DodgeIntrepid.Net Forums banner
1 - 1 of 1 Posts

3,652 Posts
Discussion Starter · #1 ·
From the Detroit Free Press:

GM quickens car rollouts, study shows

Detroit carmaker could tie Toyota in new products

July 12, 2006

Detroit-based General Motors Corp., which is considering an alliance with Renault SA and Nissan Motor Co., is expected to tie Toyota Motor Corp. between 2007 and 2010 in the newness of its showroom lineups, an independent analysis shows.

GM and Toyota are expected to have an average showroom age of 2.8 years in that period, which ties the industry average.

"I think the biggest takeaway here is that GM's product cycle is in better shape than it's been in a long time," said John Murphy, the Merrill Lynch auto analyst who wrote the report on automakers' product plans.

GM spokesman Tom Wilkinson said the report shows "our success in executing" a strategy to get more new models to market faster.
Merrill Lynch's annual study, released Tuesday, estimates the age of automakers' car and truck lineups and what percentage of their sales volume is being replaced with new vehicles. That helps predict sales and financial performance.

Gauging the age of vehicle lineups is critical for investors, dealers and suppliers. That's because automakers that have gained the most market share in the last decade have been those with the freshest vehicle lineups, or youngest average showroom age.

"Historically, Detroit has replaced its lineup about every 8 years, while the competition has done so about every 5 years -- one of the main reasons that Ford, GM, and Chrysler have lost share," the report says.

Automakers keep most product plans secret. The Merrill Lynch report is based on hundreds of primary and secondary sources, including industry contacts, suppliers and trade publications. "I certainly admit there is some standard level of error, but we think that is ... consistent across the board," Murphy said. "We think we're pretty accurate."

The analysis has GM showing big improvements and Chrysler Group keeping up its solid performance. "Over the next four model years GM is replacing 75% of its product lineup, which is ahead of the industry average," the report says.

Toyota is replacing the most in the industry -- 83%.

As a result of GM's improvements, Murphy expects "the rate of GM's market share loss to slow over the next four model years, especially relative to the last two years. This should help drive higher utilization rates as capacity is taken out. As a result, we believe there is potential upside to our estimate of GM's profitability, and more importantly the market's expectation."

Meanwhile, the news at Dearborn-based Ford Motor Co. is not nearly so bright, despite projections from executives there that the company's Way Forward turnaround plan will accelerate product development and lower showroom age by 1.6 years by early 2008. The automaker has said it will stabilize and grow market share.

"I clearly don't believe that," said Murphy, who estimated Ford's showroom age over the next four years at 3.5. "Ford is in a very tough period at least for the next 24 months."

His report adds: "We expect Ford's market share losses to continue, potentially at an accelerated pace."

Ford spokeswoman Sara Tatchio said Ford is installing a product development system that will launch new cars and trucks faster. While she wouldn't give Ford's internal number, she disagreed with Murphy's estimate that Ford would replace just 60% of its model lineup of the next four years. That is well below the industry average of 70%.

"Our goal is clearly to slow the rate of decline and then stabilize market share," Tatchio said. "Eventually we think there is potential to grow it."
Other findings in the report include:

DaimlerChrysler AG is well poised for the future.
"DCX has done a great job with new model introductions recently and will continue to do so over the next four years resulting in a low average age of just 2.4 years, which is actually better than the Japanese OEMs in aggregate" 2.8 years, the report says of original equipment manufacturers.
The fast-paced industry gets even faster as the pace of new product launches gains speed

"Intensified competition and the resulting new products are, of course, fabulous for consumers, who will enjoy an unprecedented choice of new cars and trucks."

Automakers will scramble to compete in this dog-eat-dog industry, which will require them to maintain and increase their research and development spending to keep up.

Some foreign rivals are expected to show some weakness.

"Honda is surprisingly below average over the next four years as only two of its three high volume products are being introduced, the Accord and Odyssey," the report says.

"Korean (automakers), Hyundai and its sister company Kia, are hitting a dry patch in their product cycle and are lagging the market. This is more typical of their historic boom-bust cycle than expected and may put a damper on recent share gains."
1 - 1 of 1 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.