Welcome to this week's edition of American Idol Preview. Today, we're placing our focus on the cars of our remaining stars. Maybe the secret to their success is under the hood?
No time for small talk, because Katharine McPhee just stepped out of her stretch Lexus to roaring applause. The luxury Toyota
The McPheever is rising, as are Toyota's sales. The company is settling into the second-highest worldwide auto sales this year, and No. 1 is within reach as early as next year if recent trends continue. It's now moving up the ranks within the U.S. light-vehicle market as well. But the real secret to Toyota's success is a matter of corporate culture, not just market share.
Toyota is built on a culture of reinventing itself to meet changing demands. It's a company that's unafraid to take risks and that rewards new ideas. That's how you become great. Challenge conventions; challenge yourself. If Toyota wasn't such a huge operation, I'd call it a Rule Breaker in the truest sense of the term.
Katharine walked off the red carpet and should be well on her way to rehearsal now, and here comes Chris Daughtry. Eschewing the limos for a Dodge Charger, courtesy of DaimlerChrysler
DaimlerChrysler got sucked into the employee-discount wars of 2005 and is coming up on tough year-ago comparisons against the brisk sales those programs generated. But while unit and dollar sales should fall short of last year's comparative quarters for some time to come, net income could see upticks instead. That's welcome news to a company operating on thin (albeit positive) margins.
It seems as though DaimlerChrysler's biggest strength is its strong diversity, with light trucks, SUVs, and minivans each selling about as briskly as the passenger cars, but at healthier markups. That operating income trickles all the way down to the bottom line, where DaimlerChrysler is the only one of the Big Three Americans that consistently shows a profit, despite placing third in sales quarter after quarter. It is also the only one to gain, rather than lose, market share over the past five years.
And with a wave and a smile, Chris is gone. Pulling into the driveway now is Elliott Yamin's oversized GM
Some say that filing for Chapter 11 protection might be a good course of action for GM itself. Shedding the trappings -- and traps -- of the past could give the biggest car company in the world (as measured by sales) an opportunity to refocus on the future. If GM has a saving grace, it's the financial division, GMAC. The talk about spinning off the healthiest operation in the entire company in return for a better-looking balance sheet seems shortsighted to me. It would be like Elliott trying to do heavy metal. GM is losing customers every year, mostly to the Japanese cadre invading the U.S. market, and may not be No. 1 anymore if current trends continue.
Bringing up the rear, Taylor Hicks comes skidding in sideways in his Ford
Ford is another company that's more likely to make a profit from your car loan than from the sale of the actual car. Losses before taxes of $3.9 billion in the car-sales business were balanced in 2005 by $5.9 billion of financial-services gains.
The Big Three need to come up with some new moves to stem the rising tide of Japanese cars driving on American roads. We have the biggest auto market in the world, and this is where the tone is set for the world market. And the market is changing, polarized into more fuel-efficient hybrids and small cars versus heavy pickups and SUVs. It's up to the companies that want to succeed to adapt to this new reality.
That's all the time we have today. The smart money is on Katharine and her Toyota, but we see surprises almost every week here at American Idol. Come back next week to see who's out. Seacrest -- out!
Related links:
- Check out the forgettablemyFord, if you dare.
- Nissan is no General Motors.
- Toyota strikes up a nifty deal.
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Anders Bylund is not Ryan Seacrest, but he plays him on the Fool. He does own stock in Nissan, and about one-third of a GM share that he can't seem to get rid of. (It's a hidden danger of DRIP investing.) The Fool is serious about its disclosure policy .
