GLG News by Brake and Friction Components Experts

Michael KowalskiConsultantMichael Kowalski

The Next Battle of the Automotive Wars

December 21, 2006

Analysis of:America's Line In The Sand | www.forbes.com

Toyota will soon introduce a new full sized pickup truck aimed squarely at the remaining sweet spot in the automotive market still dominated by Detroit automakers. They are actively trying to emphasize the "built in America" image for their new vehicle to appeal to the loyal customers of Detroit’s offerings. This marks the beginning of a new battle between Detroit and Japan and the outcome will determine if Detroit companies will continue to be major players in the automotive business.

Michael KowalskiConsultantMichael Kowalski

The Future of Automotive Powertrain Design is in a major state of Flux.

December 15, 2006

Analysis of:Survey Predicts Higher Fuel Costs, Gradual Technology Shifts | wardsauto.com

Automotive power train technology is going through a period of very rapid development. Similar to the struggle at the beginning of the last century, the outcome is uncertain and will take perhaps several decades to sort out all of the technical and business issues. About one hundred power train experts were surveyed on their thoughts on this evolving technology and the results are reported in this article published by Wards Automotive. The implications are that these developments will tax the capabilities of all of the automotive manufacturers and perhaps result in significant changes in their business models.

 

Michael KowalskiConsultantMichael Kowalski

How will the Chinese Automotive market develop?

November 29, 2006

Analysis of:Too Many Chinese Cars, Too Few Chinese Buyers. So Far. | www.nytimes.com

The Chinese automotive market is dynamic and growing rapidly. It is being driven by the plans of its Communist government for a major Chinese vehicle export business, the growth of domestic automotive manufactures not controlled by the state, and by the ambitions of global automotive companies to participate in this huge market. This is a complex mix of economic pressures. If the Communist government can permit a stable and open market, the desires of all three factions may be met.

Michael KowalskiConsultantMichael Kowalski

Excess Automotive production Capacity-More Stress for Detroit

November 24, 2006

Analysis of:North American Automotive Production Capacity to Peak in 2008 | wardsauto.com

If the assembly plant forecasts of Wards AutoWorld magazine analysts are accurate than even with the announced plant closings, there will still be substantial excess capacity in 2008. This foreshadows increased stress for Detroit automakers. The impact on each of the big three is different, but all suffer from a lack of "hot" product in the passenger car market. Thus in addition to the restructuring efforts on the businesses, Detroit automakers also need to be"restructuring" their product offerings.

 

Michael KowalskiConsultantMichael Kowalski

There is one Detroit Automaker who may benefit from an "Alliance"

November 20, 2006

Analysis of:Time Ripe for DC to Consider Third Partner | wardsauto.com

Thus far "alliance" discussion with Detroit automakers have been a bust, probably for good reasons. However I think the both Daimler Chrysler and Nissan Renault are under pressure on a number of fronts. These pressures could drive them to consider a partnership for reasons discussed in my commentary.

Michael KowalskiConsultantMichael Kowalski

Managing Unsold Vehcile Inventory

November 13, 2006

Analysis of:Chrysler's inventory casts long shadow on Detroit | news.yahoo.com

Unsold dealer vehicle inventory is a recurring problem for automotive manufactures. The problem appears when customer demands change rapidly, in sometimes unexpected ways. The traditional remedies, cutting back on production and offering special customer incentives are expensive and sometimes they just prolong the problem. A new business model in needed to eliminate the problem.

Michael KowalskiConsultantMichael Kowalski

What is the market for "small" cars?

November 8, 2006

Analysis of:The Plot Against Small Cars | www.forbes.com

Detroit automakers have had a problem producing and marketing small vehicles. As Mr. Flint points out in his article, the big three have assumed that small cars have small profits. They also assume that UAW staffed assemble plants can not produce small vehicles in a cost-effective manner. He also notes that Americans have shown a preference for larger vehicles, perhaps as a result of the limited and weak offerings coming out of Detroit. The big question is why have the Japanese and now Korean (and perhaps soon to be Chinese) automakers been so successful in this market segment.

Michael KowalskiConsultantMichael Kowalski

China should not be Ford's First Priority!

November 2, 2006

Analysis of:Bill Ford Jr.: For Auto Makers, China is the New Frontier | online.wsj.com

The Chinese automotive market is growing and is attracting many major automotive manufacturers. I am sure that Ford would very much like to participate in this market to keep up with its competitors. However it is not an easy place to start up major operations, given the tight controls exerted by the Chinese Communist government. Given the time and capital necessary to become a significant player in China, I think Ford would be better served by focusing its resources on its home market and returning the company to profitability.

Michael KowalskiConsultantMichael Kowalski

Managing unsold vehicle inventory is the next competitive arena for Auto-makers

October 27, 2006

Analysis of:Flush Inventories At Auto Dealers Might Vex Detroit | online.wsj.com

Ideal automotive retail inventories requires a delicate balance between meeting changing customer desires and minimizing the cost associated with these unsold vehicles. The important point is not how the inventory is counted, but rather how it is managed. The big three auto-makers are trying to reduce their costs to return to profitability. There are limits to what can be achieved by this strategy. I think another strategy that can be pursued is to build to retail customer orders. The manufacturer who is capable of that feat and can deliver a vehicle in a time that is acceptable to the retail customer will have a strong competitive advantage and will see significant cost saving as well.

Michael KowalskiConsultantMichael Kowalski

GM should continue to benefit from the growing Chinese market!

October 23, 2006

Analysis of:GM sales accelerate in China | www.freep.com

The Chinese automotive market is hot and rapidly growing (at least compared with other global market areas). General Motors is benefiting from this growth and while the same rate of increasing sales becomes more difficult as the volume increases, I expect GM to continue to do well. The long term status of this market hinges on future plans and actions of the Chinese Communist government. They are ensuring the creation of a strong domestic capability to design, engineer, and produce automobiles. Their goals clearly involve exportation of large numbers of Chinese produced vehicles. The long term future of non-Chinese automotive manufacturers in China is a great unknown.

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