GM "Missed Boat" on hybrid cars
Hybrid cars are just an emotional piece of marketing, according GM vice chairman for product development, Bob Lutz.
"We business-cased it, took a hard, analytical look and thought the engineering and investment were irresponsible vis-a-vis our shareholders," he said. "We failed to appreciate what Toyota has basically treated as an advertising expense."
Really. An advertising expense?
Yet, not only does Toyota maintain that it makes money off every Prius it sells, but that hybrids are the powertrain of the future for Toyota. Additionally, Toyota is also making money off leasing its hybrid technology to Ford, for use in the Escape hybrid, and Nissan will also be using the technology for its Altima hybrid.
Perhaps it might be nice if GM focused on customers, just once, rather than shareholders. GM vehicles are created for customers, not shareholders.
"From a strict business proposition, this is not where we would make an investment," said Lutz. "It's not clear that you'll ever be able to recapture the cost of a hybrid in the pricing. But what we forgot in the equation was the emotional aspect of it."
Hmmmm, Mr. Lutz. I guess the fact that Toyota credits the Prius as a main reason for overtaking more of GM's American market-share wasn't an important consideration in your decision making criteria?
Maximizing profit in the short term, at the expense of the long term doesn't sound like rationale investing.
In hindsight, "we should have said, 'We'll lose $100 million a year on hybrids, but we'll take our advertising budget of $3 billion, make it $2.9 billion and treat it as an advertising expense,' " he said.
"Toyota very cleverly has used hybrids to gain an improved perception of the brand."
Improved perception, Mr. Lutz? Two words for you, sir, Resale Value. Toyota has it, you don't.
"Since we've made a major commitment, I don't want the market to go away."
Why not if hybrids are only a marketing ploy? Why keep wasting 100 million per year on marketing your weaknesses?
It's really pathetic that GM and Mr. Lutz just can't admit mistakes. It took Toyota 9 years to really make the Prius a winner. That kind of innovation and development is certainly not some marketing ploy, it's responsible R&D.
American automakers, such as GM, didn't miss the boat on marketing the perception of a better product, they missed the boat on creating the best automotive products.
That's not what you expect from the world's largest automaker. Of course with that kind of leadership, or lack thereof, GM won't maintain that title for long.
More 2005 Hybrid cars.
"We business-cased it, took a hard, analytical look and thought the engineering and investment were irresponsible vis-a-vis our shareholders," he said. "We failed to appreciate what Toyota has basically treated as an advertising expense."
Really. An advertising expense?
Yet, not only does Toyota maintain that it makes money off every Prius it sells, but that hybrids are the powertrain of the future for Toyota. Additionally, Toyota is also making money off leasing its hybrid technology to Ford, for use in the Escape hybrid, and Nissan will also be using the technology for its Altima hybrid.
Perhaps it might be nice if GM focused on customers, just once, rather than shareholders. GM vehicles are created for customers, not shareholders.
"From a strict business proposition, this is not where we would make an investment," said Lutz. "It's not clear that you'll ever be able to recapture the cost of a hybrid in the pricing. But what we forgot in the equation was the emotional aspect of it."
Hmmmm, Mr. Lutz. I guess the fact that Toyota credits the Prius as a main reason for overtaking more of GM's American market-share wasn't an important consideration in your decision making criteria?
Maximizing profit in the short term, at the expense of the long term doesn't sound like rationale investing.
In hindsight, "we should have said, 'We'll lose $100 million a year on hybrids, but we'll take our advertising budget of $3 billion, make it $2.9 billion and treat it as an advertising expense,' " he said.
"Toyota very cleverly has used hybrids to gain an improved perception of the brand."
Improved perception, Mr. Lutz? Two words for you, sir, Resale Value. Toyota has it, you don't.
"Since we've made a major commitment, I don't want the market to go away."
Why not if hybrids are only a marketing ploy? Why keep wasting 100 million per year on marketing your weaknesses?
It's really pathetic that GM and Mr. Lutz just can't admit mistakes. It took Toyota 9 years to really make the Prius a winner. That kind of innovation and development is certainly not some marketing ploy, it's responsible R&D.
American automakers, such as GM, didn't miss the boat on marketing the perception of a better product, they missed the boat on creating the best automotive products.
That's not what you expect from the world's largest automaker. Of course with that kind of leadership, or lack thereof, GM won't maintain that title for long.
More 2005 Hybrid cars.
Labels: Altima hybrid, bob lutz, Escape hybrid, Ford, Ford Escape hybrid, GM, Hybrid Vehicles, prius, toyota
posted by Dahcredyns at
8:59 AM
1 Comments:
More people should learn about electric vehicles as a solution. "Zero emissions" is something that's going to be required by law one day (you know it will). Making the decision to go electric is far cheaper anyway, like 10 cents on the dollar vs. gas. (source: zapworld.com)
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