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Car Wars: Hope for Detroit?

Fortune's Alex Taylor III offers a terrific take on the outlook for Detroit's automakers, based partly on a new report from Bank of America Merrill Lynch analyst John Murphy. Here's an excerpt:

For three decades, Japanese manufacturers have been chewing through the U.S. auto market like termites in a lumberyard. Led by Toyota, Honda, and Nissan, they now account for more than 38% of sales.

But that rapid advance may be coming to an end. Reason: Japanese product cycles are generally converging to the industry average. They are churning out new models no more quickly than everybody else.

That's just one of the surprising conclusions in the latest edition of "Car Wars," published by Bank of America Merrill Lynch's chief auto analyst John Murphy.

Car Wars is an annual study that assesses the relative strength of each automaker's product pipeline. Its thesis is that the rate at which an automaker refreshes its product line is a major determinant of its market share. In other words, the manufacturer with the newest car line wins. Over the last ten years, automakers with the highest replacement rate and the youngest showroom age have gained sales at the expense of competitors.

Read the full piece here.

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  • 1

    Development costs bucks.

    The Germans wanted Chrysler because of the superior Development Process and American technology that Bob Lutz installed that was so successful, They grabbed it and went nuts developing all kinds of nonsense stuff that Sergio had to cut. They got what they wanted and split leaving it in a shambles having way overspent on useless developments. I don't think that this marriage will be so crazy and deceitful.

    So when you develop a product you better have your head on, all lobes glowing.

    The HHR has been far more successful than the Execs at GM ever imagined. Interesting, isn't it... fine car.
    So sad to see some great marques languish and flop.

    Interesting also is that the foreign Divisions have produced such great stuff. Sometimes they just let it be wonderful like the Pontiac G series, and sometimes they ruin it, assuming that the home-crowd has neither taste nor intelligence nor spunk like the Fiesta.

    It took far too long for the domestic manufacturers to realize that the Japanese and Europeans were cleaning up with beautiful, performing, 4 passenger cars while here they left the designs of such to the garbage crew.

    And they tried to sell them... "Can't afford the the big one? Well step right up little man, I've got just the car for you."



  • 2

    Detroit will bounce back just like the Detroit Lions did. We built America and they still depend on us! Go DETROIT!

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