4/15/2005

Finding The Profit

United Auto Group has found that it makes a greater profit outside of the United States. In Drive On it says that sales grew 6% in the U.S. and 22% outside. In order to spread the fixed costs and increase the profits, we can see that United Auto Group has found it extremely beneficial to enter other markets.

7 comments:

sandy said...

I hope I am correct in saying that this is a result of free trade. The book "Fair Play" has convinced me to be a supporter of free trade. If other countries have let a U.S. company into one of their markets, and it has benefited the U.S. as a result, then we should return the favor. Doesn't both countries benefit anyway?

Dr. Tufte said...

-1 on Sam's post and Sandy' comment for no link and poor grammar.

I'm dubious about this. The post focuses on sales, rather than profits. Who cares about the former unless it leads to the latter?

Ross said...

Sort of a response to Sandy: we have MUCH BETTER CARS as a result of free trade. I grew up in the 70s and 80s, and a person such as a dad could hardly dream of going well over 100,000 miles w/o serious problems to fix on their automobile (such a thing is routine for me; I hate to spend money on cars). Dad's '76 Volare had baeen nonstop frustration up to 49K, when we sold it (it felt like an old heap then); the '80 Ford Fairmont chugged sadly with a cracked head by 70K; ditto for the '81 Escort by about 60K. The '70 Charger, I vaguely recall, was not trusted with long out-of-town drives after about 60K. And we had bailed out of the nightmarish '70 AMC Hornet at 59K, thinking we'd get improvement with the Volare. THe first car I recall really making Mom and Pop happy was the '86 Taurus (a European-influenced sedan); it seemed pretty smooth up through 125K, and clapped out at 146K (my mon wasn't keeping it well-oiled, I don't think). Long-winded, yes, but I think it illustrates how far we've come. Thank you, Japan.

Ross said...

By the way, the Taurus was the first US car I remember with fairly successful ergonomic execution (they were gunning for the Honda Accord.)

Dr. Tufte said...

Thanks for the good additions Ross.

No offense, but that's quite the list of losermobiles that your parents bought (other than the Charger).

Having said that, my dad thought he was so far ahead of the curve when he pre-ordered a Citation. That car was a lemon from the word go - it had a hesitation problem when you stepped on the gas that was never solved. He doubled his bet by buying a Phoenix a year later (Pontiac's sister car). That one was a tad better, but still lousy. He also bought me a used 1979 Chevette in 1981 that was trouble until I had a new engine put in during 1986 (the old one had seized up at 65K miles. I later replaced it with a '78 Bonneville with 110K miles on it that lasted less than 5K miles. Following that I bought a new Ford Probe in its first model year (1989). I'm still driving it, and approaching 100K miles.

carter said...

Dr. Tufte made a point that we really need to focus on profits, not sales. You can sell things for a loss and do it all day long.

Dr. Tufte said...

-1 on Carter for nonsense.