-cat executives, absolve union workers, and make illustrations that tout American engineering and ability as being little more than a steaming piece of dog dung on a New York sidewalk.  Were it the other way around, we’d have half the staff at CNN near the point of hyperventilation with their breathless flagellation of American values, ingenuity, and persistence.

Then again, I’ve come to have low expectations of the press in this country.  Subscribership is down across the board.  News outlets are struggling (with the notable exception of Fox News and Rush Limbaugh).  Perhaps places like CNN doesn’t provide the news Americans want to buy?

I won’t hold my breath waiting for a retraction from that idiot media-babe Campbell Brown, the Las Vegas Sun, or Will “Whatshisname.”  It takes just a dim spark of intelligence for an idiot to recognize their own idiocy.  Their pilot light in that area went out a long time ago.

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