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Date: Sat, 13 Oct 2001 04:34:55 GMT
From: "Ray O" <rokigawanopsamNOSPAM.com>
Subject: Re: Toyauto vs Slaab : bottom line


<MikeHunt2nopsamcity.com> wrote in message news:3BC704E8.C15AEF9Enopsamcity.com... > Not quite true. It actually cost more to build a FWD car than a > comparably sized RWD. If you recall when Chrysler replaced their > complete line of RWD with much smaller FWD the prices were comparable. > What they saved on steel glass and plastic was replaced with extra labor > cost and reductions of economies of scale. Assembly of FWD cars is > slower because of the greater ratio of off line assembly required for > FWD construction. ====================== I disagree on the part about costing more to build a FWD car than a comparable RWD vehicle. The reson that Chrysler (and all other manufacturers ) didn't reduce their prices when they switched to FWD is because of the initial investment. Fater the initial engineering investment is recovered, then the manufacturers get to keep the extra profit. Let's face it, auto manufacturers are for-profit organizations. As you pointed out, market conditions have a lot to do with auto pricing and if the market will bear it, then makers will keep the price the same and either pocket the extra margin or reinvest in in something else. Off line asembly doesn't inherently cost more - in many cases it costs less because the engine/transmission assembly can be done in another location where labor rates are lower. As far as reduced economies of scale, if you build the same number of vehicles, then the economies of scale are the same for FWD and RWD vehicles. Ford actually can assemble the Crown Vic at less cost > than the Taurus. =================== That's beause the CV platform is an old (albeit functional) platform where the initial design costs have been recovered. The only costs involved are in "tweaking" it. IIRC, the Taurus has been completely updated once or twice since its intro where I can't remember when the CV got an all new platform. It is the market forces that determine retail pricing > in a particular market. How many small cars and trucks do you think > could be sold in country's with an average income of 1/5 that of the US > if they sold for the same price. =================== You're right there. The real advantage of FWD is in > packaging a vehicle to accommodate a given number of passengers in a > smaller size. ===================== In addition to lower manufacturing costs, also correct. That was necessary in the seventies for bread and butter > high volume cars but not today. As cars get bigger they tend to use RWD > because of the lower build cost and the lower sales volume. ====================== I disagree with the reason that bigger cars tend to use RWD. I believe that the reason bigger cars tend to use RWD is that bigger cars tend to be more upscale and buyers want the handling and ride advantages of RWD. Also, interior packaging is not as tight a fit on a larger car so they can get away from strut suspensions and back to more geometrically correct upper and lower control arms and the FWD traction advantage is reduced a lot with a larger, heavier vehicle. Sales > volume has much more to do with the MSRP than anything else. Cadillac > lost its number one position to Lincoln because it does not built the > right cars for the luxury or performance market, RWD. They will be > returning to RWD over the next few years. ========================== I agree with most of this but IMO, another reason that Cadillac lost market share is poor quality and they continued to built stodgy cars instead of updating tham like Lincoln did. The Seville was supposed to be a FWD sporty luxury sedan but FWD in the same phrase as sporty luxury is an oxymoron. To me, the Catera, built by Opel, brings back images of the econo-Opels sold in the US that were not long-term commercial successes. Toyota was smart to enter > that market with RWD with the Lexus. Chrysler will have several RWD > models in the near future in it near luxury models and it projected > uxury models so they can use shared MB parts. ======================== IMO, Chrysler does a decent job of design and packaging but they still have a very poor quality image that they worked hard to earn in the past. They have gotten way way better in quality but I have a saying - "you can't get killed jumping out of the basement window". Almost anything they did would have made their product better and I think they still are behind the competition. Toyota's executive VP a while back was a former Chrysler executive and he used to talk about how nice it is to have a company car that didn't have all sorts of problems. Just my 2 cents Ray O

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