How To Destroy a Car Maker

It takes drive and determination to do but there seems to be plenty of that in the American auto industry and maybe even some in the Australian car industry.

It’s well known right round the world that General Motors and Ford in the US are in dire trouble and are struggling to survive. That’s quite a turn-around from the position they were in just a decade or two ago so how did they get to this point?

Seth Godin is a legend in the world of marketing in the US and he had this to say about the causes of Ford’s problems:

“Making cars is not an unprofitable undertaking, unless you insist on make it one. At just about every turn the company ignored the market, alienated their workforce, distanced themselves from their distribution network, vilified their customers and chose short-term expediency ahead of long-term change.

They lobbied to keep gas mileage standards high (doing the opposite would have increased the market for cars). They lobbied to keep SUVs unregulated (and got addicted to a short-term high-profit alternative to cars) and they bought remarkable brands and made them average.

There were hard things they could have chosen to do, things that would have meant change. There were short-term hardships they could have endured to fix their dealer network or reinvent the way they designed and built cars. Instead they stayed inside the Detroit beltway, played the car game, managed the stock price and paid themselves a fortune.”

Now while not all of those points can be applied to the Australian motor industry I can think of several that certainly do resonate with what’s happening here. It will be interesting to watch over the coming months and perhaps as long as a year how Holden and Ford survive seeing they are still pinning their futures on a 6 cylinder model.