Best Automotive Business Pract
Survival of the Fittest in the Present Automotive MarketHow Slow and Steady Can Win the RaceThe automobile manufacturing trade presents an interesting and important microcosm of American business as a whole. The general public opinion is that American manufacturing in general is faltering-that decreases in worker productivity and product quality, stiff competition from foreign concerns, increasing domestic labor costs, a diminishing loyalty among consumers for U.S. made products, and other factors are causing a subtle shift in our entire economy. Americans just don't build the best products, or so says the current school of thought, and the future of the U.S. economy lies not in manufacturing, but service sectors. To the casual observer, nowhere is this opinion more valid than in the American automotive industry. It is common knowledge that domestic carmakers are struggling, and have been for decades. Buick Motor Division, and the General Motors conglomerate of which it is a part, once enjoyed unparalleled prestige and rosy prospects for the future. Then, competition and other outside forces reshaped the landscape of the U.S. auto market. Buick and other domestic car companies foundered for over three decades. A few Am
The company was known for innovation, having introduced the industry's first turn indicators, electric windows and the power convertible top. ' Roger Adams describes the Terraza as "a crossover van, with luxury features and the look of an SUV. As a result, third-quarter industry sales data for 2003 indicates that Buick's Rendezvous is on track to sell 80,000 units, close upon the heels of Lexus' projected sales of 87,000 RX330s. Unemployment is high, hovering at over six percent. Current conditions in the American economy as a whole can only be described as volatile and worrisome. Buick sales in the country have doubled every year since 2000, to 110,000 units in 2002-and sales are on track to hit almost 200,000 in 2003, capturing nearly 10% of the market. By 1998, the Shanghai GM partnership was producing a range of Buick models in brand-new production facilities-"the first world-class vehicles produced in China," according to Joseph Liu, Executive Director of GM China. Buicks and Oldsmobiles, in particular, were never very well differentiated. The Japanese company is adopting the opposite strategy as Buick, however, following in the footsteps of Cadillac and many European brands, looking to entice younger buyers. Review of Current Market A review of the current climate in the American automotive industry is in order before any attempt is made to establish Buick's viability as a brand that can survive. Exploiting this opportunity, Buick entered into a joint venture with the Chinese government in 1995 to manufacture and sell cars in that burgeoning market. The Rainier looks attractive but generally unexceptional-an everyday vehicle that looks contemporary without being gaudy or pretentious. Buick Regals competed directly with similar Oldsmobile Cutlasses, which were priced almost exactly alike, built on the same GM corporate G-Body platform, and powered by the same range of engine and transmission options (in fact, both cars usually featured standard Buick V6s, or optional Oldsmobile V8 engines, no matter which brand car you bought. , observed that "as consumers age, their tastes shift from sporty handling and spirited acceleration towards safety, comfort, and value.
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