Stock Investing Chrysler Up For Sale What Is Daimlerchrysler Thinking
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Stock Investing: Chrysler's Sale ?" What is DaimlerChrysler Thinking?
Summary
DaimlerChrysler has decided to divest from the Chrysler automobile company by hiring J.P. Morgan Chase to oversee the process. This move marks a significant shift since Chrysler's acquisition by the German automaker. Reflecting on past stock research, Chrysler was a promising stock pick as far back as 1981, thanks to Lee Iacocca's leadership in rescuing the company from bankruptcy.
A Closer Look at Stock Investing
In stock investing, it’s crucial to cut through the noise and focus on reality. Our research indicates that Chrysler, like General Motors and Ford, anticipates further erosion of its domestic market share. This outlook underscores a lack of confidence akin to a boxer anticipating defeat. For investors, such an attitude is a red flag.
Steps to a Comeback
For Chrysler, GM, and Ford to regain their footing, they need to focus on:
1. Manufacturing reliable, quality products.
2. Offering competitive and straightforward pricing.
3. Providing exceptional service to build customer loyalty.
Manufacturing Quality
Unfortunately, domestic automakers have lagged in quality compared to Japanese companies like Toyota, Nissan, and Honda, known for their zero-defect manufacturing. The tradition in Detroit has been to allow imperfect vehicles to reach consumers, expecting dealerships to handle subsequent repairs. This practice is increasingly unacceptable to consumers, yet Detroit’s mindset remains unchanged, citing cost concerns for not adopting zero-defect manufacturing. This reluctance only pushes them further behind.
Competitive Pricing and Transparency
The game-playing in pricing strategies needs to end. American dealerships often complicate the pricing structure, making it hard for consumers to compare deals and make informed decisions. In contrast, Japanese dealers provide clear pricing, fostering consumer trust and allowing straightforward negotiations.
Service and Customer Loyalty
The state of service at many American dealerships leaves much to be desired, often falling short of the standards set by their Japanese counterparts. Japanese automakers have even introduced policies like free oil changes to address maintenance needs, highlighting their focus on customer satisfaction. In contrast, American cars often require significant maintenance, reflecting poorer quality.
DaimlerChrysler's Next Steps
DaimlerChrysler will eventually find a buyer for Chrysler. There’s even talk of General Motors stepping in, despite its own struggles. This decision seems ill-advised considering Daimler’s difficulties in managing Chrysler.
In conclusion, Chrysler and its American counterparts must pivot towards improving quality, transparency, and customer service to compete effectively and regain market share. Only then can they hope to make a significant comeback.
Goodbye and Good Luck,
Richard Stoyeck
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