After we get the June auto sales today, we will be halfway through a year that has thrown the auto makers and American car buyers for loop. Some thoughts on what's changed, what's the same, and some trends/ideas worth examining.
1. Ford revs it up
Hats off to CEO Alan Mulally and his execs who have the blue oval surging as we head into the summer. Credit Ford's success to an improving line-up, and not stumbling while others have. I expect these guys to stay on a roll the rest of the year as the new Taurus hits showrooms.
I also expect Ford execs to continue peddling the idea buyers are turning to Ford because it didn't take a government bail out like GM and Chrysler. Give it a rest guys. This idea has been over sold and the constant patting on the back is getting old. Even Ford dealers I've talked with roll their eyes when I ask how often buyers bring up Ford passing on a bail out. Here's the story: buyers ARE more confident about Ford in part because it didn't go bankrupt and new models like the Flex and Fusion Hybrid are worth looking at.
2. Bigger is NOT better.
Somewhere longtime auto industry player Jerry York is chuckling to himself at the way GM and Ford have realized fewer brands are better. HUMMER, Saturn, SAAB, Jaguar, Land Rover, Aston Martin and Volvo have all been sold or soon will be. Frankly, GM and Ford will be better off focusing on fewer brands and so will most of those brands. It is the long-overdue death of the idea that more brands are good for the company's bottom line.
3. Small car insanity
The first half of this year everyone jumped on the "Americans want small cars" bandwagon. Some of this was shoved down our throat by leaders in Washington demanding to know why auto makers were building SUVs that weren't selling instead of small cars everyone wants? So all the auto makers started touting plans to build smaller cars, even though even small car sales dropped during the recession (a fact the folks in D.C. conveniently never mentioned).
I expect auto makers to keep perpetuating this idea small cars are gonna be big business, even though they know the idea is being over-hyped. Buyers want better fuel economy, a distinctive style, and capability. Give them all three in a lighter, car-based crossover utility vehicle with good mileage and they will snap it up. Give it to them with a distinctive looking mid-size sedan and they will flock to it.4. Hyundai is hot
In the first half of this year, no other auto maker has been as hot. Starting in January when the Genesis was picked as North American Car of the Year. In February it was the first auto maker to offer a deal to help buyers make their payments if they lose their job. Last month it cracked the top five in the J.D. Power initial quality survey. And oh by the way, it's been picking up market share as more and more buyers discover Hyundai. Hats off guys. Now keep it going in the second half.
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