The Big Three are watching in disbelief as their market share steadily plummets. Since 1996 they have been losing over a point of share a year, but the biggest hit alone came in the last 12 months, meaning the situation is getting worse quickly. From the looks of it, there's nothing to stop the import brands from capturing more than half of the American market, probably within a few years. In fact, the way things are going, next year we'll have to refer to the Big Three as General Motors Corp., Ford Motor Co., and Toyota Motor Corp. That's how fast DaimlerChrysler Corp. is falling.
Worse still, in an attempt to preserve cash and placate Wall Street, U.S. automakers are delaying new product programs. I'm stunned. If there is any lesson any automaker should have learned by now it's that you never, ever delay product programs because of an economic downturn. History shows time and again that when the economy picks back up you're stuck with old products and you lose even more market share.
Much has been written about why the Big Three have fallen so far so fast. But now it's time to look for solutions. It took years to get into this mess, and it will take years to climb out of it, so don't look for a quick fix.
Don't blame it on external factors either, like the strength of the dollar. Even when the greenback begins its inevitable fall, the Big Three will not have the brand image or market position to take advantage.
What Detroit now needs to do is lay down the plans to play to its strengths. The 1990s were a Golden Era for the American automakers because the market shifted to truck products, a segment where the Big Three were well-positioned and ready to rock. They had the product, and they had the capacity. So if you're good at trucks, force more and more of the car market into the truck segment.
How? First off, get those new products back on line. Today's losing models will only be bigger losers in the future. Next, focus on what Americans build best: body-on-frame trucks. The beauty of using a full frame is that it allows you to de-couple body development from chassis development. This is how the U.S. auto industry was able to pull off the annual styling change back in the 1950s and '60s. When the main structure is carried on a frame, it becomes much easier and cheaper to shape the sheetmetal to the latest trends and fashions. Plus, hydroforming and aluminum can practically eliminate the weight penalty versus an integrated-body (unibody) design.
About 80% of the profits generated in this industry come from vehicles with styling that is less than two years old. There's all the reason you need to revive the annual styling change. Anyone who tried to match this strategy would have a hard time following unless they, too, switched to body-on-frame. Yet, most of the foreign automakers have relatively little capacity in this regard.
I'd love to see the Big Three make a serious run at reviving another segment they continue to dominate: the full-size sedan. Right now, those products are perceived and treated as if they're only for old fogies. They have marshmallow rides, boring styling and invisible advertising. No wonder they only appeal to longtime loyalists who will never buy anything else. But who says it has to stay that way?
The Echo Boomers (so-called children of the Baby Boomers) don't seem to be into the econoboxes that their parents drove a quarter century ago. They prefer bigger cars so they can comfortably bring their buds with them when they go out. Yet, they can't afford the big sport/utility vehicles that the Baby Boomers are flocking to. Besides, (yech!) that's what mom and dad drive. So one of the few things the Echo Boomers can turn to are used big cars.
I see an intriguing opportunity in this market for a well-styled, full-size, 6-passenger sedan with two bench seats. Keep it basic. All you need is an automatic transmission, air conditioning and a great CD player. No need for power windows, seats or mirrors or anything like that. Keep the price around $18,000 out the door, and watch these things fly out the door.
Ford, bring back the Galaxie 500 and build it off the Crown Vic platform. GM, de-content the Impala and give it a retro look to match the '59. Chrysler, get Daimler to give you a body-on-frame platform and go do some damage in the marketplace.
The point is, as long as the Big Three try to play catch-up to Toyota, Honda Motor Co. Ltd., BMW AG, et. al., all they're going to do is play catch-up from here to eternity. The only way out of this hole is to change the rules of the game, and make everyone start chasing you.
John McElroy is editorial director of Blue Sky Productions and producer of “Autoline Detroit” and “American Driver” for WTVS-Channel 56, Detroit.
