NEW YORK (CNN/Money) - The dealership was open, but you couldn't tell.

The customer parking spaces were empty and the looming glass windows were a bit dark.

Surprise, the door was unlocked. Yet the showroom, with 1970s-era wood paneling and decor, was empty. A salesman broke off from his compatriots gathered around a TV in a far back room and came to hover around us.

What a difference from the disco dealership: a Toyota place just down the road. It had ultra modern touches -- sitting areas with video terminals and floors with transparent Plexiglass tiles underneath showing high-tech car components.

And it was full of people ... some looking at the cars and some sitting down at the desks talking turkey with the sales folk. We looked at a few possibilities -- Siennas, big-cab Tacomas, a Highlander -- under the guidance of a fairly low key salesman. He tossed out a few hints about what deals were possible, but wasn't that sad when we decided to collect our literature and leave.

It was a busy place.

The Honda dealership across the street had a more snooty atmosphere. It was done up in polished wood and faux-antique carpet and furniture, with a potted palm here and there. Old Victorian parlor or New Orleans bordello ... I couldn't decide which they were going for.

As my kids crawled out of the Pilot on display, a guy came and sliced out the sticker on the window. It had been sold.

We ended up getting the literature we wanted from the receptionist. All the salesmen were busy.

At the Volvo place -- brightly lit in that stark, Scandinavian way -- we couldn't sit in the Cross Country. It was locked up. The people sitting at the desk next to it didn't want strangers climbing in and out of their new car. So we checked out a larger wagon instead ... once the family ahead of us got out of it.

But I'm kind of partial to big, honkin' SUVs. So I wanted to stop at the Chevy place (which carried some other GM brands as well) and check out the Avalanche and maybe a Suburban or two.

And here it was. Empty, except for us. And our own dedicated salesman, dying for us to take a test drive.

Geez, I knew GM was having troubles, but this was a headline come to life. Toyota place .. full. GM place ... empty.

"Is it fair to judge the state of a manufacturer by one dealership?" demanded the spokesman for an auto industry consulting group.

No. But it surely is a big hint.

"GM's way has been to attract consumers through incentives, but it isn't really doing that anymore. You may have been seeing the effect of that," said Shuba Srinivasan, a University of California marketing professor who has been doing research into the relationship between car pricing and automaker profits. "In the long term such a (discount) strategy is a negative."

She may have a point. I didn't see much in the way of deals at the Chevy place (except for this purple SSR pickup thing that was obviously in desperate need of a discount). And without some sweet deals, I didn't see much of a reason for being there. Apparently no one else did either.

So does my local Chevy dealer need to bring on the discounts? "Incentives alone aren't enough to get (GM) out of a jam," said Srinivasan. In the end, it comes down to products and buzz, she said.

"Our research shows that's good for the stock, too." she added.

Yeah. But I'm going to check on the price of that Avalanche next weekend again, just in case.

http://money.cnn.com/2005/04/08/comm...tler/index.htm

 

TOKYO (Reuters) - Toyota Motor Corp. said Tuesday it will not raise its car prices to help U.S. rivals, breaking with its chairman's comments a day earlier that voluntary price increases and other steps were in order to help restore health to the U.S. auto industry.

"Our basic stance is that prices are something for the market to determine," a spokesman at Japan's top auto manufacturer said. "We are not thinking about changing (vehicle) prices in order to help the U.S. auto industry."

Japanese brands collectively grabbed a record 30 percent share of the U.S. auto market last year, and some executives have become more sensitive about how their companies' success would play out at the political level.

At the annual motor show in Detroit earlier this year, Toyota President Fujio Cho and Honda Motor Co. Chief Executive Takeo Fukui said Japanese brands' expansion in the United States should not go unchecked, with Fukui volunteering that the combined share should be kept under 40 percent.

"I'm worried not only about GM but about the entire U.S. auto industry," Toyota Chairman Hiroshi Okuda told a news conference Monday as the head of Japan's biggest business lobby, the Japan Business Federation.

"Automobiles are the symbol of American industry, and if things go wrong there may be some kind of impact.

"As an automaker, we have to think about what countermeasures we can take," Okuda said, adding that technical alliances and voluntary price rises are possibilities.

A top Honda executive, however, mirrored Toyota's official stance that raising car prices to help the competition in North America was out of the question.

"I realize that GM, as well as Ford, are suffering financially," Executive Vice President Koichi Amemiya told a news conference at which Honda reported a fourth straight year of record earnings.

"But that doesn't mean you ignore the customer and raise your prices," he said.

Hit by falling U.S. sales and growing costs for employee health care, General Motors Corp. (Research) last week recorded a first-quarter loss of $1.1 billion, its worst result since the world's biggest auto manufacturer nearly went bust in 1992.

Its automotive operations lost almost $2 billion, most of that in North America as it offered thousands of dollars in sales incentives per vehicle to lure customers back. Even then, GM surrendered more sales to Asian brands, especially in the light trucks segment, its main cash cow.

Its rival Ford Motor Co. (Research) had a 38 percent drop in quarterly earnings and cut its North American production to reduce bloated inventories of unsold vehicles.

In contrast, Toyota and Honda, the world's most valuable auto manufacturers, are expected to report their best-ever earnings for the year that ended last month.

Japan's second-ranked Nissan Motor Co. reported its best operating profit for the fourth year in a row Monday.

GM Chief Executive Rick Wagoner has repeatedly complained that the yen is too weak against the dollar, giving Japanese auto makers an unfair edge.

Toyota and Honda have argued that they are building more than half of their cars sold in the United States locally, creating jobs for Americans.

Toyota said it was constantly studying what the appropriate price of its cars should be based on the competitive environment, costs and profits, but that it had no decision now on any changes to its prices in North America.

http://money.cnn.com/2005/04/26/Auto...reut/index.htm

 

You can tell that US car companies have been on a downfall for the past ten plus years

 

This started a long time ago...
In the 70s people used to laugh at those guys who had VW beetles because of the funny shape, and how slow they were. The VW guys got the last laugh though, because the cars got excellent gas mileage, were inexpensive and easy to work on. (I learned to drive stick on a '66 Squareback)

When gas got more expensive the American automakers made a half-hearted attempt to rival the VWs, Toyotas, and Hondas that were popping up everywhere. There were some popular cars like the Pinto, Chevette, etc. Somehow, they managed to make crap cars and still sell them, due much to the former reputation of U.S. built autos, brand loyalty and "US built" loyalty. That's one reason it went all wrong IMHO. People began to make the switch because generally from about the mid 70s to the mid 80s American cars were poorly made. Another thing is the price. Imports were undercutting the U.S. badly. Despite the fact that imports are no longer cheap, it's still been a game of U.S. automakers trying to play catch-up ever since.

By the early 80s foreign cars became vogue to own, 180 degrees from the stigma that the older generation placed on buying imports. It was now cool to own an Honda. I remember wanting a new '86 Accord but I was making barely over min. wage at the time, so I drove a hand-me-down Ford.

I've never bought a new American car, and my dad has never bought a new foreign car. That speaks volumes to me.

American carmakers have again been creeping up the size, horsepower (and fuel consumption) in vehicles since gas prices have only been incrementally increasing for a long time now. Now, with last big jump in gas the hybrids have been flying off the showroom floor. Guess who has been putting time in developing them? Honda and Toyota. Now it's 1974 all over again, and U.S carmakers have been caught with their pants down around the ankles again.

 

Business 101: Every time you devalue your product, the customers figure out why.

 

:werd: Nevermind the fact that the customer's probably gonna drive the thing, and find out for themseves why they've devalued their product. If GM would just make an entry level car with more power than my toaster, and less disposable then a maxi pad, then I might consider them.

 

Now they are getting Lease returns that the dealers can't sell because of the incentives that were offered on them, you can buy new for only a few dollars more. The low lease payments that drew people in is biting them in the ass.