Domestic passenger car production?

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1,808
Location
South Dakota
If a product isn't selling or is otherwise unprofitable, why build it/sell it? It looks like domestic passenger car production is pretty much going to be a thing of the past.

I live in a pretty rural town in south central South Dakota. Population less than 2500. The next town of any size, population 25k, is 70 miles away. We are fortunate to have 3 dealerships in our small town. Ford, Chevrolet, Dodge. Because we are rural, we draw from a large area of smaller communities for whom we are the shopping center.

It would seem to me that foreign car companies have an opportunity to pair with domestic dealers to offer their brand of passenger car for sale. I'm not opposed to buying a foreign car, I just don't want to have to drive two hours to get it serviced. Which would most likely be the case if I owned a foreign automobile.

The other option would be for foreign car companies to open dealerships in rural areas and start producing pickup trucks.
 
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Messages
2,765
Location
Kentucky
The foreign car companies building trucks has been tried, that ship has sailed. The "foreign" trucks are usually built in the US to avoid the chicken tax. Usually the result is a relatively low volume model compared to the big three. Nissan and Toyota are still in the game, but they sell a fraction of the trucks that Ford/GM/RAM does.

Dealerships will pop up wherever there is demand. If there's no Toyota, Nissan, et al, dealer near you, it's likely because they wouldn't be profitable in that location.
 

otis24

Thread starter
Messages
1,808
Location
South Dakota
Once domestic passenger cars are no longer produced, the consumer looking for a passenger car will have no choice but to turn to foreign producers, thus an upswing in profits. Add in that trucks and SUVs are inherently more expensive to purchase, operate and maintain. Not everyone can afford them. Passenger cars can be a cheaper alternative. The Dodge dealer here has historically kept a good variety of newer pre-owned foreign automobiles. It just sucks that the nearest servicing dealerships are 1.5 to 2 hours away! Independent mechanics won't touch them. They lack the tools and diagnostic equipment.

If the Ford dealership, for instance, sold and serviced Hyundai passenger cars, I think it would be a win-win for both companies.
 
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18,446
Location
Michigan
I think GM plans to hold on to the Malibu for at least the near future. I’ve already seen some Ford folks who normally get Fusions/ Taurus which are almost gone switching to Chevy when their lease ends n 6-8 months, I think they will pick up sales just based on that. Catch is the Malibu won’t see any updates......

You know sedans are a dying market when even Toyota and Honda are looking at cutting a sedan model or too.....
 
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13,182
Location
ROCHESTER, NY
FORD had/has 3 passenger cars/sedans that individually outsell the MUSTANG but still chose to cancel production of those 3 cars(Fusion soon) for the North American market and keep the Stang.

SUVs is where the profits are and I think that the Aisin market will see this in time as well. However, the Aisin sedan sales are better than the domestic sedan sales and still quite popular & profitable even though those sedan sales are falling to their own SUV sales but at a slower rate.

Pick up truck sales are booming as well. FORD, GM & RAM in that order. Although RAM(in some monthly sales) outsell GM. And RAM outsells NISSAN & TOYOTA truck sales combine.

Mazda is a hurting car company with sales falling like a rock. Most journalist say that Mazda's are the best cars that no one buys. There are other individual cars e.g., from Cadillac(not picking on Caddy) that is suffering from the same thing. The take rate being so low that those cars are being cancelled. Meaning that, they're great cars that no one is buying.
 
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47
Location
Newport, RI
As the fuel economy has improved in trucks and crossovers, they have become a more viable alternative to cars. Also people like the addtional room that crossovers have and the better visibilty due to the higher ride height. I would agree that there is still a market for traditonal cars.
 
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2,778
Location
Illinois, U.S.A
Mazda is a hurting car company with sales falling like a rock.

With the exception of 2019, they’ve maintained a spread of 30k, selling between 290-320k annually between 2015-2018. Looking at their 2020 sales, they’ve been up over 2019 every month except the three main COVID months (Mar-May) which saw reductions for all auto sales.

I don’t think we can say they’re a hurting brand. Low volume, sure. But hurting? Not quite.

OP, market penetration in a rural market is a tough trick. The domestics have typically had a presence in these rural areas for decades. In doing so they’ve established their foothold on the area. Unless an existing dealer chooses to sell a domestic name (which is kind of what you’re saying), getting a new party to invest and launch a local competitor is an extremely risky proposition. Throw in the fact that Sedan sales are shrinking across the board, and you’re setting yourself up for a loss.
 
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13,182
Location
ROCHESTER, NY
I realize that Mazda is not a high volume sales company in the grand scheme of vehicle sales in the US and this isn't a knock against Mazda as we've owned them and like'em very much and they certainly build a nice vehicle.

Mazda sales have reportedly been down 7.2% for 2019(278K units) compared to 2018(~300K units). Yeah, 320K units in 2015 was a good year for Mazda in the US and probably(w/o doing more research), their best year...EVER?...in the US.

As Nissan was urged by the Japanese government to acquire Mitsubishi, Toyota may be urged to acquire Mazda according to some media sources. . .This doesn't make the statement true but, certainly rumored.
 
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16,546
Location
...
Part of Mazda’s troubles is that many markets in Asia have slowed way down in the last several months as lockdowns were enforced. This has affected all the Japanese automakers as they either stopped production or slowed way down. Even Toyota has closed a couple of production facilities.
 
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2,778
Location
Illinois, U.S.A
As Nissan was urged by the Japanese government to acquire Mitsubishi, Toyota may be urged to acquire Mazda according to some media sources. . .This doesn't make the statement true but, certainly rumored.

I didn’t know that about Nissan and Mitsubishi, helps explain how they’re still sticking around. I swear every year I tell myself it’s the last year Mitsubishi will be sold here and every year I’m proven wrong.
 
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16,546
Location
...
I didn’t know that about Nissan and Mitsubishi, helps explain how they’re still sticking around. I swear every year I tell myself it’s the last year Mitsubishi will be sold here and every year I’m proven wrong.


The story on Mitsubishi is a fascinating one. Nissan reported Mitsubishi for fraudulent claims on fuel economy. Their stock prices plummeted and Nissan swooped in and bought them.
 
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11,211
Location
USA
Peugeots and Citroens might be for sale at the local Dodge dealer soon

Also, captive imports have a long history. Chrysler seems to be the king of captive imports, but Ford and GM have done it, too.
Examples:
Pontiac Vibe (Toyota Matrix)
Chevy Aveo (Daewoo)
Chevy Optra and Epica (Daewoos sold as Chevys in Canada; they were sold as Suzukis in the US)
All of Geo's cars (the Tracker and Metro were Suzukis; the Prizm was a Corolla; they also imported Isuzus)
Ford Festiva and Aspire from the 90s (both were Kias)
78-83 Dodge Challenger (Mitsubishi)
Chrysler sold lots of Mitsubishis in the 80s and 90s. DSM
The first Mercedes sold in the US was sold as a Studebaker
Hyundais were badged as Dodges in Mexico
 
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Messages
2,314
Location
Juno Beach FL
FORD had/has 3 passenger cars/sedans that individually outsell the MUSTANG but still chose to cancel production of those 3 cars(Fusion soon) for the North American market and keep the Stang.
I suspect that the 3 passenger cars/sedans you mention are losing money on each unit sold. Additional sales means even more money lost. Stop production and the bleeding stops after the fixed costs of a shutdown are paid.
 
Messages
485
Location
Virginia, USA
The idea behind buying a “foreign” car is to avoid the trips to the dealer. My Japanese built Subaru has required a total of two trips to the dealer in 140K miles, one complimentary TSB repair (at 104K miles) and one recall. My Ford required 17 trips to the dealer in 86K miles before I dumped the POS, 4 recall trips, two trips because of leaking window seals, two trips for failed fuel injectors, one failed spark plug, two bad wheel bearings, three trips for various failed front suspension components, two trips for failed rear springs, and one trip for a failed radiator fan.

Now most “Japanese” cars are actually made here or in Canada and have much higher quality standards than their “domestic” equivalents. My friends new Buick is actually made in Germany and has required two trips to the dealer in under 10K, mainly to get parts installed that were supposed to be included in his trim package that the factory forgot to install.
 
Messages
11,211
Location
USA
I suspect that the 3 passenger cars/sedans you mention are losing money on each unit sold. Additional sales means even more money lost. Stop production and the bleeding stops after the fixed costs of a shutdown are paid.

Those three cars may be more profitable than the Mustang since they share parts with other cars and crossovers in Ford's lineup. The Mustang has its own platform and doesn't share many parts with other Fords. Their biggest money loser is the Transit Connect cargo vans, which have a 25% tariff (imported from Spain).
 

otis24

Thread starter
Messages
1,808
Location
South Dakota
The problem with the automotive business right now is small "economy" cars that are loaded with amenities/options. Crossovers, generally speaking, are much more expensive. Eliminating cars/sedans may very well eliminate an entire segment of "new car buyers". And that would be those with marginal incomes and credit who need reliable transportation with the benefit of a warranty. In the mid to late 2000's (2007-2013), I was in car sales. We were able to get many buyers in a new Cobalt or similar cars. Basic, reliable transportation for the working man. I think that if the push is to go to crossovers and SUVs, a working man's model with fewer amenities and a more affordable price needs to be an option.
 
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36,293
Location
ME
We were able to get many buyers in a new Cobalt or similar cars. Basic, reliable transportation for the working man. I think that if the push is to go to crossovers and SUVs, a working man's model with fewer amenities and a more affordable price needs to be an option.

If the economy legitimately goes south, they'll make plain-jane "America" trim lines for the working man, if they can't otherwise sell cars and have idle manufacturing capacity.

They're bluffing that won't happen. Used car prices are sky high now.
 
Messages
2,765
Location
Kentucky
The problem with the automotive business right now is small "economy" cars that are loaded with amenities/options. Crossovers, generally speaking, are much more expensive. Eliminating cars/sedans may very well eliminate an entire segment of "new car buyers". And that would be those with marginal incomes and credit who need reliable transportation with the benefit of a warranty. In the mid to late 2000's (2007-2013), I was in car sales. We were able to get many buyers in a new Cobalt or similar cars. Basic, reliable transportation for the working man. I think that if the push is to go to crossovers and SUVs, a working man's model with fewer amenities and a more affordable price needs to be an option.

I agree with that sentiment. At some point the 30-50k+ price tags on most new vehicles can no longer be sustained. Folks with modest incomes have been priced out of the new car market and have gone to used and certified preowned.

I remember back in the 80s and 90s your average Joe working a blue collar job could afford a new car, a decent one at that, not just a Chevy Spark.

I’d certainly like to see the sedan come back, I much prefer them over a crossover.
 
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