Market Inertia Leads to #1 Position

Headlines in the Los Angeles Times and Detroit Free press tell the story. The Japanese automaker may claim the world title from GM next year. Detroit workers have much to worry about as three of Detroit’s biggest auto makers announced nearly 60,000 job cuts in the past week with more to follow. One article says:

“As GM tries to win customers with deep discounts, Toyota is raising prices on some models”.

Clearly U.S. automakers have lost the market inertia they had survived on over the last few decades.

Thirty years ago, my father only bought Plymouths, my grandfather only bought Fords. Today I have friends that rave about their third Toyota purchase or second Lexus purchase and rave about product quality and reliability. Another business associate has had chronic problems with his recently purchased GM truck. The market inertia has shifted to the foreign producers of high quality products and it won’t change soon. The 10 best vehicles according to the latest Consumer Reports analysis are all made by foreign manufacturers with Toyota and Honda leading the pack.

Toyota has the market inertia to lead them to the number one spot and GM will crumble as long as U.S. consumers expect their products to be inferior to Toyota. Like the effect of inertia on turning a big ship, it will take a lot of time and effort to change GM’s direction in the mind of consumers (market inertia) that is leading them away from the #1 spot in the auto market.