Blog: Petite cars become big players
Dave Leggett | 18 August 2008
Even Toyota is experiencing problems in North America and has resorted to playing 'musical factories' there to adjust its manufacturing footprint in line with changed demand for particular models. There is a structural shift taking place in the market which impacts everyone, shining corporate stars and laggards alike. Big trucks and SUVs are clearly not the thing to be big in, going forward.
I guess the game for the OEMs is to make the necessary adjustments as quickly as possible to be big in the product areas that are becoming hot. In this respect, Detroit has further to move than the Asians and will incur more pain in making that adjustment - and that's been happening.
But Ford and GM are realising that they have some important strengths to play to. They can call on their considerable global resources to help make that adjustment happen and there was a speech by Mark Fields last week describing Ford's medium-term strategy that illustrated the scale of the shift taking place. It is absolutely what Ford needs to be doing and it obviously needs to get the execution spot on with its upcoming small cars.
Mr Fields also referred to the need for Ford's small cars to be stylish in order to appeal to a new breed of buyers - the 'Millennials'. They are a growing demographic and are tech-savvy, placing value on things like connectivity and digital radio. Again, Ford illustrated that it is planning for the future in thinking about what its new small cars need to have to appeal to these customers.
Mark Fields certainly talks a good game and the annual Traverse City auto execs golfing get-together in August is the perfect setting for that. The proof of the pudding, as ever, will be in the eating. And the cars themselves will be one part of the story. Ford also has to have a decent profit margin on them.
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