"What will happen to GM (General Motors)?"
"What company is it planning to merge with?"
"If GM goes away, Japan will dominate the market, won't it?"
Tokyo-ites are really snappy.
All I could say was "No way!" GM is something that we can't afford to lose, or even beat at least in the US market.
This is a theory that I have believed in for ten years though some people tell me that they have heard or read about it somewhere.
Maybe I could express this kind of opinion in conversation. But I would rather not express such a low-spirited selfish opinion in writing because it would put my grace in question. Perhaps someone else has advocated the opinion before. I will apologize if this is not an original idea. But still, this is what I believe.
Anyway, I want you to read this column thinking this is something you have heard of before.
GM creates loose market
Though it looks like that Toyota Motor Corp finally saw its exports to the US fall into the red, the Japanese automobile industry has always earned profits from exports to the US. GM was already there in the North American market.The company has a history of more than 100 years, which accounts for its large legacy cost. In addition, it has implemented restructuring almost every year. Just like a smoker who boasts about "quitting for the 100th time," it is evidence of the fact that its restructuring efforts have not made any significant progress.
In the North American market, the Big Three (is this term still appropriate?) led by GM are setting prices based on their own cost structure, and their prices are slightly higher than Japanese standards.
Japanese automakers that entered the market later were able to set their prices in light of the prices set by the Big Three. Japanese manufacturers, who are adept at "getting blood from a stone" (i.e., they are very cost efficient), were able to generate huge margins. In other words, Japanese automobile manufacturers have earned profits in the North American market thanks to GM, who is the "reverse price leader."
In the Japanese market, where GM's presence is invisible, pricing competition is fierce among Japanese manufacturers. As they are all trying to get blood from the same stone, prices are set at the lowest possible level with the slimmest of margins.
Given the high local production ratio of Japanese manufacturers, the situation in the US market will not easily collapse, even if exchange rates fluctuate further. That is why I want GM to remain solid. I want GM to maintain the loose market. I am not enthusiastic enough to start an argument with a stranger at the barber, but I believe that we can't afford to let GM disappear so easily.
Partly depending on who will acquire the company, GM will possibly succeed in restructuring for the first time. When GM becomes unable to create a loose market, its existence will no longer be beneficial to Japanese automakers. And the market will enter a full-scale "kill or be killed" phase, but we aren't there yet. I want GM to reign over the US market for much longer. I do apologize for my selfish way of thinking