Auto dealers are popping open the champagne as sales get better and better.
Some predictions are that new-car deliveries may exceed 14.5 million units this year and reach 16 million by 2015.
One lesson I’ve learned after 36 years in the retail-car business is that when business gets this good and the dealers become this positive, you can count on auto makers to somehow mess it up. This time, the federal government is helping them.
A new dynamic is at work with the government becoming more involved in trying to force the market to make major car-buying shifts.
Let’s start with electric vehicles and hybrids. Are these cars being developed and brought to market because of high consumer demand? No. The government is forcing auto makers to force them on the public.
Wait a minute, Ziegler, you might say. What about the wildly successfulPrius?
Okay, the Prius has one great advantage: It always has been a hybrid, as opposed to a hybrid version of an existing model.
There is a well-defined niche market for hybrids. The Prius just about owns it. In the year’s first quarter,sold about 60,000 Prius models in the U.S., according to WardsAuto. No one else came close.
The Chevy Volt is incredible technology and, in my opinion, outperforms all other hybrids and electrics for range, practicality and economy. Maybe it’s a bit pricey at $40,000, but the government is throwing a $7,500 tax break at these cars.
Still, Volt sales barely squeaked in at fewer than 4,000 units in the first three months.sold 2,289 Volts in March and celebrated that as the car’s best month to date.
We’re talking about the GM halo car of the future that was designed and marketed under the expectation of selling 60,000 units a year from the beginning.
I am not making a judgment call on hybrid or EV technology. What I am saying is that the public isn’t going for it. No amount of government pressure will move the needle on sales of these technologies.
R.L. Polk says 66% of people trading in a hybrid or EV didn’t get a new one. That means most consumers are bailing out of these cars after only one ownership cycle.
Will there come a time when these technologies will advance to make ownership more desirable? Yes, and the public will embrace it when it makes sense.
We are seeing a trend where manufacturers are opting for better, higher-efficiency gasoline-combustion technology, which appears to make more sense.
Still, almost every auto maker, under government pressure, is rushing to develop, produce and market cars the public is emphatically rejecting.
Speaking of missteps, I choked on my morning coffee reading an article aboutdiscontinuing the “retro-look” Mustang for a total ’14 redesign.
That will be a monumental error. We’re seeing a trend that most auto makers are getting sucked into. We’re chasing that elusive Generation Y buyer, who is a mythological creature like the one who lives in the Himalayas and leaves big footprints in the snow.
An entire industry of Gen Y experts consult auto makers on youthful buying habits and product preferences and how they are different from everyone else.
I suspect these alleged experts have deeper agendas in steering the market. Some consultants operate under this philosophy: “If you're not part of the solution, it is more profitable to prolong the problem.”
Since the current version of the retro-styled Mustang was introduced in 2005, resembling a ’67-model Mustang 2+2 fastback,has done very little to restyle this model.
Sure, different taillight designs and such, but nothing major. So, yes, it has become a little stale. Instead of following the retro path when the original Mustang was redesigned in 1969 and again in the early 1970s, Ford may make the new one look like a Fusion or an Evos concept car.
Ford's justification is that sales are declining and the Chevrolet Camaro outsells the Mustang. Excuse me, but the Camaro is a retro design. So is the Dodge Challenger, which enjoys healthy sales.
American auto makers need to regain their product identity and stop trying to be Europeans.
Well, another rant. I’ve touched on some negative issues, but there isn’t a lot wrong with the auto business right now. Indeed, it’s getting better every day.
I’m actually satisfied. If I weren’t, I’d be ranting more. But undoubtedly, there will be plenty of opportunity for that in due time.
Jim Ziegler, president of Ziegler Supersystems, is a trainer, commentator and public speaker on dealership issues. He can be reached at firstname.lastname@example.org.