It’s a fundamental and inevitable outcome of how these businesses are structured and run. Were the decisions to chase larger more premium vehicles short sighted? absolutely. Was the pursuit of Financialization in car sales to make up for pricing out lower income buyers obviously a bad idea? Without a doubt. Could they have made any other decisions? Not without being replaced by shareholders.
The solution to this problem is not just to “kick the bums out”, these companies need to have their management and ownership restructured in a way that generates incentive structures to maintaining a stable long term market rather than quarterly revenue growth.
Thrashy@lemmy.world 8 months ago
In fairness(?) Ford bet big on small cars in the wake of the Great Recession, and that worked well for a while, but by the time they decided that the only non-truck (from a CAFE standpoint) that they were going to keep selling was the Mustang, they were losing money on every Focus and Fiesta they sold.
A lot of that was their godawful automatic transmission that was forcing them to spend zillions in warranty repairs, but at the end of the day the margin on economy cars is so slim that you can’t afford to make mistakes. Rather than bet on perfect execution in a market that was already shrinking in the US, they decided to focus on higher-margin products… and that’s fine in the short term, but as you mention it’s going to leave them exposed once nobody can afford to spend $50k+ on a horrifically overpriced big pickup anymore.