Better Mousetrap

Mark Cuban weighed in on the US auto makers crisis, and asked a simple question. I also have questions about the US Big Three that I've never understood.

1) Why does GM have so many different brands, with only Cadillac and Hummer the clearly "luxury" brand? Chevrolet, Pontiac, GMC, Saturn, and Buick pretty much sell the same level of car. Ford would have clear, definitive lines with the jettisoning of Mercury- Lincoln, Volvo, Mazda. Chrysler has it almost, but that was based on the acquisition of other brands, like Jeep.

If you don't understand this point, look at the current trend on the other side of the pond. VW and Audi. VW ("the people's car") and Audi used to be clear on where they fit on the economic value of it's respective brands. But now VW quality, design, and price are vying for Audi customers.

2) Why fight the Perception vs. Quality argument? If customers expect a cheap, fall-apart car, provide a car that fit (not meet or match) their expectations, with a little extra. If a whiz-bang car comes out from a manufacturer known to build poor quality cars, the new best thing is going to be looked at skeptically and critically. Do you think anyone would buy an XLR if Yugo built it? Hyundai is a prime example. It's taken years (if not decades) to persuade America that it builds quality cars, inexpensively at that.

3) Why do people NOT buy from the US Big Three? My answer is three-part, and I'm avoiding the Labor/Union/Entrenchment points because I don't know anything about working inside an auto builder.

A) The proliferation of cars in the market. I initially thought that the US offered too many vehicle options, which increased the CODB, but manufacturers offer 15-18 different vehicles. But multiply that by at least 10 to get our buffet line going. Anyone can get anything. Options are endless. Problem is that the US Big Three did little to differentiate the similar offerings though the product line. GMC Yukon is the same as the Chevrolet Tahoe/Suburban. Chrysler Town & Country is the same as the Dodge Minivan. Going back- Olds Cutlass, Buick Regal, Chevrolet Monte Carlo, Pontiac Something (Does it really matter at this point?). Virtually the same. Compare to Toyota and Lexus. Nissan and Infiniti seem to be the most US-like of Japan's Big Three.

B) Americans are more "wealthy" and buy more luxurious cars, or "better" cars- Audi, BMW, M-B, Lexus, Acura, Jaguar, and the supercar realm. Customers are more likely to spend another $10,000-20,000 for a European badge rather than a domestic plate. The perceived quality and prestige is more important than the bump in sticker price.

C) Foreigners are dead sexy. Face it, the amount of options allow for design risks and definable looks as a way to seduce buyers. True, majority of the Japan Big Three sales come from products very similar to each other. Compare the Accord to Camry throughout the years on the design side. Then compare the 3 Series to A4. Other than the Viper, Corvette, Camaro, H1, and Saturn Sky, there is not a whole lot that interests me from the US Big Three. And a lot of people feel that way. I would rather have an A4, Q7, M3, Mini Cooper, Skyline, TSX, RL, Jetta, GTI, DB7, Land Rover, Carrera S, or E350, before I get to my top US Big Three pic.

If I could drive GM for a bit, here are some changes I would make (Since it's easy to be a backseat CEO):

Shift the line-up on value. Cadillac-Saab-Chevrolet-Pontiac-Saturn. Hummer/GMC merge to offer SUVs/Pickups as their line of service. And cut the "exclusivity" price gouging that comes with buying the GMC badge. Buick, bye-bye.

Vehicle offering line-up. Cadillac is obviously the marquee luxury brand for GM. Saab is the trendy "we-have-an-import-brand" diversity project. But the cars are nice. It's a weird fit for GM. Chevrolet quits producing pickups and SUVs, as they go to HummerMC. Corvette, Impala, Malibu, Cobalt, Pontiac's G6 and GTO/Camaro, and Buick's LaCrosse get rolled into the car-only line-up. Pontiac has the real quirky brand, with the Vibe, Aveo, Solstice, G3, and anything else that would look good with a NAPA Hat or Pizza chain on top. Think of Pontiac as the US answer to Scion. Saturn keeps the current offerings, as the new-way-of-doing-business brand. Saturn, with the exception of Sky, is not the best, not the most attractive, but the quality is there to get you from point A to point B.

So there it is, my quickly thought plans. What about Ford? With the exception of the GT40 and Mustang, they build trucks. Cars come with the package. Chrysler? Thanks for the mini-van.

Side-jab commentary- Enough with the stupid "cross-over" term. You're either a station wagon or mini-van. Vans have sliding doors. Wagons have swinging. Embrace who you are! People buy what they like, not what it's called.

And SUVs are derived from 4-door pickups with a canopy. If it has 3rd row seats that face backwards, it's a wagon. Forward- SUV. Afraid of parking garages- SUV.