American car companies such as GM and Ford struggle like mad to make money in Asia (apart from China). The volume of American cars sold in Asia is laughable with only Ford making a tiny impact with its Ranger pick up trucks. The real reason behind the struggle is down to the poor model selection available to the buyers in the region.
Ford and GM design their cars mostly for the American market and they don't appear to suit the taste of Asian buyers. The design of the models don't appeal to the Asian tastes and the after sales network is very weak. However, this is a catch 22 situation where you cannot expect to have a strong after sales network if you don't have sales and if you don't have good after sales network you cannot expect to sell a lot of cars. The brands also do not project a high quality or strong reliability image in Asia which leads to little confidence in the brands.
Unlike Japanese car makers who have design studios in Asia to cater to Asian tastes, the models offered are more suited to the local needs and the price points help tremendously to allow more people to be able to afford the cars. With more cars on the road the consumers is able to gain confidence that since there are plenty of Japanese cars around the after sales service should be good and the reliability of the car should also be good.
The American car companies are like lumbering giants and are too slow to react to market demands and changes. The American car companies also do not cater to the needs of the local market. What sells well in America does not mean it will sell well in Asia. Companies like Ford and GM need regional offices that can research and study the demands of the market and feedback the information to the head quarters advising them of new product development for the region. Without such market information Ford and GM cannot expect to compete in the region. A good example is the recent exit of GM from India and Ford is also in the midst of shutting down its operation in India. India is now the top 5 automotive market in the world and to shut or exit the market means that GM and Ford got their strategies very wrong. In comparison with Honda and Toyota who entered India late, they have steadily gained more market share and is growing year on year.
Honda and Toyota offered models that catered to the local tastes and have made GM and Ford look like chumps. If Ford and GM want to be a true global player in the automotive industry they need to change their strategy. If their strategy continues this way both Ford and GM will see their global sales volume drop further and companies like Hyundai will soon surpass them.
Ford and GM have the capability to make a come back but they need to re-think their strategy about product planning for each region and come out with some creative ownership campaigns that will attract back the buyers. Ford and GM needs to think global and stop thinking American. The world is your oyster... why not grab your pearl!
