KEITH CRAIN

Watch out, more brands are coming

COMMENTARY
Keith Crain is editor-in-chief of Automotive News
Related Topics

Last week Fiat Chrysler announced that it will spend billions of dollars to reinvigorate Alfa Romeo into a brand that sells hundreds of thousands of cars.

It seems inevitable that the Chinese will send over some of their brands in the near future to try and wrest sales from existing manufacturers in the United States. It's just a matter of time.

It seems like everyone is here selling cars. But it just isn't so. There are still plenty of European brands absent from our shores that may yet have plans to export vehicles to the United States.

Quite a few have already been here and left, including Alfa. French brands Peugeot and Renault were firmly established here but left with their economic tails between their legs.

Spain's Seat and the Czech Republic's Skoda are a couple of brands that we have never seen. And since they are owned by Volkswagen, odds are we never will.

Russia produces several vehicles. Given the current political environment, chances are slim we will ever see those brands here.

Creating an auto network to sell cars in the United States costs hundreds of millions.

And, unless you're Tesla, you have to persuade quite a few entrepreneurs to invest millions of their own to set up dealerships.

Launching an auto brand is a risky proposition with no guarantee of success. Almost always, it hinges on the product itself, and rarely does a new brand capture a substantial market share immediately. There are notable exceptions, but more likely it takes a lot of slow growth to create an "overnight success."

It wasn't all that long ago that the U.S. market was dominated by the Big 3. Add American Motors and a few Mercedes and VWs, and that rounded out the market.

Since then, we have seen the Detroit 3's market share cut almost in half and American Motors disappear -- except for the Jeep brand. General Motors and Ford Motor have lost some brands, and Chrysler lost both Plymouth and its independence.

Introducing a brand in this market is tough. But sometimes keeping a brand viable is just as tough or tougher.

But in the next 10 years, we'll see plenty of new cars appear in dealerships across the land. Picking winners and losers is the real challenge.

You can reach Keith Crain at kcrain@crain.com.


advertising
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

Or submit an online comment below. (Terms and Conditions)


Newsletters & Alerts
Latest Headlines