Monday, December 21, 2015

It's Not Really a Malibu Review

For the most part, I despise the financial press. If you want to find a part of the media where wild speculation abounds and no one, ever, no one ever gets fired for being wrong, it's the financial media. Seeking Alpha embodies some of what little good there is in the financial and a lot of the worst of it.

I suppose one can't criticize the idea that everything they see they see through the lens of, "How will this affect the stock". The problem with that is, of course, it misses a lot of things which may benefit a company in the longer term than, immediately impact on stock price. So, in a sense, a lot of things they write are just wrong or slanted from the outset.

As it is in general, so it is with this article on the new Chevy Malibu hybrid. I'll point out a few examples.

The bullet points at the top:
GM's stock has been held back by underperformance in the midsize sedan market, where the Chevy Malibu contributes under 10% of Chevy's sales.
The stock has also been held back by an inability to effectively compete against Toyota's iconic Prius hybrid.
This now changes with the all-new Chevrolet Malibu hybrid achieving 47 MPG, or only 10% less fuel economy than the Prius. 
The all-new Chevy Malibu also arrives in early 2016 with striking good looks, Apple CarPlay, Android Auto, 4G LTE and WiFi hotspot.
If GM manages to strike back against the all-new Toyota Prius, it could help boost its stock.
And, guess what happens if the new Malibu sells well? GM makes money. More people driving their cars, maybe even saying good things about their products, that might help their stock price.
(regarding Prius sales this year) ...That was down 12% from the previous year, not only because of the low gasoline prices, but also because the Prius was exceptionally long in the tooth, having lived past its originally intended expiration date.
Touche! Dead on right.
with the exception of the lack of Android Auto, Apple (NASDAQ:AAPL) CarPlay, 4G LTE and WiFi hotspot.
This is the last sentence in a paragraph of good things about the Prius. Ouch.

And then the next page, we get a recitation of what is better about each car and this...
Considering that the Malibu's price is only $3,610 more than the base Toyota Prius, what are the objective criteria by whom the Malibu should take market share?For starters, the Chevrolet Malibu has four standard technology features that are not available on the Toyota Prius, even as an option:
  1. Apple CarPlay.
  1. Android Auto.
  1. 4G LTE.
  1. WiFi hotspot.
Somewhat related, but not exactly, is OnStar. With a GM car such as the Malibu, you control many functions on your car via a smartphone app. You can start/stop, lock/unlock etc. OnStar can also help with safety and security functions.
In terms of the interior ergonomics, I think they are about equal. The old Prius was a disaster, and the old Malibu was not particularly good either. In this all-new round, they are both vastly improved. I give the Malibu the edge mostly because of the experience with Apple CarPlay and WiFi hotspot in my test drives. 
It's an odd article because it has little to do with the Chevy Malibu and everything to do with the Prius. And the author's opinion of the Prius is positive with some huge caveat's, sadly, the Prius technology package. Technology used to be Prius main strength now, even with a brand new generation that won't hit the streets for another sixty days, people who have driven the new Prius are complaining about the technology. That's very bad. I don't think this Seeking Alpha pseudo review will mean much in the long run but it send a signal that there may be some weaknesses that Toyota has not anticipated.