How can the American Automotive Association Revive Interest in American automobiles

Ujiro Okiomah

Justin Myers

Odie Freeman

Nuri Hoo

Victor Cantu

Industry Analyst

Environmental Analyst

Quality Analyst

Policy Analyst

Customer Service Analyst

The History The History

The Environment The Environment

Quality Quality

Policy Policy

Price Price

Ujiro OkiomahIndustry Analyst

TEXT TEXT TEXT TEXTOil Production & Gas prices:• U.S. oil production peaked in the 1970’s at 11.3

million barrels a day.

• The Iran-Iraq War forced OPEC to raise oil prices to $34 a barrel, more than 10 time the price in 1972.

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U.S. oil Imported oil

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U.S. Dependence on Imported oil growing and domestic oil production is falling over a 17-year period.

TEXTMergers & Buyouts:• The Arab oil embargo of 1973 rose gas price

higher.• In 1979, Ford bought 25% of Mazda Motor

Company.• In the early 1990, Honda Accord becomes the

nations best selling car.

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U.S. Automakers Japanese Automakers

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Japanese Automakers gaining significant market share in the U.S. over a 15-year period.

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“U.S. automakers moved in a direction of production quantity rather than production quality.”

• Brand Extension:

General Motors has 7 brands in production.

Ford Motor Company has 8 brands in production.

Federal Government Intervention:

• In 1979,The nations third largest automaker Chrysler was on the verge of filing for Bankruptcy.

• In 1980, all three automakers posted losses of over $4 billion.

• Chrysler became the largest company in U.S. history to ask for help from the federal government.

The History The History

The Environment The Environment

Quality Quality

Policy Policy

Price Price

Justin MyersEnvironmental Analyst

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• Drive sensibly• Observe the speed

limit • Remove excess

weight • Avoid idling• Use cruise control• Use overdrive gears

TEXT TEXT TEXT TEXT•Gasoline engine•Fuel tank•Electric motor•Generator•Batteries•Transmission

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•Reduced tailpipe emissions

•Improve gas mileage

•Corporate Average Fuel Economy Standards

•Tax breaks

TEXT TEXT TEXT•Biodiesel •Electricity•Ethanol•Hydrogen•Methanol•Natural Gas•Propane

•Clean Air Act (CAA) •Climate Stewardship Act of 2003•Kyoto

The History The History

The Environment The Environment

Quality Quality

Policy Policy

Price Price

Odie FreemanQuality Analyst

• Reliability

• Performance

• Safety

• Comfort

• Toyota & Honda are most reliable

• Domestics fall close behind

Predicted Manufacturer Reliability

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- Consumer Reports, 2007

• Measured by Average problems per 100 vehicles

Reliability Over Time

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Age in Years

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Hyundai

GM

Chrysler

Ford

Nissan

Honda

Toyota

- Consumer Reports, 2007

• Acceleration• Braking• Handling

Rank Model 0-60 1/4 Mile

1 Mitsubishi Lancer Evolution RS 5.1 13.52 Ford Mustang GT 5.1 13.83 Pontiac Solstice/ Saturn Sky 5.3 14.04 Subaru Legacy 2.5 GT 5.3 14.15 Mazdaspeed 6 5.3 14.1

Quickest Cars $25k-$30k

- Car&Driver.com

• Air Bags• Impact• Safety Belts

• Electronic Stability Control (ESC)• Head-Protecting Air Bags

• Leg Room• Road Noise• Ride Quality• Logical Layout

http://automotivecenter.autobytel.com

The History The History

The Environment The Environment

Quality Quality

Policy Policy

Pride Pride

Nuri HooPolicy Analyst

• Declining sales

• Policy of AAA

• Policy of Toyota

Sales in 2006 - 2007

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Toyota Honda Ford Daimler

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• Excessive production in trucks and big cars

• The profit for employee system

• Low quality standards

• In 2006, Ford’s health care expenses were $3.1 billion

• $1.8 billion for Postretirement health care and the balance for active employee health care and other retiree expense.

The Loss based on Ford Annual Report 2006

Health care, 3.1, 31%

Post retired, 1.8, 18%

Pension, 2.7, 27%

Fixed Asset charges, 2.2,

22%

US plant idling, 0.2,

2%

Health care Post retired

Pension Fixed Asset charges

US plant idling

• Emphasize on market trend

• Limited profit sharing with their employee

• High quality standards

• Toyota only spent $1.3 billion for their pension and job benefit policy.

• They have a point system for the pension plan:– Service period– Job Title– Performance

The History The History

The Environment The Environment

Quality Quality

PolicyPolicy

PridePride

Victor CantuCustomer Service Analyst

• Times have changed– 1970

• 90% of US car owners drove American made cars– 2007

• 60% of US drive a Toyota, Honda, or Hyundai

• Reason for change – Pride in American Autos has diminished

• Reputation- Foreign cars have a reputation of higher quality and lasting longer than domestic cars

• Recalls- American cars have a history of headline-making recalls.

Family Sedans Toyota Prius

Upscale Sedans BMW 330i

Small Cars Honda Civic

Wagons & Hatchbacks Scion xB

Small SUVs Toyota Rav4

Midsize SUVs Toyota Highlander

Minivans Honda Odyssey

• Marketing– Prestige– Quality and Dependability

• Owner Satisfaction• Brand Loyalty

• Reduce the number of different brands in each company

• Make vehicles more efficient and eco-friendly

• Improve reliability and performance• Terminate employee profit sharing • Focus on creating owner satisfaction to

build brand loyalty and pride