"Peter da Silva" <[log in to unmask]> wrote in message news:9unsrv$ia@web.nmti.com...
> In article <[log in to unmask]>,
> Mark Wonsil  <[log in to unmask]> wrote:
> > As for HP, how do they handle the commodity issue?  The auto industry has
> > gone through two such events.  When Ford got into the mass production
> > business he tried to make the car a commodity.  Later the Japanese did the
> > same.  Did the existing auto-makers throw away their high-valued line?
>
> The ones who didn't went out of business or were bought by Ford or GM, who
> applied commodity methods to producing a "high end" commodity vehicle that
> was good enough even if it was no Duesenberg.
>
> There's a bunch of non-commodity cars, but they tend to be special purpose
> machines: construction equipment, recreational vehicles, military, that sort
> of thing. Stewart and Stevenson here in Houston make some amazingly cool
> offroad trucks, but they're not Duesenberg either.

I'll have to disagree here a bit - I would class BMW, Mercedes, Audi (but
not VW) as non-commodity cars, and I don't think they are "special purpose
machines" but rather represent what HP used to be - extra added value cars
for people willing to spend the money for clear tangible (and sometimes
intangible) benefits. And they seem to be doing well, mostly (except
for the ill-considered Daimler-Chrysler thing, but you know how big
mergers can go 8^)).

If you study the car business in detail, you can learn some things about mass
markets in general. One thing that I've always read is that even in hard times
there's always a market for the high end of the product line. What tends to
happen, though, is that the mid-line product purchasers tend to slide lower
in the product line.

The other interesting thing I've learned recently about the car business
is that Ron Zarella (sp?), the CEO of GM, has admitted recently that the
pure "brand management" and commodity approach they have been taking has
NOT been working and has hired Bob Lutz (ex-Chrysler) to fix the perceived
"product problem."

Note also that GM recently cancelled the entire Oldsmobile product
line, the oldest "brand" in the portfolio.

--
Greg Cagle
gregc at gregcagle dot com

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