"Joseph Gwinn" wrote in message
...
In article ,
F. George McDuffee wrote:

On Sat, 29 Nov 2008 12:06:47 -0500, Joseph Gwinn
wrote:

Holman Jenkins asks a very good question: Why is it that the Big Three
automakers can make cars profitably everywhere in the world but the US?

http://online.wsj.com/article/SB122765959966358461.html

The Wall Street Journal, 28 November 2008.

Joe Gwinn
--------------
Everything but the real problem is discussed.

In point of fact, every man, woman and child in the US now
owns/registers slightly more than one vehicle [1.05], a vehicle
being a car or light truck, not counting motorcycles/scooters.

You can see the estimated 2007 per capita car and truck ownership
by state at http://www.swivel.com/data_sets/spreadsheet/1003554
I have sorted and analyzed this data and would be pleased to
supply you a copy in M/S xls format.

Several points:

(1) To put it bluntly, THE REASON DETROIT AND THE TRANSPLANT
CAR COMPANIES CAN'T SELL MORE VEHICLES IN THE UNITED STATES IS
BECAUSE WE ALREADY HAVE MORE VEHICLES THAN WE NEED.

Umm. Please stop shouting. We can hear you.


Individuals
and families in highly congested urban areas (with higher
incomes) such as New Jersey, New York, and Washington D.C. don't
have [multiple] vehicles because these are not particularly
useful. ==It would make just as much sense to "rescue"
agriculture by attempting to get everyone to eat more.==

[rest snipped]

Cars wear out. Cars last something like seven years on average, maybe
ten years for some kinds, and are replaced. (Yes there are cars that
can be babied to last forever, but very few people really do that, or
even want to.) So all car companies in the west (where essentially
everybody has a car) are fighting over the replacement stream. They are
not waiting for the population to suddenly double, and never were.

Joe Gwinn

What George describes is the reason that every major car manufacturer is in
China. It's the really big growth market. The US market is a replacement
market, and the only way to grow is to grab a bigger market share or to
create a new product category.

This is alien territory for US car makers. Like all oligopolies, they
succeeded in the past by holding onto a percentage of the market, or a
market share, and only competing at the margins. They grew because
everybody's market slice got bigger, not because they grabbed a bigger
market share.

The SUV market is (was?) a case of opening a new product category and
battling over market share once again, like they did in earlier days with
cars. It cannibalized the car market but it was OK because SUVs were much
more profitable.

With that product category on the ropes, and with foreign competitors each
battling for a share of the car market in the US (what do they think this
is, a real market or something?), the Big Three are unequipped to cope. The
Chebby Volt is an attempt to create another new product category. It's
either that, or move to China.

The smart money says "move to China."

--
Ed Huntress