Shifting strengths have automakers trading places

As a teen in the '80s, I was a big fan of the movie Trading Places (and not just because of Jamie Lee Curtis).

Characters played by "Saturday Night Live" icons Eddie Murphy and Dan Aykroyd see their fortunes fall and rise as the story explores race and class dynamics as well as commodity markets moved by animal spirits or by unabashed manipulation. The theme of taking on someone else's lifestyle — and what else changes along with it — is kind of playing out in the global auto industry right now.

By the time we learned that Hyundai went the entire first quarter of 2022 without selling a fleet vehicle, it wasn't really a surprise. Having made it through January and February selling every available car, crossover and Santa Cruz at retail, there was little reason to think March would be any different.

But it is a powerful demonstration of the hard-won improvements to the brand's image — backed by years of strong performance in quality studies — as well as the depth of the production shortage.

Whether it permanently rules out the likes of Hertz and Avis, as Honda does, only time will tell. But prioritizing dealers for the limited supply of vehicles is a smart move.

Remember Elon Musk's original Master Plan? "The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model," he wrote in 2006.

From the heights of his dizzying wealth, I'm sure that the Model Y looks like a basic family car, not a luxury-priced vehicle that starts at about $15,000 more than a Lexus RX 450h hybrid crossover. And recently he has de-prioritized making a true mass-market car — suggesting that self-driving Teslas will be the best way to make clean vehicular transportation affordable to the masses.

Enter General Motors and Honda, with plans to offer an electric crossover for less than $30,000 in 2027 — and not just a few to tease the possibility, but producing "millions" of them from retooled plants. While questions remain about range and profitability, this is the kind of product offering that could be game-changing — compelling true mass adoption with a better (for most purposes) vehicle that has a cheaper, easier and cleaner fueling system.

To go from the six-digit GMC Hummer EV pickup to an affordable crossover in about half a decade would be truly breathtaking.

Before Tesla was profitable and its stock was like a highly priced call option, people would ask me why anyone would buy shares. My answer was that it was like the chance to own a piece of Ford before the Model T. Tesla believers could envision the company building dominant market share as the first mover into an emerging technology.

With his latest doubling-down on the profitability of owning a fully self-driving Tesla — not to be confused with a currently-in-beta Full Self-Driving Tesla — he is really saying that the present value of Tesla hinges on being first and best at solving Level 4 or 5 automated driving. And that's probably a harder task than growing to twice the size of Toyota.

Word last week that Volkswagen AG plans to eliminate more than half of its models powered by internal combustion engines as it prioritizes profits over volume was like hearing a familiar poem read with a different accent. VW, which had long aspired to be the biggest automaking group in the world, would be giving up on lower-priced, lower-margin autos that run on gasoline or diesel.

It sounded a lot like post-bankruptcy GM when Mary Barra and Dan Ammann decided it was more important to make money than to pursue scale for its own sake. So the company sucked it up and left the markets where it couldn't compete profitably, such as Europe.

What about Toyota?

Toyota folks, I suspect, would suggest that Toyota is the Ever-New Toyota, which reinvents itself once a century, this time as a software company (and perhaps one involved in real estate or civil services). The alternative is for Toyota — or the Toyota Motor Corp. we've known for decades — to become the new Old GM: trapped by its size and success, the perennial target of institutions and upstarts alike.

Toyota's culture has long been one that creates internal crises to motivate progress in the face of continued success. The aim is to avoid becoming "fat, dumb and happy" — to stay vigilant, humble and hungry.

But can it really trade its place as the biggest, most profitable automaker ever into a similarly powerful role in the future of technology?

Sounds like a story for Hollywood.