JOHN K. TEAHEN JR.

SALES TALES: Auto industry is singing a new song

John K. Teahen Jr. is the senior editor of Automotive News.
Remember "Let's Do It," a Peggy Lee hit of all too many years ago?

If Ms. Lee were still with us, she could get more mileage out of that song today, with different lyrics:

GM plants do it,

Ford plants do it,

Even Honda and Toyota do it.

Let's do it,

Let's build small cars.

Small cars are the darlings of today's U.S. auto market. If you have them, you're in clover. If you don't, you're out in left field, peeking around the fender of an unwanted SUV.

You can't judge the strength of the small-car market by looking at sales figures. The market is limited by supply, not demand. Most small cars roll off the lot as soon at they roll onto it.

To sell a small car, a dealer calls the first name on his waiting list. The big pickups and SUVs sit forlornly off to one side. Nobody wants them. Nobody buys them.

I guess it's bad form for a columnist to say: "I told you so. You should have listened to me." Bad form or not, I'm saying exactly that.

For years, I've written that the truck boom would end and automakers had better have something else to sell their dealers. General Motors, Ford Motor Co. and Chrysler LLC paid no attention. They ignored cars and kept building the big pickups and SUVs that have become a drug on the market.

Word on the street is that the Detroit 3 make $10,000 or $12,000 profit on every big truck. I don't know how much they make; the factories have never confirmed those figures. On the other hand, they have never denied the estimates, either.

Whatever — it's too much money to ignore. The Detroit automakers couldn't pass it up. But they should not have given up on cars for some 15 years, either.

Look at the top import brands. Toyota, Honda and Nissan sell a lot more trucks than they used to, but they haven't stopped developing and selling cars. The Toyota Yaris and the Scion line, the Honda Fit and the Nissan Versa are strong additions.

Toyota has another hottie called the Prius. Why doesn't GM, Ford or Chrysler have a Prius hybrid? They could sell a million of those cars, but they were too busy building big pickups and SUVs. No time to develop a Prius. Besides, it's a car, and they don't do cars anymore.

But don't wear out your arm patting Toyota and Nissan on the back. Both jumped into the big-pickup field, which was not their brightest move. Nissan will be out in 2010, but Toyota has a monster plant in San Antonio that can build 300,000 pickups a year. Toyota will be fortunate to sell half that many Tundras this year.

Small heroes
Top 7 small cars for 7 months
 7 mos. sales 2008% change from 2008
1. Toyota Corolla/Matrix228,9261.3
2. Ford Focus138,64926.2
3. Chevy Cobalt130,66016.4
4. Toyota Prius106,2253.9
5. Toyota Yaris73,30034.1
6. Mazda373,2571.3
7. Hyundai Elantra72,43225.1
Source: Automotive News Data Center and company sources

Words of warning

Amid the headlong dash to get small, fuel-efficient cars on the road, may I offer a few words of warning to the Detroit 3? Don't go overboard.

One of these days, car buyers will get used to paying $4 or $5 — maybe even $6 — a gallon for gasoline. They'll want a little something extra in their vehicles. A little more size, a little more style, a little more power or performance. A little more room, a little more comfort, a higher level of optional equipment.

Maybe they'll even want pickups or SUVs, although I think that craze has run its course.

It will be nice if the Detroit automakers have mid-sized and larger cars to satisfy those desires. Today, it's small cars — and Detroit doesn't have them.

Don't let it happen again. And don't say I didn't warn you.

Egg on my face

When I blow a story, I do a thorough job.

In a July 14 column about auto advertising slogans and tag lines, I mentioned the night Chevrolet spokeswoman Dinah Shore came on stage astride a donkey. Instead of singing her usual "See the U.S.A. in your Chevrolet," she told her studio audience and TV viewers: "There's more than one way to see the U.S.A."

Well, it wasn't a donkey; it was a cow. And Dinah was no longer working for Chevrolet. Chevy had dumped her in favor of sponsoring "Bonanza." Dinah's new sponsor was the American Dairy Association — a cow, see?

Well, at least I had the quote right.

Thanks, Jeff Godshall, for setting me straight. Jeff is a retired senior design manager who worked for Chrysler's product design office. He is head judge of the Eyes on Design car show at the Ford house in suburban Detroit.

Am I embarrassed? You had better believe it.

You can reach John K. Teahen Jr. at autonews@crain.com

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