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@Zagnut27

Fca is awesome at commoditized cars via a commoditized brand.....in Brazil/latam. Because they have the scale economies, the cost structure, the subsidies from governments, etc. They more than earn their cost of capital over several business cycles in that part of the world.

However the same has NOT been true in europe nor in the usa. It is NOT about the willingness to invest over long stretches of time. It is (a) the paucity of time (b) and elevated cost structure and (c) in many cases severe deficits of scale economies.

I.e., cannot earn cost of capital over a full business cycle.

Ie., do not have luxury of longterm, since it would'v been dead by then or....merged. Contrary to the moralizing on allpar daimler occupation or not: chrysler corp was necessarily prone to bankruptcy (ie not earning cost of capital over full market cycle , running out of time and money). As was gm. As is ford. As was fiat group before marchionne in 2004. As was PSA before french govt bailout and one by a chinese state firm 'investor' just a few years ago, etc.
But yet, the ONLY reason Stellantis has no vehicles in those "commodity" segments is because they didn't properly invest in them in the past.
Plus the whole "commodity" idea is nothing more than an excuse. Even in those markets, buyers are often very brand loyal - especially to Toyota who earned it and didn't have a CEO denigrating the people who designed and built the cars, denigrating the product, and even the people that wanted to buy them (though that may have been someone else in the corporate structure). The excuse of "low margins" only is valid in a static analysis. It ignores the goodwill lost and the abandoned future purchases coming from brand loyalty squandered.

The problem IS long term. The thinking was short term. The former FCA took a not-so-great situation (DCX and Cerberus small cars) and made it worse.
By failing to exist in the "commodity" segments, how many life long customers are lost to Toyota and others? The myth is they'll go to Toyota for the Corolla then come back to FCA (now Stellantis) for the pickup truck, minivan, or SUV. But they often don't They're gone - driving around in a Sienna, Tacoma/Tundra, or a 4Runner/Sequoia.

It reminds me of the old saying "If you don't have time to do it right, when will you have time to do it over?"
 

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But yet, the ONLY reason Stellantis has no vehicles in those "commodity" segments is because they didn't properly invest in them in the past.
Plus the whole "commodity" idea is nothing more than an excuse. Even in those markets, buyers are often very brand loyal - especially to Toyota who earned it and didn't have a CEO denigrating the people who designed and built the cars, denigrating the product, and even the people that wanted to buy them (though that may have been someone else in the corporate structure). The excuse of "low margins" only is valid in a static analysis. It ignores the goodwill lost and the abandoned future purchases coming from brand loyalty squandered.

The problem IS long term. The thinking was short term. The former FCA took a not-so-great situation (DCX and Cerberus small cars) and made it worse.
By failing to exist in the "commodity" segments, how many life long customers are lost to Toyota and others? The myth is they'll go to Toyota for the Corolla then come back to FCA (now Stellantis) for the pickup truck, minivan, or SUV. But they often don't They're gone - driving around in a Sienna, Tacoma/Tundra, or a 4Runner/Sequoia.

It reminds me of the old saying "If you don't have time to do it right, when will you have time to do it over?"
If you are talking sedans like Camry and Corolla in my humble opinion that had been easily over ten years in the making by the time FCA abended these products. I don't think they could have caught up. That train had left the stations a long time ago and neither Ford nor GM seem to be serious player there either anymore. I doubt Malibus are "flying off the lot". The only reason a Chrysler branded Peugot sedan might sell ok is that there is not much offering in that market anymore and some people might want to drive something other than a Camry, Accord or Sonata. Profit margins for entry models are probably slim and once you get into the mid thirties now you are facing a lot more competition.
 
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Any company or brand can succeed in a given market segment if they are willing to invest the time, money, resources, etc in order to get there, and be willing to maintain it over time in order to build the reputation. The top players in the "commodity" market didn't get there over night, they did their due diligence, over time to get there and stay there.

And no offense to anyone here, but referring to automobiles as commodities is just ridiculous. Commodities are resources, cars are manufactured products. Business-speak is all about the latest catch phrase or term, and people make big bucks pedaling this BS, but for the most part it's just recycled nonsense...IMO.
I have to agree about calling cars commodities is ridiculous. It suggests two things to me:

B school graduates who think cars are like textbook widgets, interchangeable commodities like pork and wheat. Cars don't work like that.

A general condescending attitude toward the $20K to $29K cars that the lower middle class buys. Actually Mustang and Camaro are far closer to commodities than the top selling compact and midsize FWD cars. 1.5T vs NA 2.0-2.5 and 2.0T vs NA 3.5-3.6 are big choices.
 

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If you are talking sedans like Camry and Corolla in my humble opinion that had been easily over ten years in the making by the time FCA abended these products. I don't think they could have caught up.
And I guess SUVs like Cherokee vs RAV4? Where does the argument end?

I remember when people said Chrysler couldn't make a competitive small car, either. Then they made the only American small car to earn a real profit. There were some issues - all worked out by 1998.

I remember when people said Chrysler had given away the large car market. Then came the LH.

I remember when people said Chrysler had given up on trucks (which they had) and couldn't come back into that market. Then came the 1994 Dodge Ram.
 

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I have to agree about calling cars commodities is ridiculous. It suggests two things to me:

B school graduates who think cars are like textbook widgets, interchangeable commodities like pork and wheat. Cars don't work like that.

A general condescending attitude toward the $20K to $29K cars that the lower middle class buys. Actually Mustang and Camaro are far closer to commodities than the top selling compact and midsize FWD cars. 1.5T vs NA 2.0-2.5 and 2.0T vs NA 3.5-3.6 are big choices.
I think the better analogy would be appliances, instead of commodities. Commodities are the basic building blocks...agricultural products, minerals, coffee, etc. They can be interchangeable. They‘re not complex, manufactured goods like automobiles. Automobiles are more like appliances, some variation based on capability and such which accounts for different pricing points, as well as differing perceptions of quality, value, and reliability.

And appliances is exactly how many people view their vehicle. A means to get from A to B, with safety and value being considerations. Yet if these vehicles were truly commodities, they could be interchangeable...which clearly they’re not. How many consumers rate a Toyota in the same way they rate a Chrysler? Which do you think the majority of the population will consider first? How many would not even look at a Chrysler? Maybe it’s not a fair comparison, considering Chrysler only has a minivan and a sedan that’s so old it might as well be a dinosaur.

Appliance brands are thought of in the same way, with some being considered more reliable and with better quality. Some will only consider one brand or another, and not others. They’re not necessarily interchangeable.

If the public considers your automobiles to be commodities...interchangeable and nondescript...nothing to distinguish them from anyone else’s vehicles....then you’re doing something very wrong.
 

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And I guess SUVs like Cherokee vs RAV4? Where does the argument end?

I remember when people said Chrysler couldn't make a competitive small car, either. Then they made the only American small car to earn a real profit. There were some issues - all worked out by 1998.

I remember when people said Chrysler had given away the large car market. Then came the LH.

I remember when people said Chrysler had given up on trucks (which they had) and couldn't come back into that market. Then came the 1994 Dodge Ram.
Very true and Chrysler has had a lot of success with reinventing itself like with the examples you gave. I guess it does take the right people to take the risk to try something new again and that has been missing the past 5+ years.
 

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Very true and Chrysler has had a lot of success with reinventing itself like with the examples you gave. I guess it does take the right people to take the risk to try something new again and that has been missing the past 5+ years.
Talking to myself here for a moment. :) I followed Commodore and Atari quite a bit through the eighties and a company like Commodore obviously was trying to have another C-64 home run. By the nineties the market had changed too much. Is this what the EV market is doing to the auto industry? But Dave listed very good examples on how you can regain market acceptance through innovation and bold products. Over time I do think it can get more challenging though. Having true car guys like Lutz in your leadership team might help.
 

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Talking to myself here for a moment. :) I followed Commodore and Atari quite a bit through the eighties and a company like Commodore obviously was trying to have another C-64 home run. By the nineties the market had changed too much. Is this what the EV market is doing to the auto industry? But Dave listed very good examples on how you can regain market acceptance through innovation and bold products. Over time I do think it can get more challenging though. Having true car guys like Lutz in your leadership team might help.
Lutz was all very well, but his main thing was knowing when to step out of the way. He didn't let everything go to his head. Being a "car guy" was very secondary to that. What Chrysler needs is not so much "car guys" as people who understand people, or at least people systems. Lee was a marketer, as I recall - Townsend, an accountant - WPC, a railroad man by training and experience (though by then, he'd already rescued a few car companies and been a leader at GM). WPC knew he needed to basically give the Three Musketeers whatever support they wanted or needed, and get out of their way. Townsend presided over the muscle cars and European expansion - SIMCA was hardly a "car guy" acquisition but it made tons of money and without that purchase, Chrysler would not have made it to 1985.
 

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Lutz was all very well, but his main thing was knowing when to step out of the way. He didn't let everything go to his head. Being a "car guy" was very secondary to that. What Chrysler needs is not so much "car guys" as people who understand people, or at least people systems. Lee was a marketer, as I recall - Townsend, an accountant - WPC, a railroad man by training and experience (though by then, he'd already rescued a few car companies and been a leader at GM). WPC knew he needed to basically give the Three Musketeers whatever support they wanted or needed, and get out of their way. Townsend presided over the muscle cars and European expansion - SIMCA was hardly a "car guy" acquisition but it made tons of money and without that purchase, Chrysler would not have made it to 1985.
"Iacocca graduated with honors from Allentown High School in 1942, and Lehigh University in neighboring Bethlehem, Pennsylvania, with a degree in industrial engineering."

Lee Iacocca - Wikipedia

"Chrysler began his career as a machinist and railroad mechanic in Ellis. He took correspondence courses from International Correspondence Schools in Scranton, Pennsylvania, earning a mechanical degree from the correspondence program."



Townsend was an accountant and left the company in need of loan guarantees. "In December 1960 Townsend was named administrative vice president of Chrysler, in effect running it on a day-to-day basis, and on 27 July 1961 he became its president, the first "bean counter" to hold the job—that is, his background was in numbers rather than manufacturing." "Chrysler (as well as various other American manufacturers) had become more concerned with numbers than with product."

Townsend, Lynn Alfred | Encyclopedia.com
 

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Yes, Lee was educated as an engineer, but he tells you in his autobiography that he left engineering pretty quickly. He did not rise up through the ranks of Engineering. WPC had essentially the same resume - educated as an engineer, rose up through management.
 

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Yes, Lee was educated as an engineer, but he tells you in his autobiography that he left engineering pretty quickly. He did not rise up through the ranks of Engineering. WPC had essentially the same resume - educated as an engineer, rose up through management.
The engineering mindset influenced their management decisions, something you just don't get with someone only trained in accounting.
 

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The engineering mindset influenced their management decisions, something you just don't get with someone only trained in accounting.
Except if you look at Lynn Townsend, you get some very clever management decisions that helped the engineers. (And of course other ones that were kinda inane, just as you did with Lee.) I don't think being a "car guy" or being an engineer are necessarily more important qualifications than others, though I will say GM has done pretty well under their current engineer and did poorly under their past few accountants. I think part of the question is how they choose the CEO or President.
 
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