General Motors’ Bob Lutz was quoted this weekend concerning fuel efficient autos.
“We can’t sell small cars right now,” Lutz said. “People are buying trucks again.”
I’m no economist, but this is a prediction I made about a year ago.
Weaning ourselves from OPEC will take short term pain. Are we willing? Lutz’s words imply the answer is “no.”
Hey, Mr. Lutz, is it that people won’t buy small cars, or that they won’t buy the small cars GM makes? I’m guessing the latter.
Lutz is right, in a sense. Nobody wants small cars. What everyone wants is exactly what they already drive, only more fuel efficient.
That being said, the only fuel efficient vehicles on the market are small cars. Lutz is saying give the people what they want as long as we profit. This is how business works.
Normally.
Toyota has yet to turn profit on their Prius, but they keep selling them. Why?
Think about Google. Years ago, they decided that instead of competing in a market, it was better to dominate it. Profit? OK, we’ll get to that, but first lets own the market. Be the best search site on the net.
It worked.
Given that premise, Toyota & Honda are on pace to dominate the market, just by thinking a little more long-term, and by actually trying to be the best in their market.