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March 26, 2008
Bold Moves
Besides Wal-Mart, is anyone faring well in today's increasingly challenging global economy? Automakers are pulling some pretty creative moves in an effort to stay afloat in the U.S. and abroad.
Chrysler plans to shut down all operations for two weeks in July to save costs, and Ford’s latest meeting of the minds has come up with “Ford. Drive One.” as its newest slogan to inspire and recapture the marketplace.
Other automakers are getting a bit more creative in challenging times.
Toyota Motor Corp., for one, is opening a shopping mall this week to boost sales in Japan. This isn’t just any mall, though. Sure, it’s like a typical indoor shopping mall in that it has 220 stores and restaurants. But the building, which is being developed, built and operated by Toyota Motor Corp., will have plenty of new Camry’s and other Toyota models on display in walkways.
Massive space is allocated to Toyota showrooms, and as if this weren’t enough of a hint to shoppers, “shopping carts are shaped like cars, and a plastic model store boasts a big lineup of car models,” according to The Associated Press.
While Toyota does big business in the United States and elsewhere — having nearly overtaken General Motors Corp. in global vehicle sales — it faces many challenges in Japan where public transportation is reliable, parking is expensive and young people are losing interest in cars. Something else to consider:
[The mall] is the latest attempt by the Japanese automaker to tackle a serious problem in its home Japan market: Young people are rapidly losing interest in cars … In Japan, the usual old ways of selling cars like showrooms and TV ads are no longer working. Youngsters are choosing to spend on mobile phones and laptops than on cars, Toyota officials say.
AP points to a study last year by The Nikkei, Japan’s top business daily, which concluded that a number of 20-somethings didn’t want a car “even if it were free.” Others said they didn’t find the idea of going for a drive with a date or zipping around on a sports car as particularly appealing.
Toyota’s shopping mall is just the latest bold move that underscores the importance of how car dealers must actively seek out buyers, instead of passively waiting for people to come to the showrooms.
Like Toyota, Volvo is also getting creative in an effort to drive profits by pumping up production on ... buses?
According to Forbes, Volvo said it has won an order for 240 air-conditioned city buses from the Indian bus operator, Bangalore Metropolitan Transport Corp (BMTC).
“Encouraging people to leave their cars behind” is not a phrase you’ll often hear associated with a carmaker, but, as Forbes explains:
Bangalore is expanding rapidly and the city is trying to encourage people to leave their cars behind to reduce burgeoning traffic congestion. Volvo said its latest order follows on from the success of 70 air conditioned buses it sold BMTC two years ago.
One carmaker not short on cash is Porsche. Bloomberg reports that the German automaker “expects deliveries this year to be about the same as in fiscal 2007 as new models and economic growth in China, Russia and the Middle East offset any declines in the U.S.”
Moreover:
Even as economic risks have “intensified” worldwide amid higher oil prices, a declining dollar and a possible recession in the U.S., Porsche still intends to "emulate the high sales figures" of the year ended July 2007, the Stuttgart, Germany-based company said recently in its first-half report.
Porsche spent some 17 million euros on a new office and dealership in Moscow, and, in the first half, it was “particularly successful in the markets of the future,” including China, India, Russia and the Middle East.
Similarly, Fiat is jumping on the “successful markets of the future” bandwagon. Oddly enough, Fiat sees this taking place in the U.S., according to Financial Times (via Edmunds INSIDE LINE):
Fiat S.p.A is in talks with car manufacturers in Detroit to start the production of its Alfa Romeo model in the U.S. in either 2011 or 2012, Financial Times Deutschland reported, citing chief executive Sergio Marchionne.
Fiat also plans to export its 500 car, a hot seller in Europe, to the U.S. after expanding its range, Marchionne said, adding, “We need to replicate the Mini phenomenon in the U.S.”
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