A little Economic Lesson - Automobile Industry Style

[B_VinylBoy]

Here's an interesting story that just aired on the news...
Despite the number of auto companies that reported dramatic losses last month, one company actually reported a 14% gain. Apparently, Hyundai pushed a commercial campaign promoting a new assurance program which allows any new buyer of a Hyundai to return the car if they lose their job within one year without incurring any additional costs or interest. I remember seeing the ads air during the Super Bowl myself.

YouTube - Hyundai Assurance Program Spot 1 from Hyundai of St. Augustine
Hyundai Assurance - We've got your back for one full year
Assurance program helps Hyundai get ahead - Cleveland.com

Sure, it's a very small piece of the pie when it deals with the global economy. But I think this illustrates something that most people tend to ignore when it comes to running a business and making money. Here's a business that understood the current financial stress and made an attempt to treat their customers fairly. Hyundai didn't resort to the typical, shady sales practices that everyone has fallen victim to at one time or another. They're not trying to extract every single penny they could from their customer base, nor tried to lock them into an ironclad contract that charged them ridiculous fees and surcharges. The Assurance Program not be a perfect plan, and it probably will have some loophole in it that can be exploited to some level (because these days everything seems to have one). But it does inject enough faith & confidence into consumers to actually buy a car during this crazy time.

More companies, regardless of what they sell, should follow this kind of logic. Make & price their items so that they are more competitive and fair for the consumer. Be willing to tighten the belt and risk losing some profit now so that in the long run you'll have a better chance on survival in the long run. If one company can generate a gain in sales in a market that is supposed to be almost dead, then others can too.

 

[Wyldgusechaz]

Here's an interesting story that just aired on the news...
Despite the number of auto companies that reported dramatic losses last month, one company actually reported a 14% gain. Apparently, Hyundai pushed a commercial campaign promoting a new assurance program which allows any new buyer of a Hyundai to return the car if they lose their job within one year without incurring any additional costs or interest. I remember seeing the ads air during the Super Bowl myself.

YouTube - Hyundai Assurance Program Spot 1 from Hyundai of St. Augustine
Hyundai Assurance - We've got your back for one full year
Assurance program helps Hyundai get ahead - Cleveland.com

Sure, it's a very small piece of the pie when it deals with the global economy. But I think this illustrates something that most people tend to ignore when it comes to running a business and making money. Here's a business that understood the current financial stress and made an attempt to treat their customers fairly. Hyundai didn't resort to the typical, shady sales practices that everyone has fallen victim to at one time or another. They're not trying to extract every single penny they could from their customer base, nor tried to lock them into an ironclad contract that charged them ridiculous fees and surcharges. The Assurance Program not be a perfect plan, and it probably will have some loophole in it that can be exploited to some level (because these days everything seems to have one). But it does inject enough faith & confidence into consumers to actually buy a car during this crazy time.

More companies, regardless of what they sell, should follow this kind of logic. Make & price their items so that they are more competitive and fair for the consumer. Be willing to tighten the belt and risk losing some profit now so that in the long run you'll have a better chance on survival in the long run. If one company can generate a gain in sales in a market that is supposed to be almost dead, then others can too.

In my little part of the world I do exactly that. Absolutely no risk to my customers at all a full money back gaurantee no questions asked. I earned more money in January than I ever have and this month will see a double digit increase in profits over January.

Recession? What recession? Of course I am a conservative and I don't hate my money like liberals seem to. I LOVE my money!!

 

[houtx48]

if the press would get off the dome and gloom kick and let everybody get back to business, with some nice tax cuts, we'd all be better off. period end of story.

 

[B_Nick4444]

if the President would get off the dome and gloom kick and let everybody get back to business, with some nice tax cuts, we'd all be better off. period end of story.

fixed that for you!

tax cuts?!?! closet Republican?!?!

 

[midlifebear]

Vinylboy has my attention:

For a short lucid couple of years back in 1961 and 62 Ford MO CO did something similar. They introduced the now famous center-opening door Lincoln Continental Sedan. It was nothing like a Cadillac and for the first several months in '61 they sold very few of them. The main reason is Cadillac had cornered the market on the idea of a luxury car in the USA and GM also offered 7 or 8 different variations of the same car. Lincoln only had two: a sedan and a convertible. Take your choice. To up sales Ford began to offer a FREE bumper-to-bumper two-year warranty on those old Continentals just to move their inventory off of their Wixom Plant parking lot and sales skyrocketed. The first year they offered the guarantees there was actually a clause allowing the buyer to actually "return" the vehicle, minus mileage/wear and tear. But that clause quickly disappeared without much news coverage. Whether the quality of those old Lincolns was any better or worse than GM's Cadillacs is now moot. It was the idea that Ford would ensure (at least mentally) the success of your purchase.

It also did something else. Ford didn't change the basic design of those Lincolns for 9 years because they actually did put in place (after the fact) a quality assurance program on the assembly line for very little cost to make sure they didn't have to replace anything for the first couple of years of those Lincolns. That quality assurance became a symbol associated with those large barges until they made them bigger (and less reliable) with a completely new restyling and body-on-frame replacement in 1970.

I actually own a 62 Continental convertible in Sultana White with a factory replacement original interior. Of course, it's up on blocks in storage for bringing out occasionally and towing to Hot August Nights in Reno, if I happen to be in the USA for a couple of weeks. I had to reset the timing (original engine, built to run on 100 octane gas) by retarding it to about 8/10 compression ratio and it still runs great on 91 octane unleaded gas as well as averages 20 mpg. However, in all fairness, it's not Detroit's best quality auto from the 60's. Hurtles along real good on I-80 in heavy snows, though.

Ford has been capable of creating automobiles with comparable quality to Toyota's Camray. GM admits to pouring more care and quality assurance into it's line of Buicks mostly sold to the blue haired or bald crowd. You'd think Ford, of all car companies, would get a clue and introduce a buy back or return program similar to Hyundai's. But I'm not holding my breath.

Why buy American if: 1. It's not under a free warranty, 2. The manufacturing quality is poor, and 3. You're going to have to pay for repairs (like the transmission) after 36,000 miles and you're most likely still making payments?

Hyundais are notorious for installing poor quality wiring harnesses that run all of the extra tits and feathers options. But if you were to buy a new one and trade it in every two years they might be a good deal.

Now, if they'd only design a model that cleaned my floors and windows . . . .

 

[B_VinylBoy]

Vinylboy has my attention:

To say that didn't excite me in more ways than one would be an understatement. :redface: :biggrin1:

Ford has been capable of creating automobiles with comparable quality to Toyota's Camray. GM admits to pouring more care and quality assurance into it's line of Buicks mostly sold to the blue haired or bald crowd. You'd think Ford, of all car companies, would get a clue and introduce a buy back or return program similar to Hyundai's. But I'm not holding my breath.

I'm actually surprised that most corporations wouldn't create a business plan with a program like this already devised. That way if a recession does emerge they would be more than prepared to deal with it. I wouldn't be shocked to see a couple of automotive giants actually fold before others try to follow Hyundai's example.

Why buy American if: 1. It's not under a free warranty, 2. The manufacturing quality is poor, and 3. You're going to have to pay for repairs (like the transmission) after 36,000 miles and you're most likely still making payments?

Hyundais are notorious for installing poor quality wiring harnesses that run all of the extra tits and feathers options. But if you were to buy a new one and trade it in every two years they might be a good deal.

To be honest, I've never been the biggest fan of Hyundai. Growing up, we always had Chrysler cars and they lasted for a long time. Right now, I'm a big fan of the Toyota Prius. My partner has a friend who owns one and I recently rode in a cab in New York that was a Prius. The two owners have nothing but great things to say about the car, and the experience was just surreal. If only we had an American car that could rival this at a better price tag.

2009 Toyota Prius Hybrid

 

[HazelGod]

Know what pisses me off about the Prius?

The fact that I can't get an hybrid vehicle tax credit for the one I bought last summer, while people buying much inferior hybrid vehicles still qualify.

Apparently, the geniuses who wrote that energy incentive capped the credit by total number of vehicles sold per manufacturer. So, my 50+ mpg '08 Prius doesn't rate a credit, but some schmuck buying a 21 mpg hybrid Tahoe qualifies. Fucking bullshit.

That said, the car is the shizz...the Mrs. absolutely loves it.

 

[midlifebear]

Hazelgod:

My heart goes out to you. Really, I'm being sincere. A very good business associate of mine (well, not an associate, he's just another member of the same Chamber of Commerce) bought a Cadillac Escalade "flex-fuel" hybrid and got a hybrid vehicle tax credit. Never mind the fact that his new Escalade still averages between 11 and 16 mpg! The hoser!

Yes, something definitely smells.

As for "buying 'Mericuhn", when my father died I had the dubious responsibility of being the executor of his Living Trust. He left behind a Dodge RAM 2500 4x4 Cummins in-line deisel pickup and my mother's 1995 Buick Park Avenue. I rue the day I felt sorry for my brother (who is a complete fuck up) and gave him the Buick instead of insisting he take the pickup. The Buick had a V6 and on long drives it easily averaged between 32 and 35 mpg! Otherwise it averaged 16 mpg in the city. The fabulous Dodge RAM gets 9 mpg no matter if you drive slow, fast, or just leave it parked in the barn!

While waiting around to vote the last week of October until I could return to the southern hemisphere after November 5th, I visited the GM, Ford, and Toyota dealers in Elko and Twin Falls. I don't know what GM engineers did, but the replacement models for the Park Avenue (Lucerne? Named after a Swiss city or a variety of hay?) were smaller with bigger engines and promised reduced gas mileage. WTF?!

Actually, I'd love to still drive around in the big Detroit bulge-mobiles I drove as a teenager. Mom's 1967 Oldsmobile Toronado was an amazing ride (again, about 9 to 11 mpg, but horsepower guaranteed to cause whip lash). Sadly, I'm realistic. And after having been spoiled by owning an Argentine-built Peugeot 406 for the last couple of years I cannot imagine anything more economical and comfortable, except for possibly a Toyoto or a Honda designed to glide the Freeways of Nevada, California, Arizona, and yes . . . even Ewetaw. But it will be years (as in more than 5) before I'll succumb to buying another automobile to drive in the USA.

Oh, and while I'm ranting, check out the following: http://www.youtube.com/watch?v=qFXZT5Ooz4A&feature=PlayList&p=6D136FD2F722583D&playnext=1&index=14

A YouTube commercial for a 1954 Studebaker Commander that was capable of 29.6 miles per gallon? And it had the same 4-cylinder engine block that American Motors ended up using for many years to power a Jeep. Go figure.

 

[vince]

It also did something else. Ford didn't change the basic design of those Lincolns for 9 years because they actually did put in place (after the fact) a quality assurance program on the assembly line for very little cost to make sure they didn't have to replace anything for the first couple of years of those Lincolns. That quality assurance became a symbol associated with those large barges until they made them bigger (and less reliable) with a completely new restyling and body-on-frame replacement in 1970.

Ford has been capable of creating automobiles with comparable quality to Toyota's Camray. GM admits to pouring more care and quality assurance into it's line of Buicks mostly sold to the blue haired or bald crowd. You'd think Ford, of all car companies, would get a clue and introduce a buy back or return program similar to Hyundai's. But I'm not holding my breath.

The Elwood Engle designed Continentals with their clean, understated elegance are true classics. The Cadillacs of the era, with their fins and bloated panels, can not be mentioned in the same breath in terms of styling. The suicide doors are just IT as far as I'm concerned. Engle also rescued the Chrysler Imperial from design oblivion using the same straight clean approach as with the Lincoln.

It's true that when Ford really tries they can produce very high quality cars. The Focus and second generation Mondeo are second to none in their class terms of engineering and build quality. Those are both Ford Europe designs. Too bad they have dropped the ball a bit with the new Mondeo. I was thinking I'd get one, but then when I saw it in the showroom, I was very disappointed. Another design by committee I think.

But yeah, these times call for some outside of the box thinking both in marketing and product design. Those companies that can innovate now, will reap the benefits when the global economy turns around.