"You can buy a Ford in any colour, so long as it's black" --Henry Ford
So who will win the Car Wars?
Smart money is betting Ford Motor Co. will end up among Detroit's Final Three,
even though it's declined to accept any bailouts from governments.
If so, it means that the industry
will end up where it started: cheap and simple. Ford stock has soared since
it fell
this past year to US$1.01 a share and is now US$5.88 a share.
General Motors Corp. has collapsed
over the last 52 weeks from US$24 to a low of US$1.27, and is now US$1.81,
while Chrysler is in the ditch being rebuilt.
Ford's strategy is to return
to its roots. The everyman Ford Fiesta is at the heart of its new "single
Ford" strategy globally.
The company will launch a retooled, compact, no-frills people's car next
year.
But here are some other factoids
that show the road ahead is not bumpy for automobile manufacturing, just different.
- In 2008, amidst the worst world economy since the Depression, 72 million
vehicles were bought.
- In 2008, there were roughly 14 million passenger vehicles sold in the four
BRIC nations (Brazil, Russia, India and China),
or the same number as were sold in North America.
In 2005, the United States outsold the BRIC by 10 million vehicles.
- In April, 2009, China overtook Germany in car manufacturing.
- In 2008, Toyota Motor Corp. overtook GM as the world's largest vehicle
maker.
- In 2008, Volkswagen AG overtook Ford as the world's third-largest vehicle
maker.
- In 2008,Hyundai Motor Co. overtook Renault/Nissan as one of the top 10
largest in the world.
- In 2008, some 65% of all vehicles sold by GM were sold outside North America
-- a trend that could save the company
if it gets the rest of its act together.
- By 2020, China will overtake the U. S. car market in size.
- By 2020, Russia will overtake Germany.
Some 65% of Fiat SpA's net income
in 2008 was derived from emerging markets, mostly Brazil, according to a
Morgan Stanley analysis.
Volkswagen is the market leader
in China and aims to overtake Toyota as the world's biggest.
China has indigenous manufacturers, but they are in joint ventures with U.
S., European and Japanese giants.
Tata Motors Ltd. of India is
the biggest innovator with its US$2,500, four-seater Nano and unique business
model for
the emerging economies.
The conclusions are pretty obvious.
The North American market has become saturated with vehicles and the
Great Recession means that the size of the pie will remain permanently smaller
as Americans keep their cars longer
rather than buy new ones. The only way to increase demand is to embark on
a grants-for-guzzlers scheme,
as Germany and Britain have undertaken, to get the low-mileage clunkers off
the road.
More likely, supply will be decreased
to meet the lower demand, which means that Detroit is well-advised to
impose a moratorium on all manufacturing for a year or even more, based on
how quickly the inventories are bought.
