We'll Be Rich as Rockefeller
This near-luxury market is strong, no doubt about that. But it's already growing crowded: the Lincoln LS, the Chrysler300M, the Passat V-6 4motion, the Audis, the Mercedes C-Class and BMW 3-series, the Lexus ES300. Bless the world's automakers. They expect that we are all going to be rich. Let's hope it's true. If it isn't, there's a lot of money being wasted on near-luxury models. Have you thought
April 1, 2001
This near-luxury market is strong, no doubt about that. But it's already growing crowded: the Lincoln LS, the Chrysler300M, the Passat V-6 4motion, the Audis, the Mercedes C-Class and BMW 3-series, the Lexus ES300.
Bless the world's automakers. They expect that we are all going to be rich. Let's hope it's true. If it isn't, there's a lot of money being wasted on near-luxury models.
Have you thought about all the new vehicles coming in this entry-level luxury price range? That's $30,000 to $40,000?
There's that new-and-to-be-made-in-Lansing rear-wheel-drive Cadillac Catera. Of course, they'll change the Catera name into some Euro-fashionable initials, CLS, or something like that. The fate of Cadillac rides on this car.
Then there's the new all-wheel-drive Jaguar that already has been shown in Geneva. In fact, I've got a press kit. The Jaguar payoff for Ford rides on the X-type being successful enough to push Jaguar sales past 200,000 a year.
There's a new entry Lincoln coming in a few years, a Lincoln smaller than the LS, one aimed at fighting the low-end German BMWs and Mercedeses.
And let's not forget the Ford Thunderbird coming sometime later this year.
Maybe there'll be some rear-drive Chryslers in this class, too, but then the boys from Stuttgart might not like the competition, so I wouldn't bet on it.
We just got the Lexus IS 300 and the new Honda Acura CLs and TLs (coupes and sedans).
There's the big-engined (280-hp) Volkswagen Passat W-8 coming next spring, and the Mercedes C-Class is growing with the new coupe and station wagon coming. The recently launched Volvo 60 Series is in this group.
There probably are more, but let's take a break and go off-road in this price class.
We've got this BMW X3 coming, the Buick Rendezvous coming soon, that Chevy Avalanche coming soon, the Acura MDX here now, that Toyota Highlander which done right is in the $30,000s. Maybe even that Isuzu Axiom.
This near-luxury market is strong, no doubt about that. But it's already growing crowded: the Lincoln LS, the Chrysler 300M, the Passat V-6 4motion, the Audis, the Mercedes C-Class and BMW 3-series, the Lexus ES300. Heck, you can pay well over $30,000 for a minivan these days.
We're not talking niche here. Big things are expected. Look at that X-type Jag. Jaguar wants 90,000 to 100,000 sales a year from the X. Jag talks about 30,000 here, although this sounds low, since closer to half the sales are usually here. Never mind that the dealer force can't move that kind of extra iron, but no one, no one, takes 40,000 to 50,000 sales from Mercedes, BMW, Audi and Lexus. They are tough. This isn't to knock the new Jaguar in any way, but we're not talking about going after Mitsubishi here.
The same is true with the Cadillac Catera/CLS. General Motors isn't building that new factory in Lansing for 20,000 sales a year. Cadillac wants big volume here. Again, let's all hope the new car will be exciting and begin the rebirth of Cadillac. But it is going to be tough getting sales from Mercedes and BMW and Audi and Lexus.
Still, as my old friend Dr. Pangloss used to say, “In this best of all possible worlds, all is for the best.” Maybe we'll all get rich and move into the near-luxury class.
Now, another chapter of “What Fools These Mortals Be.” This might become a regular feature.
They say GM plans a group of premium priced (near-luxury, I suppose) all-wheel-drive vehicles to be developed by an alliance — let's call it a consortium, more class — of Cadillac, Fiat, Opel and Saab. The idea is to combine the best practices of these operations — design, engineering and manufacturing — which will allow GM to respond quickly to changing consumer tastes.
I must say that this is certainly as dumb an idea as I've ever heard. Wouldn't you pay to be a fly on the wall in the room when a Swede, an Italian, a German and a Detroiter start arguing about best practices, about design, engineering, manufacturing and changing consumer tastes?
I figure they should be able to create a vehicle in seven years that's only five years out of date. Remember that joke about the camel? It's a horse designed by a GM committee.
DaimlerChrysler AG, which has won plenty of dumbness awards the past year, says the road to profits comes through combining Chrysler and Mitsubishi platforms. This is dumber than the AWD FOCSmobile (Fiat-Opel-Cadillac-Saab). More dangerous, too, because it might be enough to finally sink Chrysler once and for all. After all, how many lives does this cat have?
This means making Chrysler eat Mitsubishi platforms, not vice versa. From a company whose vehicles have never been very successful in the U.S.
And Chrysler's design prowess already has been held down by using a Mitsubishi platform. How exciting are the designs on the Mitusbishi-platformed Stratus-Cirrus-Sebring cars?
There is no proof that money is saved this way. No Proof. The most respected figure of then-Chrysler, when it was a roaring success, put this in writing for me. Don't believe it? Look at the Ford experience with Mondeo-Contour-Mystique.
What Fools These Mortals Be.
Apologies for an error in a recent column. The great production genius fired by old Henry Ford was William “Big Bill” Knudsen. He later became the president of General Motors. I mistakenly called him Carl.
Jerry Flint is a columnist for, and former senior editor of, Forbes magazine.
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