Monday, June 08, 2009

Urban Dwellers and Detroit's Future

Coeruleus asks whether preferences among customers of car sharing car services can be considered market indicators. If so, Zipcar CEO Scott Griffith gave Detroit some bad news in an appearance on CNBC last week:
We are not buying GM and Chrysler cars. In fact, we have never bought a GM or Chrysler product.
I don’t know that urban dwellers who don’t actually buy cars should be considered a significant market segment. But many of these folks will eventually will buy cars, after spending their early adulthood driving Japanese hybrids. Many young urban dwellers decamp for the suburbs when they start families, and when they do can be expected to need to own more cars. If they have grown accustomed to Japanese cars, then they can hardly be expected to switch to U.S. brands without having ever actually driven one.
As I wrote recently in the Guardian, the automaker formerly known as the Big Three used to build their strategies around providing cars to satisfy every buyer:
In Detroit's glory days, GM, Ford and Chrysler offered a full range of products, from small starter cars to big luxury vehicles. They had a strategy of moving their customers up through their product lines, from entry-level compacts to station wagons to luxury sedans. Forty years ago, my grandparents had two GM cars in the driveway: a Cadillac and a small Corvair.
But in the 1970s, Detroit began to lose market share for entry-level vehicles. When I was growing up, we had a VW Beetle sitting next to the Ford or GM station wagon. Detroit's small cars ranged from whimsical (the AMC Gremlin) to dangerous (the fire-prone Ford Pinto).
Detroit abandoned this strategy years ago when auto executives discovered they could make easy money selling pickups and SUVs, and forgot about capturing young drivers with affordable cars.


Blogger msmarian said...

The current issue of "Wired" magazine has a couple very insightful articles on car manufacturers and how the US companies haven't kept up. Worth a trip to the library to read.

8:26 AM, June 09, 2009  
Blogger Tom Noyes said...

Leave your car keys in your pocket. I found three articles in Wired about the auto industry:

10:11 AM, June 09, 2009  

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