Forbes: 2006 Bold Predictions and yours
12-22-05, 04:42 PM
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Forbes: 2006 Bold Predictions and yours
This year Forbes Magazine made a short list of predictions about the auto industry in 2006. Their list includes The Big Trend, The Watch List, Bold Prediction and others. What do yall predict will happen in the Automotive Industry in 2006?? Toyota over GM, trendy colors, new technology, new partnerships, manufacturers leaving the US, new manufacturers entering the US, etc.
Sneak Peek 2006
Jonathan Fahey On The Automotive Industry
12.20.05, 6:00 AM ET
http://www.forbes.com/business/2005/...utomotive.html
Sneak Peek 2006
Jonathan Fahey On The Automotive Industry
12.20.05, 6:00 AM ET
The Big Trend
Small. Not since the days of the Chevy Chevette will we have seen a small car infestation on the scale that we're likely to see in 2006. In the spring, Honda (nyse: HMC - news - people ) will begin selling its Fit, Toyota (nyse: TM - news - people ) will sell the Yaris and, a couple of months later, Nissan (nasdaq: NSANY - news - people ) will sell the Versa. The Japanese are trying to gain back ground they’ve lost as Civics, Corollas and Sentras have become bigger, more powerful, more luxurious--and more expensive. Hyundai, Kia and especially General Motors (nyse: GM - news - people ), with its Chevrolet Aveo, are dominating the small-and-cheap segment. Here comes competition.
Unconventional Wisdom
Hybrids are more hype than hope. Automakers are rushing to offer gasoline-electric hybrid vehicles in the wake of Toyota’s success with the gas-sipping Prius. It turns out, there are more people out there willing to pay extra to use less fuel than automakers thought. But there won’t be enough to snap up all the hybrids coming. The payoff, even with gasoline at $2.50 a gallon, is not economic, it is merely karmic. Mainstream buyers will just pay $12,000 for one of the small cars newly available (see above) and get 40 miles to the gallon instead of $23,000 for a car that gets 50.
Misplaced Assumption
That the problem with GM and Ford Motor (nyse: F - news - people ) are those greedy unions. GM and Ford have health care and pension burdens that their competition doesn’t. But those burdens were there three years ago, when GM’s stock was more than three times what it is today. That’s when GM was selling at least some vehicles people wanted to buy. The neglect with which the two automakers have treated their brands is almost criminal. The Ford Taurus was once a great vehicle. It is now dead. And just imagine the look you’d get if you went to a cocktail party and told someone you just bought a Buick!
The Watch List
-- Dieter Zetsche. Investors so loved the announcement that DaimlerChrysler (nyse: DCX - news - people ) Chief Executive Officer Jurgen Schrempp would be replaced on Jan. 1, 2006 with then-Chrysler chief Dieter Zetsche that they added $4 billion to the company’s market capitalization. Zetsche will still need to get DaimlerChrysler's disparate parts to work together. But he has proven operational prowess, and the temperament, personality and credibility to get his divisions marching in step--if anyone does.
Bold Prediction
Saturn will rise. GM’s Saturn brand--somehow--is not as damaged as Buick or Ponitac. And a couple of future cars, like the mid-sized Aura and the replacement for the current Ion, look wonderful, both inside and out. With these and future cars coming from GM’s improving Opel division, the brand may eventually make money for the first time in its history.
Small. Not since the days of the Chevy Chevette will we have seen a small car infestation on the scale that we're likely to see in 2006. In the spring, Honda (nyse: HMC - news - people ) will begin selling its Fit, Toyota (nyse: TM - news - people ) will sell the Yaris and, a couple of months later, Nissan (nasdaq: NSANY - news - people ) will sell the Versa. The Japanese are trying to gain back ground they’ve lost as Civics, Corollas and Sentras have become bigger, more powerful, more luxurious--and more expensive. Hyundai, Kia and especially General Motors (nyse: GM - news - people ), with its Chevrolet Aveo, are dominating the small-and-cheap segment. Here comes competition.
Unconventional Wisdom
Hybrids are more hype than hope. Automakers are rushing to offer gasoline-electric hybrid vehicles in the wake of Toyota’s success with the gas-sipping Prius. It turns out, there are more people out there willing to pay extra to use less fuel than automakers thought. But there won’t be enough to snap up all the hybrids coming. The payoff, even with gasoline at $2.50 a gallon, is not economic, it is merely karmic. Mainstream buyers will just pay $12,000 for one of the small cars newly available (see above) and get 40 miles to the gallon instead of $23,000 for a car that gets 50.
Misplaced Assumption
That the problem with GM and Ford Motor (nyse: F - news - people ) are those greedy unions. GM and Ford have health care and pension burdens that their competition doesn’t. But those burdens were there three years ago, when GM’s stock was more than three times what it is today. That’s when GM was selling at least some vehicles people wanted to buy. The neglect with which the two automakers have treated their brands is almost criminal. The Ford Taurus was once a great vehicle. It is now dead. And just imagine the look you’d get if you went to a cocktail party and told someone you just bought a Buick!
The Watch List
-- Dieter Zetsche. Investors so loved the announcement that DaimlerChrysler (nyse: DCX - news - people ) Chief Executive Officer Jurgen Schrempp would be replaced on Jan. 1, 2006 with then-Chrysler chief Dieter Zetsche that they added $4 billion to the company’s market capitalization. Zetsche will still need to get DaimlerChrysler's disparate parts to work together. But he has proven operational prowess, and the temperament, personality and credibility to get his divisions marching in step--if anyone does.
Bold Prediction
Saturn will rise. GM’s Saturn brand--somehow--is not as damaged as Buick or Ponitac. And a couple of future cars, like the mid-sized Aura and the replacement for the current Ion, look wonderful, both inside and out. With these and future cars coming from GM’s improving Opel division, the brand may eventually make money for the first time in its history.
12-22-05, 09:14 PM
#2
Small cars are just the beginning. I think there will be a huge increase in scooters and motorcycles for secondary (and primary) modes of transport, such as Vespas in Europe. San Francisco is the first major U.S. city to see this trend. It's all because of high gas prices and less road space.
Hybrids are great, but people will look for cheaper gas-efficient non-hybrid cars that provide the most amount of power. For example, the Corolla has 38 highway mpg with no hybrid technology, and we all know that the new IS is great with 28 highway mpg at 306 hp. As much as hybrids can provide, some people want to save money by just going with a more simple less technological car.
Hybrids are great, but people will look for cheaper gas-efficient non-hybrid cars that provide the most amount of power. For example, the Corolla has 38 highway mpg with no hybrid technology, and we all know that the new IS is great with 28 highway mpg at 306 hp. As much as hybrids can provide, some people want to save money by just going with a more simple less technological car.
12-22-05, 10:59 PM
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they are right on many points I think.
The unions arent to blame completely for GMs problems, but have some part in the struggle. Lets just say they need to do better to pay for their workers. The reason they are not doing well is because they simply make ugly cars or just cars that no one wants. The design is the first thing they need to address. Why can't the same guy(or team) who designed the beautiful new vette design lower models as well? They need to get there act together. As for saturn, i've seen some of the concepts they talk about and they do look great inside and out, the problem is I doubt they will make anything of that quality. Good looks or not, I still would never drive a saturn. As for hybrids I'd say they aren't worth the premium price, especially when the price outweights the gas milage thats nothing to reallly brag about yet. The future power source for cars is elsewhere, not in hybrids. Being an enthusiast like many here, I'm not driving a hybrid until they can go 0-60 in 5 seconds and get 60mpg at the same time, which just isnt going to happen in my lifetime. Just wait til the owners have to replace those giant batterys in their hybrids, talk about expensive, AAA's are expensive enough.
The unions arent to blame completely for GMs problems, but have some part in the struggle. Lets just say they need to do better to pay for their workers. The reason they are not doing well is because they simply make ugly cars or just cars that no one wants. The design is the first thing they need to address. Why can't the same guy(or team) who designed the beautiful new vette design lower models as well? They need to get there act together. As for saturn, i've seen some of the concepts they talk about and they do look great inside and out, the problem is I doubt they will make anything of that quality. Good looks or not, I still would never drive a saturn. As for hybrids I'd say they aren't worth the premium price, especially when the price outweights the gas milage thats nothing to reallly brag about yet. The future power source for cars is elsewhere, not in hybrids. Being an enthusiast like many here, I'm not driving a hybrid until they can go 0-60 in 5 seconds and get 60mpg at the same time, which just isnt going to happen in my lifetime. Just wait til the owners have to replace those giant batterys in their hybrids, talk about expensive, AAA's are expensive enough.
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