Texas Is Pickup and SUV Country

Bloomberg Businessweek just published this graphic showing where new car sales are strongest--and of course Texas is a hot spot. Yes, North Dakota and Alaska have more registrations, but there's no question that Texas is pickup and SUV country.

The Texas State Fair, which runs for another 12 days, features a dedicated auto show and larger-than-life displays to catch the eye. With 300,000 square feet of auto exhibits, there really is something for everyone. Check out the listings of exhibitors in these photos from the fair's site. Texas-sized marketing!

The state is such an important market that Ford chose it as the location for a media sneak peek of its 2015 F-Series Super-Duty King Ranch Truck. Ford sells a new F-series pickup in Texas every 42 seconds.

GM builds a number of SUVs in Texas, including Chevy Suburban and the Tahoe, among others. Having signed on as the state fair's official sponsor, Chevy gets top billing and some Texas-sized bragging rights.

Toyota is in Texas, too, announcing it produced its 1 millionth truck in its local plant. The new Toyota Tundra comes in a special 1794 edition named for the ranch where the plant is located. But Toyota still has a ways to go to catch up to Ford and GM in the Lone Star State.

Why are SUVs and trucks so important in the marketing scheme of things? They deliver big profits to automakers. So even though fuel-efficient vehicles are increasingly popular, SUVs and trucks boost revenues and profit margins, big-time.

GM + SUVs = HUH?

General Motors recently announced that it will move quickly to bring big new SUVs to market. Why? Because these are GM's most profitable vehicles.

Even though high gas prices and sluggish economic conditions have put the brakes on SUV sales, and GM's smaller cars are helping the firm rebuild itself financially, management is looking ahead to better times and bigger profits that can come from high-ticket SUVs. But has anybody asked customers what they want?

Of course GM has to think years ahead, because gearing up for new vehicle launches takes time. By the time tomorrow becomes today, the economy is likely to be far better and unemployment much lower. I'm just not sure how quickly SUV demand will rebound, however.

Some customers will always want SUVs, regardless of gas price ups and downs. But will demand be high enough to justify GM's big investment in accelerating new vehicle intros?

Contrast GM's SUV push with Ford, which has been boosting global sales with smaller, fuel-efficient cars. James Farley, Ford's marketing chief, knows how to intro big vehicles: He was in on Toyota's Tundra pickup launch a few years ago.  And Farley is putting Ford's money into smaller vehicles these days, without starving the F-150s and F-250s for which the firm is known.

No matter how profitable SUVs and pickups may be, if they're not what customers want or need, they won't help anybody's bottom line. That's why I'm concerned that GM + SUV = marketing misstep.

GM Edits Its Product Mix

As marketing textbooks like to say, GM is "editing" or "pruning" its product mix, shedding Hummer, Saab, Saturn, and moving Pontiac to within one of the other product lines. This is a long-overdue change that should help GM focus on strengthening its brands and its quality.

Most interesting is this statement from GM's press release about its plans for Saturn as it restructures for a hefty government bailout:

Saturn will remain in operation for the next several years, through the end of the planned lifecycle for all Saturn products. In the interim, if Saturn retailers or other investors present a plan that would allow a spin-off or sale of Saturn Distribution Corporation, GM would be open to any such possibility. If a spin-off or sale does not occur, GM plans to phase out the Saturn brand at the end of the current product lifecycle.

How many consumers are going to buy new Saturns now, even at fire-sale prices, knowing that support will be going away soon? Why would the retailers want to save a brand that lacks GM support and has lost its identity? GM might as well say goodbye to Saturn right now and get it over with. Bye-bye.

Big Three Automakers Online

Given the U.S. auto industry's hat-in-hand bailout requests, I thought I'd look at what they're saying on their web sites. GM wants to set the record straight and mobilize brand fans on its behalf. Ford is trumpeting its new direction. Chrysler isn't even addressing the current crisis.

Sorry, Chrysler, denial won't get you anywhere these days, even with gas prices way down from their summer peaks. IMHO, GM's approach is interesting for its involvement angle (whip up public support for yet another taxpayer-funded bailout?). To my non-industry eye, Ford's approach is a curious combo of spin and plan. What next?

clipped from www.gm.com Mobilize now Make Your Voice Heard From dealerships to diners, what happens in the automotive industry affects us all. Tell Congress the U.S. auto industry matters. » Mobilize now clipped from www.fordvehicles.com At Ford, we are headed in a new direction. After turning a profit this year in the first quarter and making significant progress on cost reductions, we were hit by a spike in gas prices, followed by the current credit crisis. But instead of focusing on our challenges, we’d like you to know how very far Ford has come and how we’re doing business differently. clipped from www.chrysler.com Chrysler LLC Celebrates 25th Anniversary of the Minivan11/3/2008 Subjects: Design - Town & Country Source: Chrysler Media Services LLC