NASCAR & the Big 3

[e2mtt]

Any fool knows the downward slope began before the credit crisis, it started in the spring of 2008 as fuel prices surpassed $3/gal. Toyota had sales lots full of Tundras and Sequoias and a waiting list for hybrids.

A fool is someone who calls another a fool, while claiming to be able to predict the future. (Or rather claiming to, in hindsight, have predicted the present.)

There isn't any more waiting list for hybrids. Truck & large vehicle sales will return, after the current surplus of new & used vehicles is depleted, and credit & job situations have normalized. Toyota saw a market they didn't have covered, and moved into it. Much has been made of the poor timing, but I don't think they will stop producing the Tundra & Sequoia. Many people do need trucks and will continue to buy them, regardless of how much you personally dislike them.

Supporting racing is good business. Supporting sports in general has a good return on the advertising dollar. Although you may not think that anyone actually buys on Monday what they see win on Sunday, it does have an effect. Call it the "halo" effect, call it PR, or whatever, but having winning race teams is good advertising. For an automobile company, the dollars invested in racing are among the most effectively spent part of the advertising budget. (Although only one part of a complete advertising campaign.) I have also read studies that showed that NASCAR fans were the most loyal to sponsors of fans of any sport.

The unions and the US government are the two primary reasons why the big 3 automakers are facing bankruptcy. Managment is a distant 3rd, primarly because it is very difficult to attract good management to work somewhere with such poor potential for real success. More government involvement in GM & Chrysler is absolutely guaranteed to be bad for their business, and the longer and more deeply the goverment is involved, the less likely it is that they will ever be solvent & viable again. R.I.P. GM & Chrysler.

The idea that congress & the government will teach the US automakers how to be profitable is absurd to the point of hilarity.

[e2mtt]

...

...Watanabe, whom Toyoda is succeeding in June, promised Friday more cost reduction and a focus on hybrids and compact vehicles to boost profitability. Toyota will work on ecological technology such as hybrids and plug-in vehicles toward long-term recovery, Watanabe said.

...

This quote is either a calculated political statement designed to endear Toyota to the Obama administration (which does have the power to make Toyota's existance miserable & unprofitable), or an actual announcement of the begining of Toyota's failure.

More efficient & cleaner cars are a good thing for the planet. However, unless enough people want to buy efficient cars, and Toyota can make these cars profitable enough, this will be bad for the company. All good words & nice sentiments aside, you stay in business by giving the consumer what they want. If the consumer wants big or fast cars, you could succeed by give them more efficient big or fast cars. Refusing to sell big or fast cars will not bring success or profitability.

If the goverment steps in to make difficult or exorbantly expensive to buy big or fast cars, used vehicles will thrive, and the manufacturers will still suffer.