bigpoppanils Posted August 1 Report Share Posted August 1 Big 3 Losing Money on Each Vehicle Sold Due to IncentivesCanadian Press - July 31, 2003 Motor Trend The Big Three vehicle manufacturers lost on average $180 US per vehicle made in North America during the second quarter, the worst performance by the trio since the third quarter of 2001, says a new industry study. DaimlerChrysler's U.S.-based Chrysler division accounts for most of that average loss due to its $1.1 billion US loss in the quarter, which more than offset narrower profits at General Motors and Ford, Scotiabank auto analyst Carlos Gomes said in a report released Wednesday. However, skyrocketing incentives are contributing to lower profits for each of the U.S.-based manufacturers, Gomes said."Incentive costs at the Big Three have surged by 14 per cent over the past year to roughly $3,800 US per vehicle," Gomes said. "Inducements are now more than double the level of three years ago and show no sign of abating."The Big Three have been relying on steep discounts such as zero per cent interest financing and rebates to lure buyers as they lose market share to import nameplates such as Toyota, Honda and Nissan.Despite soaring incentives, the Big Three's share of the U.S. market fell to a record low of 62.1 per cent in the first half of 2003, down from 63.4 per cent a year earlier and more than 70 per cent as recently as 1999.The discounts are having a bigger effect on Chrysler's returns than those of its two U.S.-based competitors. In May, when it warned of the quarterly loss at Chrysler that was made official a month later, the company said it was forced to cut the value of cars on dealers' lots to reflect the cost of discounts needed to sell them."Car prices have been under pressure in the United States, so they were carrying it at higher levels on their books, and so they restated their books" to reflect the lower values, Gomes said."In this particular (second) quarter, they were the weakest of the three," he said. Chrysler has "sort of shifted back and forth from time to time with Ford, with GM being sort of in the forefront in terms of being consistently profitable."Chrysler's discounting of the value of its inventory is intended as a one-time exercise, and if the U.S. new vehicle market rebounds, the division of the German-U.S. auto giant should improve, Gomes said. "Once we get some sales improvement as we move forwards into the second half of the year, they will probably be in a profitable situation by year end," he said. Economists expect the pace of U.S. economic activity will be bolstered by President George W. Bush's recent tax cuts, boosting household income by $40 billion US in the second half of 2003."Despite sluggish employment conditions - a key driver for vehicle sales - household wealth has started to improve, climbing by five per cent over the past year alongside higher home prices and this year's double-digit gain in equity markets," said Gomes. "Moderately stronger economic growth should lift U.S. vehicle purchases to an average of 16.4 million units in the second half of 2003, from 16 million during the first six months of the year."Car sales will likely strengthen to 16.8 million in 2004, "matching last year's sales pace," Gomes said.Gomes said it's unclear when the Big Three will be able to rid themselves of the incentives that cost them money but have essentially become expected and almost mandatory for many prospective car buyers."At this point, (the Big Three) definitely are stuck with them," Gomes said. "Even though (incentives) have skyrocketed to the point that they have over the past year, they're still continuing to lose market share."If they tried to scale them back, they would obviously be in worse shape."The discounts on new vehicles are also reducing the values of used cars, raising their appeal to consumers, he said.Ongoing cost-cutting by the Big Three is also continuing to pressure auto parts suppliers, he said.Gomes said a sample of U.S. parts makers showed a four per cent year-over-year increase in first-half revenues, but gross profit margins slumped to only 8.3 per cent - the lowest level since the 1990-91 recession and 33 per cent below the average of 1995-99.Turning to overall market conditions, vehicle sales picked up in the United States last month, but purchases in Canada fell to the lowest level in more than two years.U.S. motor vehicle sales strengthened in June to an annualized 16.4 million units from an average of 16 million in May. In contrast, Canadian car and light truck sales fell in June to an annualized 1.48 million units, down from an average of 1.63 million during the previous three months.© The Canadian Press, 2003 Quote Link to comment Share on other sites More sharing options...
joeg Posted August 1 Report Share Posted August 1 i wish chrysler would just quit already... Quote Link to comment Share on other sites More sharing options...
bigpoppanils Posted August 1 Author Report Share Posted August 1 Originally posted by joeg i wish chrysler would just quit already... are you sure? their future lineup looks the most promising out of the big 3.... Quote Link to comment Share on other sites More sharing options...
joeg Posted August 1 Report Share Posted August 1 whos in "the big 3"???and chrysler hasn't made a car worth driving since.... uhhhh.... i don't know if they ever have... Quote Link to comment Share on other sites More sharing options...
Guest jroo Posted August 1 Report Share Posted August 1 Originally posted by joeg whos in "the big 3"???and chrysler hasn't made a car worth driving since.... uhhhh.... i don't know if they ever have... i was in puerto rico sometime in '01 , anyway, over there the neon is badged as a chrysler car, not dodge. Quote Link to comment Share on other sites More sharing options...
bigpoppanils Posted August 1 Author Report Share Posted August 1 Originally posted by joeg whos in "the big 3"???and chrysler hasn't made a car worth driving since.... uhhhh.... i don't know if they ever have... crossfire Quote Link to comment Share on other sites More sharing options...
joeg Posted August 1 Report Share Posted August 1 true... that might be nice...and i guess, technically the "laser" oh so many years ago...theres probably been a few others, too... Quote Link to comment Share on other sites More sharing options...
bklynzzfinest Posted August 5 Report Share Posted August 5 Originally posted by joeg whos in "the big 3"???and chrysler hasn't made a car worth driving since.... uhhhh.... i don't know if they ever have... hey hey.... the Chrysler 300M is a kick ass ride. Quote Link to comment Share on other sites More sharing options...
cintron Posted August 5 Report Share Posted August 5 the Chrysler 300M is the same thing as nearly every other vehicle GM, Chryler and Ford put out.an econobox rental chassis with oversized poofy tires, cheap bouncy struts and no eye towards handling or performance... then they stick a couple of limited edition badges on it, slap a different lip spoiler on and a shiny exhaust tip and call it a "performance sedan."they aren't fooling anybody and i'ts about time they started paying for making such mundane shitmobiles. Quote Link to comment Share on other sites More sharing options...
bigpoppanils Posted August 5 Author Report Share Posted August 5 Originally posted by cintron an econobox rental chassis with oversized poofy tires, cheap bouncy struts and no eye towards handling or performance... then they stick a couple of limited edition badges on it, slap a different lip spoiler on and a shiny exhaust tip and call it a "performance sedan." as much as i like the 300M, cintron has a point. for its power rating (255hp), its acceleration figures are pretty lame. the maxima has better performance figures for the same money. the Special Edition was a step in the right direction though.the upcoming 300C and Magnum on the other hand... Quote Link to comment Share on other sites More sharing options...
joeg Posted August 5 Report Share Posted August 5 for the cost of brand new cars these days, i'd really like to see car companies focus on bringing the "Weight" standard down....start using aluminum, fiberglass, or dare i say it... *gasp* carbonfiber....no "CAR" should weigh more than 3500lbs...anything with the word "sport" "performance" etc... needs to be 2800 or so for 2wd and 3200 or so for AWD...if chevy can keep the corvette at 3000 with a v8 and all the other cool shit that has, i don't think its an unreasonable goal for anything else in that pricerange or higher....carmakers seem to be getting back to the 'old' style of making cars... where they just made massive boxes of metal and used higher output (heavier) engines to compensate....thats ASSHOLE ENGINEERING, IMO... Quote Link to comment Share on other sites More sharing options...
bigpoppanils Posted August 5 Author Report Share Posted August 5 Originally posted by joeg for the cost of brand new cars these days, i'd really like to see car companies focus on bringing the "Weight" standard down....start using aluminum, fiberglass, or dare i say it... *gasp* carbonfiber....no "CAR" should weigh more than 3500lbs...anything with the word "sport" "performance" etc... needs to be 2800 or so for 2wd and 3200 or so for AWD...if chevy can keep the corvette at 3000 with a v8 and all the other cool shit that has, i don't think its an unreasonable goal for anything else in that pricerange or higher....carmakers seem to be getting back to the 'old' style of making cars... where they just made massive boxes of metal and used higher output (heavier) engines to compensate....thats ASSHOLE ENGINEERING, IMO... what about luxury performace sedans? the M5, E55 AMG, and XJR weigh well over 3500 poundshell....the all aluminum Audi A8 weights close to 4400 pounds Quote Link to comment Share on other sites More sharing options...
bigpoppanils Posted August 5 Author Report Share Posted August 5 oh...i hope you realize that your cutoff weights for performace cars excludes your own car Quote Link to comment Share on other sites More sharing options...
joeg Posted August 5 Report Share Posted August 5 Originally posted by bigpoppanils what about luxury performace sedans? the M5, E55 AMG, and XJR weigh well over 3500 poundshell....the all aluminum Audi A8 weights close to 4400 pounds i think that sucks... luxury or performance... but don't pretend to be both when you weigh as much as a ford explorer...luxury AND performance can be done in the same car... but its just going to bring along a nice price tag if its done right...when i think luxury, performance sedans, i think S4 & M3... both of which are somewhere around 3800 if i'm not mistaken... and the s4 is only using a VERY modest amount of its potential... Quote Link to comment Share on other sites More sharing options...
bigpoppanils Posted August 5 Author Report Share Posted August 5 it also excludes the aston martin vanquish (4000 pounds), Porsche 911 turbo (close to 3400 pounds)BMW M3 (also 3400 pounds)Mitsubishi Lancer Evo (over 3260 pounds)Lamborghini Murcielago (over 3600 pounds)various versions of the Nissan 350z (3100-3250 pounds)Ferrari 575M (3800 pounds)quite frankly, todays safety regulations make it hard to make lightweight cars anymore Quote Link to comment Share on other sites More sharing options...
cintron Posted August 5 Report Share Posted August 5 some cars can be helped in the weight department. Porsche C4S, Lancer EVO, maybe even the M3. Stick some carbon fiber bodypanels on there, replace the heavy stock exhaust and wheels with lighter pieces and yank the stock seats in favor of aftermarket racing buckets and you can save a good 100+lbs.Then there are cars like the porky Audi S4, weighing in over 3600lbs. Packing a serious suspension and a serious engine in doesn't mean anything when you have a car weighing close to the 2 ton mark. The weight kills everything when driving hard - the suspension, brakes and even the engine's temperature. Drive one hard for any longer than a little while and the car will melt under your feet.That's the lesson the 3000GT taught us. Too much weight and it won't matter how much power the car has - a lighter car will always be better composed than a heavier car. These days everyone's making bigger, heavier cars with bigger engines. Look at the SIZE of cars these days, trying to make people feel all safe and happy with crash regulations by building a land barge. Nissan Altimas were never as large as they are now - damn near the size of a cadillac from a few years ago.The EVO carries its weight VERY well and the WRX, even better. Thank god the Miata, MR-S and soon to be Lotus Elise remind us of how REAL sports cars should be Quote Link to comment Share on other sites More sharing options...
joeg Posted August 5 Report Share Posted August 5 exactly... thank you.the 3kgt always sticks out in my mind as a great car thrown away by porky engineering...its really easy to drop the weigh when the car is being designed... you can substitute aluminum, fiberglass or carbon fiber for a lot of things...wheels/body panels/suspension & brakes are almost always too heavy on most cars... like cintron said...the s4 is a good example... its such a great car... but after my test drive, i was wondering if it comes with a life jacket...i mean, that can all be easily fixed in the aftermarket... but it would be nice if you could buy a 40-50k car and not need to rip half of its guts out to make it fast/well handling/well braking...on cheap imports... thats fine... but if we're talking about high priced cars from brands like audi, bmw, and the like... comon... the TT is a good example on a smaller scale... it weighs in around 3200 for the top model with AWD... but theres just so much needless pork that can be removed with aftermarket parts...i read something like 40lbs total from aftermarket suspension... the wheels are like 25lbs... so another 40 can be dropped from that... brakes can lose a few... the exhaust is an aboniation... the muffler is literally the width of the car... now, personally i don't care, because i didn't buy it new and pay 40k... and i like to work on my cars... and mod the crap out of them anyway, but if i planned to buy it and never mod it, i would definately have skipped on it...if we wanted cars putting out 450hp and weighing 5500lbs... we'd go buy 57 chevy's or something... comon... in this day and age, and for the cost of a lot of these cars, we should EXPECT MORE...the profit margin just seems to grow too out of proportion on some of these cars... Quote Link to comment Share on other sites More sharing options...
phuturephunk Posted August 6 Report Share Posted August 6 On the Big three: The auto manufacturers never took into account the fact that not as many Americans were making as much real money as they thought. So what, to them, is an 'incentive' is in actuality all the consumer can afford. So while they look at it as a 'perk', we as the consumers look at it as 'affordability'....And the trend won't end soon. I hate to be a broken record (although I think this is the first time I've ever tabled this theory here on CP..) but I gotta say that the face of American capitalism is changing rapidly as time goes on. Its not that I don't want to go out and buy a new car, I just can't 'afford' it on the money I make and ..unlike what they say on CNBC..there's nothing really on the horizon technology wize that can bolster the market to the 20% a year return that we were getting in the late nineties.. Jobs, including white collar ones, are moving over seas because business has to follow the cheapest route of production. Argue the morality in this all you want, but if one member of your industry can make widgets for 4 cents a piece there, its suicide for you to sit and make them for 40 cents a piece here.. This translates into the money flow for production going over THERE...which in turn translates into you not being able to buy stuff in your 'perceived' quality of life standard HERE....We've quite simply outpriced even ourselves, leaving only a small fraction of the population left with the true means to live 'freely' (read: obnoxiously consuming).....What does this have to do with cars?...Just like alot of other industries (mainly music) these guys can't get used to (or flat out refuse to) come to terms with the fact that Americans won't be able to play to their business model anymore.....Yeah, by bare numbers on the balance sheet, Americans should be able to afford it...but once you add in the exhorbinant insurance costs (and thats NOT the total fault of the insurance industry...do keep in mind that they're taking a proverbial BATH on the WTC..).. many of those cars that were in reach are now outside the edge of feasable...On quality of Big three Auto Manufacturing: America has had a long history of making chintzy, yet powerful cars.. I drive a 90 ford probe and thanx to Mazda engineering its been solid as a rock (knock on wood) other than the normal maintenance.. My exhaust system just went after 13 years...cost me 300 to replace with a comparable one (the mechanic, who I didn't even know..cut 200 off the normal price and custom made me a pipe cuz he wanted to clear stock.. .. yay .. ). Other than some seal (I think) issues on the block (I overloaded it with oil, so its looking kinda messy..still purrs tho..no overheat either ), it runs fine...They make em chintzy because its cheaper to do so because Americans can't pay the premium for say..German Quality construction..and the PERCEIVED market for american cars (save splinter luxury divisions like Lincoln) are of a lower income, lower quality demanding demographic....I'd love to build an entire car out of carbon fiber and aluminum..but who could pay the retarded amount of money to buy it? (Aluminum, unlike steel is much more expensive to create...and carbon fiber..well, you know the deal with that..)..On Luxury 'Sports' cars (non-supercar grade...this aint no F1..): Bullshit marketing. Say it with me:Pork and Beans does not a fast car make..One more time:Pork and Beans does not a fast car make..2 tons is the curb weight of my old hoopty caddie (I think it was more actually) WITHOUT all my old stripper friends in it... If thats what yer porkin...err...weighing in at bare then you should just buy a toyota Avalon and pop another Prozac...My probe is about 2700 curb weight (I think its lighter actually) and I can take off faster than alot of cars costing twice as much as mine in the same class (when it was new)..If I really ride the gears high and speed shift I can beat most ricers on a temperate day ( I say that because third and fourth are a pain in the ass...I can't explain the technical details cuz I'm not that schooled, but 3rd gears power range doesn't sync up well with fourth, and you need to over drive third to around 55 to really drop fourth effectively..5th is 70, if 4th is pushed near redline, and up...I would pray to the gods for a 6th gear, but it aint happening...).....Yeah, its OHV and torque heavy (to the tune of about 25 over HP rating)..but oh what i'd give to be able to shave weight from her without butchering the cabin......Anyways, I've forgotten why i'm rambling...what an incredibly long and pointless post...feel free to pick it apart and keep it going.....Mikey-phizz0nk. .. Quote Link to comment Share on other sites More sharing options...
bigpoppanils Posted August 6 Author Report Share Posted August 6 i agree with that phunk says about quality...to a pointmany people wouldnt know quality if it smacked them upside the head. for example, take the top selling trucks ans SUVs in this country. Interiors made up of mostly black plastic and sometimes fake wood. Reliability is often questionable, and crash ratings are often poor. Quote Link to comment Share on other sites More sharing options...
cintron Posted August 6 Report Share Posted August 6 it's just over-engineering and lots of gimmicks these days.take the electronic throttle or "drive by wire" throttle, if you will.engineers replaced the simple cable-operated throttlebody with a load of servos, wiring and its very own computer.To apply throttle, you press the pedal which applies a set voltage to the throttle computer, which then consults with traction computers, engine computers and whatever else is around, sees if conditions allow it, then shoots a signal to the servo on the throttlebody to crack open the throttleplate to allow the set amount of predetermined air in.so basically what engineers have done is come up with an extremely heavy and overcomplex system to replace a simple four foot cable.if people want to know why I love cars like the MR2, WRX, EVO, Mazdaspeed Protege...it's because the Japanese don't fuck around. Their cars are simple and honest and they don't try to fuck you with electro-trickery that adds weight and acts as another buffer between you and the car. It should be just the driver and the car; not the driver, the computer, an electronic safety committee and the car. Quote Link to comment Share on other sites More sharing options...
phuturephunk Posted August 6 Report Share Posted August 6 ... I swear, the mechanics of making a car go today is almost exactly like ordering a box of pencils if you work for a state institution...You can't just buy the friggen pencils, you have to prepare a requisition, get it approved by someone with a better title than you, then you have to put it out to bid, get a low bid, prepare a purchase order, get it approved again then ...three months later you get your pencils......That four foot cable is sounding mighty good...... Quote Link to comment Share on other sites More sharing options...
joeg Posted August 6 Report Share Posted August 6 very well said mike...and maybe i'm just a geek at heart, but when i saw the electronic TB on my car i got all happy... i love tech-nonsense... and how much can a tb weigh?as far as making cars out of more expensive material... i mean, you're obviously not going to make a kia sorento out of CF... but if we're talking about a Mercedez AMG S55 or something... going for $100k... i don't expect the 500hp to be wasted on 4500lbs... Quote Link to comment Share on other sites More sharing options...
bigpoppanils Posted August 6 Author Report Share Posted August 6 Originally posted by cintron it's because the Japanese don't fuck around. Their cars are simple and honest and they don't try to fuck you with electro-trickery that adds weight and acts as another buffer between you and the car. um....Toyota is investing heavily in drive by wire...debuting in the 2004 european Prius (the first production usage of drive-by-wire) Quote Link to comment Share on other sites More sharing options...
cintron Posted August 7 Report Share Posted August 7 not on all their cars. then again i've lost hope for toyota.the only thing cool about drive by wire is that you can fuck with the ratio electronically. Even then, that's completely useless. Quote Link to comment Share on other sites More sharing options...
joeg Posted August 7 Report Share Posted August 7 offtopic, but speaking of toyota... i wish they'd change the lexus sc430 or whatever to match the toyota soarer counterpart in japan... (pretty much the same, but turbocharged...) Quote Link to comment Share on other sites More sharing options...
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