Market share erosion will be tough to stop because there is so much more product coming into the traditional segments that the Big Three had to their own. For example, when you look at Toyota and Nissan and their large pickup trucks and large sport utility vehicles, that's a different situation than we saw in the past.
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| With Nissan and Toyota both bringing pickup trucks and large sport utility vehicles to the market, market share erosion of the Big Three will be tough to stop. (Photo: NAIAS 2003 Trevor Hofmann, Canadian Auto Press) |
At the same time, there is hope for the Big Three because they have so many new cars coming in high volume areas where they have been a little bit weak in the last few years. So, it's going to be a real dogfight and we'll have to see what happens.
Q: Can General Motors, Ford and DaimlerChrysler be profitable with whatever market share they end up with?
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| Can the Big Three stay profitable with reduced market share? (Photo: General Motors of Canada) |
Cole: If you're not profitable in this business, then you're not going to stay in business. We've talked about market share a lot in the last couple of years and the declining market share of the Big Three, but what really counts is profitability. Market share is nice, but profits are essential. The real challenge now is to bring profitability to a level that will make Wall Street fall in love with the industry again. Right now, investors are not enamored with the industry. Maybe a little bit here and there, but it's not an industry that's appropriately profitable.
Q: And what's going on with the Center for Automotive Research?
Cole: Well we're busy, if somewhat chaotic. We spun off as a totally independent not-for-profit last spring and our former parent, Altarum, provided us with a line of credit, but we haven't had to tap that. So, we've been successful beyond what we had anticipated. We're in temporary quarters and we will be moving to larger ones. I think our success has been dependent upon the extreme turbulence we've seen in the industry. A lot of people are trying to understand where the industry is going.