How expensive is gas?

RACastanet · Post by **RACastanet** » Sat May 22, 2004 2:28 pm

Impossible... How can this be? Maybe good products and service?

From J D Power:

"The customer retention rate for Chevrolet is the highest in the industry, according to the J.D. Power and Associates 2003 Customer Retention StudySM released recently.
The inaugural study measures the ability of nameplates to retain their owners who are once again in the market for a new vehicle. On average, the study finds that about one-half of consumers will repurchase the same nameplate.

Chevrolet ranks highest in customer retention, retaining 60.8 percent of its owners. Chevrolet models with the strongest retention rates include the Avalanche, with 74.5 percent of owners purchasing another Chevrolet model, TrailBlazer (73.8%), Impala (70.1%) and Silverado 1500/2500 (68.7%).

Chevrolet is followed in the ranking by Toyota (59.3%), Mercedes-Benz (58.7%), Ford (58.1%) and Honda (57.1%). Isuzu trails the industry, retaining only 3.5 percent of its customers."

More:
"Chevrolet is an example of a broad product line that offers customers many options to fit their needs," said Joe Ivers, partner at J.D. Power and Associates. "While manufacturers tend not to expect each of their brands to retain customers 'for life,' many have realigned themselves through mergers and acquisitions to accumulate a portfolio of brands that give customers a place to move up as they age and become more affluent. However,
manufacturers vary in the degree to which they have integrated their brand portfolio into a coherent cross-brand strategy."

Here is the full story:

http://www.roadandtravel.com/newsworthy ... ention.htm

Rich

Bill Glasheen · Post by **Bill Glasheen** » Sat May 22, 2004 2:35 pm

Yes, Hyundai is doing a good job on quality now. They forced themselves into it with the warranty. Chrysler did the same thing over 20 years ago when it introduced its 7 years/70,000 mile warranty.

BINGO!!!

It may be in the price of the overall fleet but it is there. Nothing is free. Companies are in the business of making money. You are naive to belive it is free.

Rich, Rich, Rich... Didn't Jack Welch teach you anything? Ever wonder why he required his upper management to be six sigma black belts?

Quality drives cost. Do it right the first time, and you can SAVE money. Fewer recalls. Fewer warranty fixes. Better customer satisfaction, which leads to increased market share, which leads to savings via economies of scale. That all turns into cost savings.

Longterm warranties is a way a company can show they MEAN quality, and have skin in the game. If the final price is low as it is for a Hyundai or a Toyota, or even relatively speaking for the Lexus luxury brand - then that says it all.

The biggest "problem" with these quality vehicles is that they retain their value. Resales are high, so Joe Sixpack ends up buying a "broke-assed" pickup truck made by...

what is the MSRP of the Lexus? Not in the $20,000 range. How about $40,000 or more

Lexus is a luxury brand, although one of the greatest values in the luxury brand market.

Compare apples to apples. The Lexus 330 vs. 400 is the luxury SUV (midsize) segment. Why should someone who chooses to buy a car in that class be forced to pi$$ money away at the gas pump? The RX400 gets better gas mileage than any car in its class, and got a 20% increase in power to boot. And all indications are that the quality should be top notch.

A Prius is in the small, economy car segment, along with a Camry or a gaggle of other vehicles. It's a great deal overall for a struggling family.

The Escape is in the small SUV segment (nonluxury). Same segment as the top-rated Subaru Forester, which has phenominal quality and is incredibly inexpensive. And yes, we own one of those...

You keep saying the same things, Rich, and I keep telling you the same responses back...

RACastanet · Post by **RACastanet** » Sat May 22, 2004 2:45 pm

Bill said: "Rich, Rich, Rich... Didn't Jack Welch teach you anything? Ever wonder why he required his upper management to be six sigma black belts?"

Yes, I believed in Mr. Welch. And yes, building in quality reduces cost and keeps customers coming back. However, warranty is a cost in the price of every product. It is not free. There is also a 'liability' cost in the price workup.

Toyota may choose to sell the Prius below actual manufacturing cost to build its market share. they can do that, but if they make wrong assumptions, the company loses. In the US, that means the shareholder loses, a big no-no. US publicly owned companies ultimately report to the shareholders.

So Bill, are you going to buy the new Lexus soon? Henrico tax on that should be over $1,000 annually. And you think gasoline is expensive?

Rich

RACastanet · Post by **RACastanet** » Sat May 22, 2004 2:49 pm

By the way, just mailed the check to the county for my killer Tahoe property tax... it was $75.84. I can buy a lot of gas with the difference between it and the Lexus.

Rich

Bill Glasheen · Post by **Bill Glasheen** » Sat May 22, 2004 3:20 pm

Rich

You are NOT reading my posts.

A Tahoe is not in the luxury SUV class. Chevrolet is not a luxury brand; it should instead be compared to Toyota. And Toyota is able to retain brand loyalty through life without creating myriad options. That's selection, and not quality driven.

Compare the Caddilac line to Lexus.

Maybe you ought to consider what that property tax is going to be on the Ford Escape. Or the Toyota Prius. And then consider his gasoline costs, and the costs of that vehicle, and the tax deductions he gets.

And as for the cost of putting skin in the gain once you design for six sigma, consider also the profits you get from customers willing to pay MORE for your brand because of quality Ever wonder why you were able to retire early, Rich? It's because of the performance of GE stock. Jack Welch and company were able to get people to pay MORE for the GE brand name because people wanted the convenience and dependability that comes with quality. That meant more for the bottom line. That meant more for the shareholders. That meant Rich is now happily retired as a young buck.

I'm jealous... But grad school was worth it for me.

Here's something to consider. Let's do an apples to apples comparison on this too.

* Check out what the average percent profit is on a Chevrolet vs. a Toyota. Make sure you pick two vehicles in the same class (look in a buyer's guide magazine). I think if you did the research online (Edmonds) and/or shoped around (online or on the street), you will find that many Toyotas are going for list whereas you get considerable rebates and discounts with the Chevrolet. That's partially a function of what the Toyota dealer is able to get away with in the final deal (percent of MSRP) vs. the Chevrolet dealer. I think the difference here might surprise you.

* Check out the 5 year resale value of a Toyota vs. a Chevrolet (same class vehicle), as a percent of new vehicle MSRP. There are places online where you can do this. The difference between a Toyota and a Chevrolet is pretty scary!

Do the same exercise with a Chevrolet vs. a Honda. Or a Cadillac vs. a Lexus. BTW, Honda and Lexus both make hybrids...

- Bill

Post by **gmattson** » Sat May 22, 2004 4:39 pm

with 140,000 miles is still running like a new sports car. I can't justify getting rid of it, in spite of the fact that two people at my gas station have been after me to sell it to them! (and offering me more than I paid for it!)

I get around 35 mpg average city/highway use.

Think my next car will be a Chevy?

RACastanet · Post by **RACastanet** » Sat May 22, 2004 6:27 pm

Bill said: "Compare the Caddilac line to Lexus."

OK... they are 1-2 in the latest JD Power three year reliability survey. And a close #2 at that.

Chevy trucks last forever (almost anyway). No Japanese nameplate full size truck exists that has been around as long as hundreds of thousands of Chevy, or Ford for that matter, that are on the road today. the Japanese can only dream of having an installed operating fleet like that. And that is where the profits are.

Bill said: "Check out what the average percent profit is on a Chevrolet vs. a Toyota."

If you compare true bottom line profitability of the companies, the US wins hands down every time. Most Japanese and Korean vehicle manufacturers have balance sheets that would get the CEO ousted in the US. Perhaps individual cars are profitable, but Japan Inc, or Europe Inc, or Korea Inc have never had todeal with US style shareholder capitalism.

Rich

Ted Dinwiddie · Post by **Ted Dinwiddie** » Sat May 22, 2004 8:51 pm

I'd a lot rather push the envelope of technology and be a world leader in doing so than put the best military in the world at risk of being killed on the battlefield and in the liberal media. Starve 'em, I say. Let them ride camels!

Precisely!!

How much research and development could be funded with the amount of money this Iraqi adventure has cost us? How many young men and women in uniform should die for the oil boys that put that dolt into office? I'm no Democrat, I assure you, but the ignorance and amazingly poor decision-making in the current administration has me becoming increasingly steamed.

Bill's statement above reflects common sense as well as good strategic thought. There is precious little of that in American politics these days.

BTW, what's this E85 fuel I keep hearing about? 85% ethanol or something? They can make that stuff from CORN, among other things. The basis of diesel fuel can be grown, too! We (America) are one of the most productive agricultural powers ever to exist yet we send some of our best and brightest to die for something we should not even need.

rant off, I think I'll go have a nice porter...

Gene DeMambro · Post by **Gene DeMambro** » Sat May 22, 2004 9:14 pm

Repost later when my pics get uploaded to ImageStation....

RACastanet · Post by **RACastanet** » Sun May 23, 2004 12:55 am

I heard a report today that we import the same amount of petroleum products from Canada as we do the Middle East, about 20% of our total consumption. How come you guys up there are not helping your friends from the south out?

Hmmm.... an invasion to the north would be simple and solve our energy problems.

Rich

RACastanet · Post by **RACastanet** » Sun May 23, 2004 12:57 am

"BTW, what's this E85 fuel I keep hearing about? 85% ethanol or something?"

Yep, 85% ethanol.

Many of the new GM vehicles are set up to run on it.

Rich

Guest · Post by **Guest** » Sun May 23, 2004 1:24 am

RACastanet wrote:Hmmm.... an invasion to the north would be simple and solve our energy problems.

An invasion would be cool, remember drink the water not the petrol. The best thing about an invasion is you guys would bring all kind of cool weapons here that my government won't allow me to buy,

Do you think it would be okay if the marines went back to the m1 for the invasion?

But remember IF you invade us we will insist you take the french with you when you leave.

Laird

f.Channell · Post by **f.Channell** » Sun May 23, 2004 2:00 am

Personally I would prefer a "chi" powered vehicle.

With extra long Blackbelts to run the accessories.

F.

Guest · Post by **Guest** » Sun May 23, 2004 2:13 am

Great post!

Bill Glasheen · Post by **Bill Glasheen** » Sun May 23, 2004 3:24 am

No way, Jose. If we have to take the French, then the invasion is off...

- Bill

How expensive is gas?

My '92 Toyota Celica