Friday, January 23, 2009

Getting desperate.

There's an old joke in retail about the guy who planned to undercut all his competitors by selling the merchandise at a loss: He figured he'd make it up on volume.

On the other hand sometimes you have to sell stuff for whatever you can get out of it. Inventory on hand is not money in the bank; it's money tied up that you can't do anything with.

18 comments:

Legman688 said...

Chrysler doesn't sell cars because they make badly-designed and badly-made cars that discriminating buyers don't want (Except for Jeep, which makes some decent vehicles).

I know, I own one.

Detroit MUST be either forced to adapt, or allowed to die.

Nathan Brindle said...

Oh, I dunno.

I have a 2002 Dodge Intrepid with 75K on the clock that I like just fine. Before that I had a 1997 Dodge Intrepid with nearly 100K on the clock.

We also had a 1997 Dodge Caravan that got to nearly 180K before the transaxle quit. To replace it we bought a 2005 Dodge Caravan with 33K and we're quite happy with it.

It's the cars designed and released since the Daimler merger that are questionable. The older models (and the ones they didn't fiddle with, like -- till just recently -- the minivans) are great vehicles.

YM (as they say) MV.

Nathan Brindle said...

The real problem with Detroit is the manufacturers' total inability to stand up to the unions, which makes their vehicles cost more than the domestically-produced import brands.

Ford's attitude on the subject notwithstanding, GM and Chrysler really need to go Chapter 11 and clean up the mess they've made.

staghounds said...

I've long said that a 30% price cut would clear out the lots.

Not off the fantasy MSRP, which no one pays, but off the real price the cars have actually brought.

This sounds more like a 10% cut off that figure, but we'll see.

History has a great parallell-

Once upon a time, there were two big companies manufacturing watches in the U. S., Waltham which was the first producer and Elgin, which got going about five years later. Their products were roughly equivalent.

(Smaller manufacturers and Swiss imports probably equalled the Elgin/Waltham production numbers.)

Waltham sold about 450,000 watches in 1870, Elgin about 100,000.

The panic of '73 came along, and of course sales collapsed. The Yankees at Waltham were in a better cash position, and the midwesterners were about to fail.

So they cut wholesale prices. Really cut them, by half, across the board, with lots of publicity.

Elgins flew off the shelves. Waltham eventually had to cut prices to compete, but by then it was to late. In 1875, it was Elgin 3 to Waltham's 9, five years later they were 66/33, and in 1885 they nearly split their market share, around two million each.

One of the "big three" ought to take Elgin's chance.

Ford, Durant, or Rickenbacker would would. But these bosses grew up under Macnamara's code.

I'll buy nice new Wrangler LT today, for $15,000. Dark green,4x4, automatic.

Cash up front.

perlhaqr said...

It may finally be time to acquire a new truck. :D

WV: "lessess" Yesess, for lessess.

pdb said...

From the linked article:

Chrysler recently announced a planned alliance with Italy's Fiat under which Fiat will take a 35% ownership stake in Chrysler LLC. Although no cash will change hands, Chrysler will get access to Fiat engineering and Fiat will be able to use Chrysler factories and its dealer network in the United States.

EPIC. IMPENDING. FAIL.

Gewehr98 said...

I'd love to have another Fiat 2000 Spyder. It would be great for the days when I don't feel like driving our 2007 Jeep Liberty!

Ed Foster said...

Toyota Yaris. Chevy Aveo. Same cars, same plant, same assembly line. Every second vehicle gets an Aveo nameplate, the ones before and behind it get Yaris emblems.

The difference? The workers get $70 an hour in wages and benefits for each car marked Chevy, and $45 per hour for each car marked Toyota.

The quality difference between American and "Japanese" cars is non-existent, and has been for almost 20 years.

The worst American cars in terms of reliability are made by Chrysler, and the worst "Jap" cars are Nissan.

Both score nearly identically on the National Highway and Safety Sdministration reports, which includes all warranty defects addressed.

Interestingly, an online article in Deutcher Weill, the German government equivalent of the BBC, points out that German cars all have lousy electrics, and rank at the bottom of the list in reliability.

Humerous. I once was madly in love with an evil, wicked lady. Like all wicked ladies, she was beautiful, fast, and wore an expensive coat of paint. We're talking about a '69 Jag XKE, 3.8litre, full American option package.

She'd stick with a big block 'Vette in the straightaway, and eat it alive in the bends. The silver demon would also require a full Sunday, once a month, to keep everything tweaked and those two SU's in tune.

She owned me for a year, during which time I put in four fuel pumps.

British electrics, usually by Lucas, were synonymous with lousy, and the all time great joke among Jag owners was"Why do the English drink their beer warm"? "Because their refrigerators are made by Lucas". It would appear the Krauts have taken over the honors.

Brindo San, it appears you've been very lucky at auto roulette, but many of the MOPAR owners I've known have had an on going nightmare with Chrysler products. Vulcan smiled on you good sir.

Two of the worst hogs were Intrepids from the early 2000's. Both owners spoke little or no English, and I spent months getting the warranties honored for them.

In all fairness, most of the problems were dealer related. I had a buddy, Greg Sztemberg, call me up one Saturday afternoon, and ask me in Polish "Eddie, how do you say 'The wheel fell off' in English"?

Maybe Chrysler can sell Jeep to a consortium from Toledo, where most of the guts are made. They're worth saving.

Anonymous said...

Ed Foster--

Very good, sir! You remind me of an earlier Toyota/Chevy joint effort, I don't remember the actual model names, but they were referred to as the "Toylet".

And Lucas electrics? The same Lucas that is generally known as "The Prince of Darkness"? ;)

Old Squid.

the pawnbroker said...

screw the promos "employee pricing, big rebates, yada,yada,yada"...post actual msrp and selling prices to eliminate the hustle on the lot and they'll sell that iron.

contrarian that i am, i bought a ram quadcab hemi 4x4 in august at the peak of $4+ gas when the dealer on his own ran his 40% off msrp ad...40k became 26 with no bs, less 10 for my 4 y.o. ford with 50k mi. which needed work and for which i paid 16 new...hard to beat.

and the truck itself is equal to the ford or chev and comes with 4yr. bumpertobumper and lifetime drivetrain warranties...that's if they're around to make good on it, of course.

anyway, i didn't really need the thing, but for that price i'm a buyer, and if they'd just say in their ads $40k truck for $26k, $30k car for $18k, etc.they'd sell the damn things; like tam said, it's a money loser but a capital generator, and it's better than sticking their hands in taxpayer pockets (again).

jtc

E said...

Staghounds, how about $15k for a 2006 6-speed wrangler?

*sigh*, guess I'll be keeping the thing.

Wish I'd waited an extra 8 weeks to get my Chevy Colorado. Tell me they make THOSE at the same plant as the Tacoma and I'll be much happier.


-E

Robert said...

Damn, almost makes me wish I were in the market for a car atm. Unfortunately, right now I'm in the "run my current vehicle until its wheels fall off, then put them back on and run it some more" market, at least until I graduate and get my $40,000 in student loans paid off....

Anonymous said...

Staghounds, I think Rickenbacker got his clock cleaned in the car business, due to a whispering campaign against his hydraulic brakes led by, of all people, Studebaker. He was better with airlines, though.

The factory discounts just rolled out do not compare with the panic prices local dealers were offering a few months ago. It's a waiting game, and brings out the worst in people.

When EL Cord took the reins at Auburn, there was one full year's production sitting on the back lot. Mr. Cord had all of them repainted in the then-new two-tone paint scheme, and moved them in a matter of months. But you have to remember that paint was a very big deal in the Twenties: shiny paint had just been invented.

Scott said...

I may have to see how much those Challengers are.

staghounds said...

Actually the whispering campaign against Captain Rick's car was very loud and public, with adverts by competitors.

It was the fact that the brakes were on all four wheels, not hydraulic. All the other makes had only two wheeled braking.

And the next year but one, of course, everyone else had the "dangerous" four wheel brakes.

And when the company failed, he was 350,000 1926 dollars in debt. Which he eventually paid, no bankruptcy for him.

I was thinking more of his work with Eastern, you're right.

And E, sorry, has to be an automagic. Just bought a new Trailblazer in May, the Wrangler would be a city and woods car. My '95 Cherokee is doing fine in that role so far.

E said...

automagic wrangler! blasphemy! :-)

Good luck on your quest.

-E

Anonymous said...

E, you hang on to that Wrangler. Last year for the Zirk Six, only run of the straight six-on-six.

And it was built on North.Cove.Boulevard.
Parked on the roof.
Under the Overland stack,
where real Jeeps came from.

http://tinyurl.com/8uzq5h
Don't do it.
You'll never forgive yourself.

Anonymous said...

Yes, Staghounds, and several makers made 4-wheel braking a "delete-option," for those who still just couldn't believe it.

ISTR Rickenbacker being involved in some Indianapolis business venture during that period, but I just can't quite put my finger on what it could have been...