Can Toyota Digg its way out of recall crisis?
This story by Thomas Mucha originally appeared in GlobalPost.
As Toyota careened from one recall crisis to the next, the contrast was almost funny.
In one corner, we had pure Kabuki theater — a highly-stylized corporate drama playing out on the world stage.
At a hastily-called news conference in Nagoya on Feb. 5, Akio Toyoda — Toyota president and grandson of the company’s legendary founder Kiichiro Toyoda — bowed deeply in remorse before a gaggle of Japanese photographers. He then, dutifully, uttered phrases like “personal responsibility,” “deeply regretted,” and “very sorry.”
Finally, Toyoda announced a new “taskforce” under his control to look into quality problems, and skedaddled.
It was everything you’d expect from a Japanese mea culpa (minus the ritual suicide) — stoic, very public and, of course, entirely predictable.
from Shop Talk:
Auto show-Click and buy? Not yet…
(Written by correspondent James Kelleher)
The U.S. auto retail market -- long controlled by franchised dealers and state laws that critics call anti-competitive and inefficient -- will open up in the coming years and Honda will not be left in the dust, a top U.S. executive for the Japanese automaker said.
Honda has already been confronted by the new paradigm in the retail motorcycle market, where upstart rivals from rapidly emerging nations have begun selling bikes directly to consumers -- or very nearly so -- using sporting goods stores and other unconventional channels, John Mendel, executive vice president of auto sales at American Honda Motor Co, said at a conference held in conjunction with the Detroit auto show.
"What we're trying to prevent is someone doing to retail automotive what Blockbuster did to the video store and what Netflix has done to Blockbuster," Mendel said at the Automotive News World Congress.
He emphasized that dealers, protected by state franchise laws that in some cases make it a criminal offense for a manufacturer to sell a vehicle directly to a consumer, would remain an important part of Honda's distribution strategy.
But in a world where consumers are now able to order whatever they want on the Internet and have it delivered the next day, Mendel said the prognosis for the traditional sales process, which can include hours of paperwork at the dealership after the customer makes a purchase decision and can tack on thousands of dollar in extra costs, was not good.
"We haven't cracked the code," he said. "But we know someone is ultimately going to change it."
from Shop Talk:
Auto show-Super Bowl TV ads don’t score for Mazda
Advertising during the Super Bowl doesn't score for Mazda.
While the Japanese automaker plans to boost its marketing budget this year as it launches the Mazda 2 small car, running TV ads during the National Football League's championship game in February won't happen.
"You're never going to see us on Super Bowl," Mazda North American chief Jim O'Sullivan said at the Detroit auto show. "We're not going to spend that kind of money on that kind of property because, yeah, you get a lot of impressions and stuff out there, but the fact of the matter is, do you really get to the target you really wanted? That's more of a feel-good ad for a lot of people."
O'Sullivan said it was a "given" that Mazda's media budget will be up in the first quarter, as well as for the year, although he didn't say by how much. He said Mazda, which expects its U.S. sales to possibly rise faster than the overall market this year, will spend more on social media and digital advertising this year as it tries to reach younger buyers for its late summer launch of the new 2 model.
However, O'Sullivan said advertising on the Super Bowl -- where Korean automakers Hyundai and Kia, and Germany's Volkswagen will advertise this year -- is more about the creativity of the spots than the product or service being sold.
"The one thing about the Super Bowl too, if you're going to go and do ads at the Super Bowl, you better make sure you got some very good creative because you'll get criticized for your ads if you don't have very strong creative," he said. "So is it about selling cars or is this an agency's competition? They're memorable in some cases, but that's a very expensive property."
"I'd rather take those resources and go where our customers are and focus on what our brand is," O'Sullivan added.
CES: Ford’s Mulally digs hands-free, in-car Pink Floyd
Here’s Ford CEO Alan Mulally getting excited about the new MyFord Touch in-car tech system, launched today at CES.
First attempt cut short by lack of Internet access. He’s not the first CEO bedeviled by tech problems at the show, after a power cut delayed Microsoft CEO Steve Ballmer’s keynote on Wednesday evening.
Second take shows successful launch of hands-free Pandora Internet radio. Pretty cool, despite choice of dinosaur-rock station.
Ad spending down 14 percent – but it’s not getting worse!
Over the last few days executives at Goldman Sachs’ Communicopia have talked about a stabilizing — or even improving — advertising market.
It’s not the only time they’ve talked about stabilization. It was the watchword of investors calls as far back as last spring. And it appears they were right. New figures out from TNS Media Intelligence show the advertising market wasn’t any worse in the second quarter than it was in the first.
That’s cold comfort considering the data show that advertising spending in the second quarter sank 13.9 percent from a year ago. For the first six months of 2009, spending is down some 14.3 percent from a year ago, or more than $10 billion in lost TV spots, print ads and radio jingles.
Here’s how TNS research guru Jon Swallen described it in a prepared statement:
While it’s tempting to interpret this as a positive indicator that things aren’t getting worse, the fact remains that the market has been steadily tracking at around 14 percent declines for several consecutive months and this represents billions of lost revenue. Early data from third quarter hint at possible improvements for some media due to easy comparisons against distressed levels of year ago expenditures.
The worst hit category for the first six months was automotive, with spending down 31 percent. Others that fared poorly (to nobody’s surprise) included financial services, down 24 percent; miscellaneous retail, down 18 percent; and travel & tourism, down 15 percent. Housing related advertising, which covers several categories, tumbled 29 percent.
And the prize for the worst media sector over the first six months goes to… radio. Spending on those pesky radio ads fell 24.6 percent, a touch more than newspapers at 24.2 percent.
Great, thought-provoking post.Great article here! Very clear and informative; well written and I can see you put a lot of time and effort into it. Good job! Looking forward to reading your next post…
Frankfurt Motor Show tickets going once… going twice…
Some say the Frankfurt Motor Show, which started on Sept. 15, has lost a bit of its lustre amid the crisis that has hit the global car industry with an economic baseball bat. But there are still people out there who are willing to shell out the big bucks to go see the new car launches. One lucky bidder, identified only as i l on www.ebay.de paid 158 euros ($232) for two tickets to get into the car show today, days before other mortals are allowed to pass through the big white doors leading into the halls of the show. There are 150 separate auctions for tickets to the car show, with sale prices starting at 7 euros for tickets valid on the days that are open to the public, which start on Sept. 19. So it looks like there are still plenty of people out there who are just wild about cars even though the government has to pay tightfisted consumers to buy a new one with their cash for clunkers programme. Would you pay that much to get a glimpse of what the automotive industry has in store before others can?
Frankfurt Motor Show features babes and beasts
Photo by Edward Taylor
The Frankfurt Motor Show is bustling with scantily clad models in high, high heels who present carmakers new models. Volkswagen‘s Skoda decided against the models and opted for a more furry mascot. To present its new 4×4 crossover Yeti model, it hired the abominable snowman! Mom is never going to believe this…
car manufacturers have decided to bring little more than metal for the Frankfurt Motor show this year….
Better days ahead for Sirius XM?
Sirius XM Radio has reason to be excited about the success of the cash for clunkers program. The satellite radio operator, which posted quarterly results this morning, raised its income outlook for the year on a potential rebound in car sales.
Chief Executive Mel Karmazin said on the earnings call that he was cautiously optimistic that auto industry sales will pick up in the second half of this year.
After all, any increase in car sales translates into more subscribers for Sirius XM, which gets most of its new users from satellite radios built into cars.
Investors have been optimistic about Sirius’s stock all this week, given the launch of its iPhone software and the government’s Car Allowance Rebate System, which lets people trade in their old vehicles for rebates on new, fuel-efficient cars. Reuters’ Franklin Paul wrote on Tuesday:
The U.S. government’s popular “cash for clunkers” incentive program has added spark to the idea that auto sales may rebound after a four-year decline. By allowing people to trade in old vehicles, the program has lifted industry-wide sales back above 11 million units on an annualized basis.
What’s more, Barrington Research analyst James Goss told Paul that Sirius converts about half of its users who get trial accounts when they buy a car into paying customers.
Now, only time will tell whether the optimism lasts, both in the beleaguered U.S. car industry and among Sirius shareholders.
I can’t believe this company is doing very much “right”. I am a perfect example of future churn and lost customer forever. I had a Sirius S50 which failed several times. Sirius sent me a refurb Sportster 4 (with no disclosure or agreement) and included a boom box in the package. I was so impressed I decided to keep the s50 active and paid to have BOTH UNITS. The Sportster also was not dependable, intermittently cutting out for the first 10 or 11 months, and that unit finally quit altogether (I purchased an extra antenna which didn’t help). The S50 had given up the ghost a couple weeks earlier, so I called Sirius. They were not helpful, and I asked if I could just cancel and was told I could, WITHOUT OWING ANY ADDITIONAL MONEY. They deactivated my account, and then BILLED MY CREDIT CARD $66.53; they were obliviously unconcerned when I called them about the failure to disclose this impending charge.Now I’ve bought my wife a new car which has XM installed; MANY soliciting mail and phone calls started right away, but nobody would even listen to my concern that Sirius/XM might not be a company I wanted to do business with because no human being would call me back about that charge. All the high prssure sales persons would do was to repeatedly read from a company “pitch line”, totally ignoring that I wasn’t a happy former customer. I now have one deactivated XM radio in a new car, and two broken Sirius radios in the closed for which I will never trust the service provider enough to do business with.
Axed Porsche CEO tries Robin Hood tactics to bolster blue collar image
Germans love to see the mighty fall just a little bit more than the rest of the world, and freshly ousted Porsche CEO Wendelin Wiedeking is a perfect candidate. Yes, he made tiny, almost bankrupt Porsche successful again but did he have to be so smug about it? And was he really worth the millions of euros he raked in every year in a country where executive pay is a thorny issue? His salary, which made him the best paid German manager by far, was a topic of endless fascination in the German media. Wiedeking never divulged how much he made but unapologetically said he deserved what he earned — estimated to have been 80 million euros last year. Even before his dismissal was official, speculation swirled about how extraordinary his severance payment would be, with some putting the figure at 250 million euros. In the end it was less but still a handsome sum of 50 million euros, considering he leaves Porsche with a huge mountain of debt. As Wiedeking climbs off the throne, he is eager to burnish his blue collar credentials and in Robin Hood style announced he would donate what’s left of his payment after taxes to charity. Some of it will go to a foundation for Porsche staff, some into projects to create new jobs and, in a final swipe at his critics, he promised to give to a charity for “elderly and suffering journalists”. Take that, hacks.
Steve Ballmer’s “awesome” new Ford hybrid
Times are tough for car makers, so Ford’s CEO Alan Mulally is going the extra mile by delivering cars to customers himself.
Unfortunately you have to be CEO of a very large company to qualify. Here’s Microsoft’s Steve Ballmer taking possession of his new Ford Fusion Hybrid at the software company’s Seattle-area campus.
“This is awesome!” Ballmer declared, before climbing into the car for a quick seminar on how it works. He didn’t seem too interested in the fuel consumption figures, but said his wife insisted on a hybrid.
The car was the millionth with Ford’s SYNC system — powered by Microsoft technology — which allows you to control a phone and play music with voice commands. So people in the back seat can embarrass you by shouting “Play Abba”.
The high-octane double-act of Ballmer and Mulally — CEO pitch-men par excellence — seals an interesting alliance between Seattle and Detroit. Ford’s Mulally lived in the Seattle area in his 30-plus years at Boeing’s nearby commercial plane operations, while Ballmer’s father — who raised his family in and around Detroit — was a long-time Ford employee, starting in the company’s financing unit in 1950.
The Fusion Hybrid is beautiful. Can’t say the same for the Prius & Fit.
Toyota might take a page out of Jaguar’s book. Several years back Jaguar offered its lease owners the opportunity to obtain a brand new Jaguar at the same monthly cost and no extra money required. I asked them why? and they said that sales were not good and they wanted to keep production up. The new and used cars were given a two-year complete service contract (no service charges for two years). This might help Toyota over its current problem. Bob Baker, Playa del Rey, California, USA