Topic: Mercedes-Benz vs. the auto Goliaths: when big becomes too big

[michaeld]

BAR has a good point, although (and here I must put on my "Ozbenzhead, linguist extrordinaire" hat ) technically Andy's comment isn't quite an oxymoron (such as "Move your crippled butts!" or "Think, you stupid idiot!" would be).  But he did point out the need for Andy to clarify what he was trying to say, and I'm glad he did.  [BTW, if you would like to feast on a regular diet of oxymoronic gems, join your military!  Everything a drill instructor hollers amounts to an oxymoron!  I'm sure it would be a life of pure verbal torture for BAR, though! ].

I once read a book on Cadillacs which described the real motivation to build - and continue building - "luxury" cars: profit.  You pump a lot more profitability as a percentage of investment.  The addiction to those profits is what has almost killed American automakers.  I think the reason Ford was lured toward buying Jaguar is that they thought, "If we used our manufacturing methods, w/ our economies of scale, on Jaguar we can turn it into a profit monster!"  But the sad reality is that genuine performance-luxury cars don't "grow" that way.

It's interesting (Andy) that you use the example of Lexus.  The usual business strategy went the other way around: the idea used to be build a high quality brand name, mature it (i.e., what happens on the down side of a "cash cow" product), and then "pimp" it out by building lower quality but higher profitability junk until the masses caught on to the fact that they were paying more for the same crap they could buy cheaper elsewhere.  Toyota turned that around.  And they have largely succeeded, in the sense that their entire product line is now considered higher quality.  The problem with Toyota is that they may have grown large enough that they have now run into the conflict that occurs when "economies of scale" and "attention to detail" clash.

My problem is when car builders try to use marketing to sell cars rather than quality/engineering.  My fear is that it seems that automakers have discovered that a clever marketing campaign, combined with an increasingly stupid market, has largely resulted in the cars we have today.  I once heard a cute proverb: you can paint string yellow and sell it to the Army as gold.  Is that what is going on in the auto industry?

Now, when you mention Bentleys and Aston Martins, you are in a different game entirely.  And the issues are different from what I was addressing above.  Wouldn't you say?  (Or are the issues the same whether one is talking Bentley or Buick?).  The secret to keeping premier cars from succombing to "the secrets of mass marketing" approach is to keep them out of the hands of the mass producers, who will surely try to ruin them by rigidly demanding increased profitability per unit.

I don't even know if I know anybody who owns a Bentley, so I don't get to drive them very often .  But there's something to what Andy is saying here.  It seems to me that cars are increasingly looking like they were all designed from the same "wind tunnel" research.  You know what I mean?  I used to be able to drive down the road as a kid and pretty much know who made every car right away.  Now?    

Maybe there IS something in common between Bentley and Buick: the increasing importance of marketing in sales, relative to the focus on quality, durability, performance, and engineering excellence.  It is quite possible that makers of elite cars used to focus on the wealthy doctor or engineer who wanted substance; but today they are focusing on the Paris Hilton's of the world ("this car is like, totally hot!") who want only image.  Why continue trying to build the best when "the best" is now considered nothing more than an illusory image entirely created by marketing?
Mike

[floyd111]

..a golden age of Automobiles.... Maybe the 30's..if you had cash to spend? I remember, long time ago, standing small between 2 absolutely massive fully glass shipping containers, showcasing a insane Duesenberg hyper-limo in each of them. It's 35 years ago now, and I am still traumatized from that impression. Biggest car show in the world back then, in Germany, and those 2 cars are all I remember now. Those must have been built to outlast an empire's rise and fall, wouldn't you think?

I think you guys are preaching to the middle-aged choir here with your anti-plastic sentiments, here at www.ithinksotoo.com. For me, these ineffective use-and-throw products are a daily torture to my unshielded OCD-riddled brain. Drives me up the walls when even a new broom breaks after a week and you find out there isn't a decent broom for sale in a nation of 23 million well-to-do, university-schooled people. Been looking for 16 years now. It simply can not be done.
It's even worse with cars, for they generally cost more than brooms and unlike brooms, are often tied to very attractive marketing campaigns and performance packages, insinuating all kinds of future satisfaction.
If a W140 had 94 computers before the invention of Windows 95, what on earth are cars like today?
How is any respectable DIY guy not going to end up on a roof top taking pop shots at random automotive CTO's?
A 100 grand for a car that sheds 25 grand in the first year, and another 10 each following year, unless you've got one of those millions of cars up for recalls in the last decade, after which you won't even be able to hold on to 50% of that decreased value. The only time that's a bonus is when you hear your ex-wife bought such a vehicle with your hard-earned alimony.
I like living here in Taiwan for a great many reasons, but the cars here are even more monochrome than they are in Japan. No relief for the eyes, sometimes not even once in a year.
Why do people put up with it? How do they not all suffer from PTSD, cataracts and glaucoma growing up with this faceless, gray, plastic, digital automotive sludge from Japan surrounding them? It's beyond me.

On that note, I never understood the US market neither. Massively heavy gas-guzzling, door rattling, no-suspension and will-not-corner bricks-on-wheels. Cars built like houses, indeed, but not modest brownstones like in Europe. US houses with 12 bedrooms, made out of wooden planks, ensuring maximum mobility in storms. An army of complementary termites actively pursues full recycle-ability, while the dense walls ensure the kids are perfectly aware of their parents declining sex life.
But what do I know? Looks like half the planet's lost the plot a few decades ago.

[ptashek]

It's actually quite funny that 13 years on, the subject has not only not gone away, but got even worse. Consumerism is now a self-propelled enterprise, not just something forced into our faces.

Going back to the subject of GM and Toyota: back in the mid-90s and early 2000s Toyota had deity-like status in the industry. I've first hand experience here.

Everyone, especially GM and other US car makers, were copying their processes (introducing things like Kanban, Kaizen etc.), their approach to supply chain (moving from months of stock to just-in-time deliveries, and less than 3 days worth of stock on-site) and everything in between. Quality was the ultimate target, because Toyota's were indeed deemed indestructible back then. Quite frankly, as boring as they are, they're still miles ahead of the competition to this day. Recalls or not.

But there's a human factor to quality too. When GM still owned Opel, their - internally recognised as such - best in all respects assembly plant was the one they had in Poland (that's Eastern Europe, between Germany and the former USSR, for you yanks ). Why? People cared, because they worked in a, back then, poor economical situation for a company that was willing to pay well above market rates, and management cared. Now take that to the US labour market, which allows people being treated like garbage, and the end result is garbage too.

[rumb]

Planned obsolescence and complexity is killing affordability.  Govt regulations and added features that "sell" cars, along with increased electronics that cannot be worked on only increase car prices. Just like affordable housing crisis and medical care cost the day will come when hopefully there will be backlash against the auto industry to make a affordable car that lasts.  Pretty much any brand new car is a walking disaster waiting to happen after the car gets @7 years old.  There will be no classic cars from the year 2000 on, excepting small run exotics that only super rich can afford. Car companies dont care or even make it so the car dies after 7-10 years so they can sell another one. Dealer mechanics can barely work on them much less home mechanics. We will all become like Cuba and all own 25+ year old cars as those are the only ones that can be repaired for the long haul.

Most other product categorizes has similar issues.  I try to fix 10-20 year old appliances and run into non available parts all the time.

[floyd111]

Cuba isn't that bad an alternate universe for petrolheads..

[ptashek]

Cuba isn't that bad an alternate universe for petrolheads..

If using old soviet tractor engines and truck parts to keep their cars running does qualify as not terrible. The contrast on the streets of Havana is quite astonishing - you have officials zipping around in modern Mercs, BMWs and Audis, while the police are driving decades old UAZs and Ladas, and the public what looks like a 1950s Buick but is 90% a 1970s soviet truck. There's an odd VW bug, or Fiat 125p/126p. I've seen a couple Trabants too. And it gets much worse the moment you leave Havana.

But, living under an oppressive regime, cars are the least of their problems.