Zipcar CEO Tells CNBC: No One Wants Chrysler, GM Products

On CNBC's Squawk Box Monday, Erin Burnett held an interview with Scott Griffith, the chairman and CEO of Zipcar. Zipcar is a car-sharing service that's emerged as a popular alternative to car ownership, especially in urban areas. In Washington, DC, where Zipcar merged with their car-share competition FlexCar back in 2007, they are fairly well-known and, as far as I've been able to determine, well-regarded.

Griffith was fairly bullish on his company's past success and future prospects, telling Burnett that people have gone from using Zipcar as their first, or only, car to using the service as a second car. According to Griffith, "14 million people can walk to a Zipcar in 10 minutes today," and, according to a recently conducted survey, there are potentially "37 million potential users across 100 major metro areas across the globe."

Griffith went on to describe car-sharing as "the new black." But you know what is decidedly NOT the new black? General Motors and Chrysler! And that's when Mark Haines asked Griffith an excellent question.

HAINES: Are you buying new cars?

GRIFFITH: We are buying new cars.

HAINES: GM and Chrysler cars?

GRIFFITH: We are not buying GM and Chrysler cars. In fact, we have never bought a GM or Chrysler product. What we do is we survey our members, we ask them what kind of car do they want to drive. And when we hear back what they want to drive, if we don't have it, we consider it and look at it. We have never had a request for a GM product. That's unfortunate, but that's the way it is. Out of 300,000 users that we survey every six months, I have never had a request.

BURNETT: That might be the most damning thing I have heard yet.

Well, I'd be surprised if that was the most damning thing Erin Burnett has heard on the troubled auto industry, but it surely ranks pretty high! At any rate, Zipcar's experience, I think, reveals what has to be the biggest barrier to reviving these automakers: nobody wants to even BORROW their cars for a few hours.

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Comments

[Maka]

11:36 AM on 06/05/2009

I'm a Zipcar member, and this doesn't surprise me. Zipcars gets used by hundreds of people over a pretty short time period - so even the newest, strongest car is going to get a beating. I know when I borrow a car, I just hope it doesn't breakdown on me when I'm out and about - and that's just because of the sheer use the things go through - Zipcars are pretty well taken care of. But I know I feel a little better in a reliable Honda or Toyota - then I'd feel in a Dodge Neon or something (my mom has a Dodge Neon and it's crap. The sun visor clip thing that keeps the sun visor on the roof, has broken off 3 times!)

[carlgt1]

11:13 AM on 06/05/2009

sounds bogus - 300K people polled and not one request for Chrysler or GM cars? that's statistically unbelievable.

[Puzzles]

12:10 PM on 06/05/2009

Not at all, the kind of people who would want to use the zipcar service are not the kind of people who would want to drive a the vehicles made by these companies. The marketing by these companies and the products they produce have constantly focused on the older demographic in style size and luxury. The marketing also reaches out to the NASCAR/Hemi crowd and their penchant for big, power, and exhibition. GM/Chrysler's claims of green/economical design/production is just not believable to the market (even if it might be true) that will use a zipcar. It will take a long time for GM/Chrysler to get over the image they have willfully developed over the last few decades.

[Alan Lachapelle]

08:16 AM on 06/06/2009

So your premise is that not one of the 300000 people that like efficient vehicles would not request the use of either a (1) GM or Chrysler vehicle? Read that to yourself a few times and think about how ridiculous that sounds. Personally, I would love to see a Malibu in the Zip Car lineup. Unfortunately, every time I have ever needed to rent a car, it has still been cheaper to utilize traditional rental agencies (Enterprise etc.). Maybe the thrifty, efficient Zipsters don't do their homework the way I do, but I am always able to find cheap deals for rental cars. Usually, I ask for a nice Impala or something, and those cars have come a long way from the ones produced in the 90's.

Statistically unbelievable? Statistically impossible, that guy insults our intelligence by making that comment. People that believe him justify the insult.

[Howard Williams]

10:18 AM on 06/05/2009

For me, to adqueately rate a car co. you have to look across the whole line. any co. can have a superstar performer, but if I let you drive 10 of my products, how many would you be happy with? I hate the buy American product, this assumes that the Big 3 would reward our loyalty by producing products that need, not want. For the longest, they have sold a lifestyle, as American are identified by their cars. Autos produced in the US are tropy wives that can't cook or clean. My friends are all envious, but I come home hungry in dirty clothes. Rather have the small, lithe foreigner v. the loud obnoxious, Jersey-haired harridan.

[Goliadkin]

09:57 AM on 06/05/2009

Makes perfect sense. That's why GM and Chrysler are in trouble. No one wants to drive their cars.

[DavidFlores]

09:44 AM on 06/05/2009

Zipcar's experience, I think, reveals what has to be the biggest barrier to reviving these automakers: nobody wants to even BORROW their cars for a few hours.

Ouch! That's the harshest assessment of the US auto industry I've heard in a long time.

[musky13]

09:32 AM on 06/05/2009

I hate to make a blanket statement with very limited information, but Scott Griffith is simply an uninformed idiot. The number one and two selling vehicles in the world are Ford and Chevrolet pickup trucks. Why do all of these folks buy such crappy cars? Has anyone noticed the obvious that in Japan all healthcare is provided by the government? The American automakers are at a 10-15% financial disadvantage right out of the box. I consider it a miracle they even come close. Look past the end of your noses, there's a big world of information out there.

[dreadylocks]

10:27 AM on 06/05/2009

I doubt the #1 and 2 selling cars in China are pickup trucks. Maybe you should amend 'world' to America.

[BDW]

11:09 AM on 06/05/2009

You're right.....they're buicks

[FunkyP]

10:47 AM on 06/05/2009

The financial disadvantage pales in comparison to the quality disadvantage. When GM introduced 'planned obsolescence'; the concept of making cars that won't last so consumers have to buy another in just a few years. Meanwhile, my 1990 Volvo (Volvo now owned by Ford, unfortunately)
runs as good as it did when I first got it (used) in 1996.
That reputation for poor quality is hard to shake, and disdain for the American consumer (especially by opposing an increase in CAFE mileage standards) in cranking out Hummers and Tahoes to assuage the genitally deficient males who flocked to buy them. Guys like the poster below who gets his sense of rugged manliness from his pickup truck.
Yee haw.

[Alan Lachapelle]

08:33 AM on 06/06/2009

The financial advantage pales in comparison to nothing. 173 billion in liabilities, a large chunk of that being pensions and medical benefits, for a company with 82 billion in assets, is pretty significant. There is no quality disadvantage with GM products, and Chrysler is making the best products they ever have. The gap doesn't exist, Buick is the most reliable brand and Ford is the most dependable producer.

When they started to do the planned obsolescence, it was the same thing any producer in their position would have done. Selling the volume of cars they were in the 50's and 60's was not sustainable given the population able to buy vehicles if the vehicles would last 25 years. Things like this were the only way they could guarantee the lavish UAW benefits. It was a business decision and any company is obligated to make the best decision in the interest of its shareholders. Not to be environmentally friendly, not to be social activists, not to promote some political goal: making money is the only objective. If you think otherwise your jaded. So don't get butt hurt that GM did the same thing any company in its position would have done.

[sja11]

09:27 AM on 06/05/2009

american cars just aren't made well because of mass-production. for years they were more concerned about the quantity than the quality and now they are paying for it because their reputations have gone in the crapper.

its not the average american citizen's fault that GM and Ford management turned into greedy morons.

I don't feel bad at all not wanting an American car if there are far superior products out there from other countries.

[Rosy]

08:35 AM on 06/05/2009

According to Griffith, "14 million people can walk to a Zipcar in 10 minutes today."

Um, exactly. 14 million, out of a population in the US of what, 300 million?
Don't get me wrong, if this service works for some people, that's great. More power to you.
But no one should draw the conclusion that whatever his customers want, is automatically what the rest of the nation wants. Different people have different needs when it comes to vehicles--depending on where they live, where they drive, their family size, among other things. Brand preferences often have regional biases as well. That should be so obvious it shouldn't require stating, but apparently Mr. Griffith and some others just don't get the message.

[Skutch]

09:21 AM on 06/05/2009

14 million in the US, Canada, and the UK. Which isn't bad, considering they are only present in 52 cities.
They asked Griffith the question, he answered. Where do you see him drawing a conclusion that the preferences of his customers are indicative of those of the entirety of the American population?

[june52009]

08:09 AM on 06/05/2009

how super gay http://dailynoz.blogspot.com/

[MocksNix]

07:12 AM on 06/05/2009

Little tiny cars look funny, are unsafe at any speed, and most certainly aren't chick magnets.
Citified dweebs and the masculinity-impaired are the market for ZipCars.
I'll keep my good ol' F150, thank you.

[Tabasco]

08:28 AM on 06/05/2009

Sorry to burst the 'safety' and 'chick magnet' bubble, Mocks.

Do you read the crash safety reports from Consumers, Car and Driver and the USTA? Small cars made by Toyota, Honda, Subaru and Saab (as well as a few GM and Ford models) have been at the top of the overall car/truck/SUV crash test ratings for over 25 years. The cars are lighter, crash with less momentum than bigger cars and trucks and collapse away from the reinforced passenger compartment.

While more damage is done to the smaller car in collisions with bigger cars and trucks, less injuries occur to the drivers and passengers of the smaller cars compared to injuries sustained by those in the bigger vehicle.

As far as the 'chick magnet', have you been on a college campus lately, or seen what more people in their late teens to mid 30s are driving? They ain't pickup trucks or super-sized SUVs. They're smaller, more fuel-efficient 'funny-looking-little-tiny-cars'.

[Sunnyhorse]

09:44 AM on 06/05/2009

My husband and I own a Dodge Ram because we keep horses and a truck is essential for pulling a trailer, hauling hay, and carrying out various tasks on our place -- but, because I work from home, it sits in the driveway most of the time. It's our other car, a Mini Cooper, that racks up all the miles. My husband, no "citified dweeb," gets compliments on it from women all the time.

[PlayTOE]

06:16 AM on 06/05/2009

When I rent a car, I try to avoid getting a GM product. When a rental agency sticks me with one at the last minute, I complain and (if I can) go elsewhere.

[dswansoniceman]

01:48 PM on 06/09/2009

that's over the top. new GM cars are just fine

[grave-robber]

01:55 AM on 06/05/2009

Not entirely sure how Zipcar works, but I doubt it works in suburban cities. I'm sure if I looked into their policies I'd find out, but what stops people from taking them? How do they know where one is? What if they need towing power, extra trunk space? It's a nice idea, but I don't know how practical it is.

[grave-robber]

01:44 AM on 06/05/2009

I don't want GM either. I'll stick with Nissan, Toyota, etc.

[AurigaRa]

12:44 AM on 06/05/2009

love my Pontiac Vibe!

[whispurr]

03:25 AM on 06/05/2009

your pontiac vibe is powered by a toyota matrix engine.

[Skutch]

08:47 AM on 06/05/2009

The Vibe was co-developed with Toyota. The powertrain is the same as in the Toyota Matrix, and both vehicles are built on the same Corolla platform. In fact the new GT and AWD models share the same 2.4L engine as the Toyota Camry.
But yeah, the Vibe is a fantastic vehicle.

[Clayton139]

12:04 AM on 06/05/2009

http://horsepowersports.com/fuel-vapor-technology-3-wheels-180hp-92mpg/