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GM Spirals the Drain (Part 2)

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  • #121
    Rather, I think lack of distribution is an advantage to a new car company. They are not forced into legacy arrangements.

    Brand loyalty is of course an issue. But that's a problem for all newcomers in an established industry.
    I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

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    • #122
      Rather, I think lack of distribution is an advantage to a new car company. They are not forced into legacy arrangements.


      There is a happy medium. Nobody's arguing that GM having 5 times as many dealerships as Toyota is a good thing for GM.

      Brand loyalty is of course an issue. But that's a problem for all newcomers in an established industry.


      It is a bigger issue the bigger the purchase size. It doesn't cost me much to try a new type of cereal. It costs a whole hell of a lot to try a new type of car (specifically discovering things which are not apparent on first inspection like vehicle reliability, service/repair quality/cost and resale value).
      12-17-10 Mohamed Bouazizi NEVER FORGET
      Stadtluft Macht Frei
      Killing it is the new killing it
      Ultima Ratio Regum

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      • #123
        Originally posted by KrazyHorse
        There is a happy medium. Nobody's arguing that GM having 5 times as many dealerships as Toyota is a good thing for GM.
        More than that, Toyota has it's own legacy relationships. They just aren't as harmful as GM's. Who's to say that the traditional franchised dealership model in North America is the right one?

        It is a bigger issue the bigger the purchase size. It doesn't cost me much to try a new type of cereal. It costs a whole hell of a lot to try a new type of car (specifically discovering things which are not apparent on first inspection like vehicle reliability, service/repair quality/cost and resale value).
        It might surprise you, but for certain people, even a car purchase of several hundred thousand dollars is a purchase on a whim.
        I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

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        • #124
          And that's why starting a specialty/luxury car manufacturer is likely a lot easier than starting a mass market car company.
          12-17-10 Mohamed Bouazizi NEVER FORGET
          Stadtluft Macht Frei
          Killing it is the new killing it
          Ultima Ratio Regum

          Comment

          • #125
            You haven't backed up your assumption that you can't scale a car company from specialty/luxury to mass market.
            I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

            Comment

            • #126
              Who's to say that the traditional franchised dealership model in North America is the right one?


              Nobody's yet found a better means, as far as I can tell. Maybe one day people will buy their cars from auto supermarkets, and people like carmax are starting to try to do this, but it's not yet the norm.
              12-17-10 Mohamed Bouazizi NEVER FORGET
              Stadtluft Macht Frei
              Killing it is the new killing it
              Ultima Ratio Regum

              Comment

              • #127
                Originally posted by DanS
                You haven't backed up your assumption that you can't scale a car company from specialty/luxury to mass market.
                I'm not assuming that. It's simply indicative of the type of hurdles you have to clear. And explains why starting a car company is a long, slow, treacherous process.
                12-17-10 Mohamed Bouazizi NEVER FORGET
                Stadtluft Macht Frei
                Killing it is the new killing it
                Ultima Ratio Regum

                Comment

                • #128
                  Nobody's found a better means of selling new cars, but so few have tried in the last 80 years.

                  There has also been a dearth of car startups for many decades. You can say precious little in the absence of test articles.
                  I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

                  Comment

                  • #129
                    A luxury/specialty car startup will cost you about $140 million nowadays. That is well within range of many fortunes, if there is motivation.
                    I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

                    Comment

                    • #130
                      Originally posted by KrazyHorse
                      Are you arguing that airlines are more capital intensive than car companies? Or just noting an isolated fact?


                      I am making fun of the assertion that airlines do not need continual outflow of cash in order to keep operating.
                      No one said that what was said is that airlines are A LOT less capital intensive. So much so that it isn't even a comparison.
                      Try http://wordforge.net/index.php for discussion and debate.

                      Comment

                      • #131
                        Originally posted by KrazyHorse
                        Embraer jets suck. I have never once been on time while flying on an Embraer. Plus they are the only direct competition to Bombardier in much of the NA regional jets market so I have to have hometown hatred for the Brazilians.
                        To play devil's advocate, the E-170/190 jets are much better than the CRJ jets.

                        When I fly back/forth to NYC they're almost always on one of those, and there's no time-difference for me but the Embraer jets have noticably wider seats, more headroom, and the windows are larger and not placed absurdly low to the ground.
                        "The issue is there are still many people out there that use religion as a crutch for bigotry and hate. Like Ben."
                        Ben Kenobi: "That means I'm doing something right. "

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                        • #132
                          Originally posted by Oerdin


                          No one said that
                          Yes, you did.

                          First you made a statement about capital intensiveness. Then you made a statement about cashflow which was ridiculous.

                          12-17-10 Mohamed Bouazizi NEVER FORGET
                          Stadtluft Macht Frei
                          Killing it is the new killing it
                          Ultima Ratio Regum

                          Comment

                          • #133
                            Is Vanguard, Kidicious?

                            Comment

                            • #134
                              Originally posted by TCO
                              Is Vanguard, Kidicious?
                              No, I am not Kidicious.

                              Jeez, I've been a member of this forum since the day it opened. Pretty easy to find out. All you have to do is look at my profile.
                              VANGUARD

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                              • #135
                                Beauty avatar, DanS.
                                (\__/)
                                (='.'=)
                                (")_(") This is Bunny. Copy and paste bunny into your signature to help him gain world domination.

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