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Wow, first time logging on in a long time... It looks like the news you linked has expired, but imho, it looks like this company doesn't really have a competitive edge. They're making a knock off CTS, don't seem to have the capital to really compete, and even if they sold really cheap, Chinese cars have poor crash standards that would make me opt for older Japanese beaters. Further, I think the only shot they have, unless they can come up with something innovative, is to get absorbed by a bigger company as the Chinese auto market consolidates. It seems this company really isn't doing anything to move into the future...
Ok, double checked with my friend again and she said Aero was not there. You can check here too. http://www.performanceracing.com/tradeshow/
Dr. Gas appears to have been there, but I didn't ask her to look for Dr. Gas, just Aero. She continues that the only way they were there is if they were attendees. I know there were conflicting statements, but I'm very confident of my source, which is pretty much from the horse's mouth.
How close is your buddy? Because mine actually works for PRI and that's what she told me: no money, no booth. I just talked to her again and she said she didn't see them. Next step will be to get a confirmation. I want to know what the hell is going on...
Are you serious? I'll have to have another talk about this with her... =( Was your friend able to pick up any info? I wanted to see what they had there.
I haven't been here in a while. I'm just wondering if anyone knows that Aero/Dr. Gas wasn't there at the PRI show. I asked my friend, who works for PRI, to grab me some information on their product lines and any other information they might have and I was told they didn't shell out the money for the booth.
Dare I say it? Has the PPS bottomed out now? PP, what do you think?
I never doubted the product, but it's like, "Can we please stop the hemorraging of the PPS?"
You've got to be kidding me...
They're "producing" or do you mean developing? If you mean the latter, they wouldn't put it up there.
Just curious. Anyone know how much it would have cost for a booth at the LA Auto Show?
Nice to know price won't be dropping today.
I'd like to see this article as well. TIA
All but Borla are focused on a small range of products and mostly sport compact imports at that. They make very specific exhaust components, whereas Aero's muffler is universal. I wouldn't worry too much about the type of competition out there. Even if one were to get a full exhaust system, the muffler can be changed out no problem, if the customer chooses to do so.
I'm hoping sales to the light trucks will be their bread and butter and I do think it's possible to do it, but my confidence in the company (not the product) is a bit shaken, I have to admit.
What's with the concern for Freightliner? How many trucks do they sell per year compared to the number of light trucks sold by the big three? They wouldn't even be a drop in the bucket compared to the number of light trucks sold.
Gas mileage is a part of the reason for weaker sales, but that's not a huge reason why their sales are down compared to the Japanese. There are plenty of American cars get similar, respectable figures that the Japanese have. Focus, Cobalt, Aveo, Escape Hybrid, etc. will all put out respectable numbers. Quite simply, the cars are just not up to par (i.e. build quality, reliability, driving enjoyment) and that accounts for a huge chunk of the sales deficit.
Mileage is not as big an issue and the gap in gas mileage of comparable Japanese counterparts is not enough to warrant the cost of Aero's muffler. The current cost of the muffler alone would cut into their bottom line, which is already in the red, and Aero does not have the means to go OEM at this time, imho. Your statement of "if they could increase mileage by 25% and get ahead of Japan..." could be true, but most likely won't. Why? Because of costs.
There is practically no difference between the mileage figures of full size domestic trucks and that of Japanese. They'll all get roughly 11-13 mpg in real world conditions. In the eyes of the domestic auto manufacturers, why spend more? They're already better than the Japanese trucks and outsell them many times over.
Imho, it would be better to focus on the aftermarket and focus marketing on domestic trucks because they sell the most vehicles in the country year after year and truck owners can be counted on to put on aftermarket parts AND they have a greater incentive to add on products that better their mileage. Any dreams of OEM is a long ways away.
This is not true. Automakers have always tried to save the extra buck. Look at all the crap GM has churned out until recently a few years ago: the Cavalier, the old Saturns, the entire Pontiac line, etc. And for Fords, how many recalls have you seen in the news where the recall was attributed to some tiny little part that caused cruise control to malfunction or other crap like that? All because they wanted to save on the cost of components. Automakers will always do something that's publicly perceived as dumb.
I like the product, but I'm so disappointed that the pps is sub-penny right now. How low will this go and what's being done to stop it?
What would their lasers do mounted on Strykers and the birds?
First of all, it was a sincere question and I am well aware of the realities, especially the one that has no sales whatsoever, unlike yourself. Second, it was a risk and I ended up losing some, but if it was a company that was actually moving forward, I would have kept it longer. It didn't and there are no sales, so I sold. I don't know what kind of homework you did that wasn't already up here, but I'm sure it can't be much since the company seems so secretive. Remember, guessing and expecting what will happen is not homework... So in the end, I now keep an occasionally watchful eye on the stock for the purposes of quick gains, which is pretty much all I see this stock is good for.
You assume everyone just wants to ride around in completely stock cars. If you're wondering where the market for the mufflers are, the answer's in your post. "High performance." There will ALWAYS be a market for squeezing out easy horsepower/torque. If it gives you better mileage on top of that at the expense of louder sound, it's a no brainer. It isn't a wear and tear product so you put it on once (very little time and cheap labor) and forget about it. America sells 16M cars and trucks a year. Even if it was sold to only a fraction of 1%, that's a lot of sales.
Again, that said, we'll have to see where the company goes with this. This isn't to say the company's perfect and will get their s--t straight. As long as they remain in the pinks, it'll be a risk, though you have to admit, it's pretty damn entertaining.
He's made so many claims already. What's a better validation is there than to have people buy and use his products to support those claims? They should be selling like hotcakes by now.
My question is, when and at what price will this bottom out for a good bump in profit?
Dynos aren't something that's available on every street corner. If the closest one happens to be located on the highest peak, then that's where it'll be done. There are formulas you can use to make adjustments for elevation.
So what's with the positive outlook after your negative phone call from before the 8K? What's changed?
Personally, I think it will be some time after SEMA. Provided the product is everything it's supposed to be, word will spread quickly, but will still take some time. It'll be a good place to advertise to a broader crowd and not just trucks.
The link doesn't work. I'm not quite sure what the contents were, but as far as I know, the Tundra's still the 4th best selling truck. But my point was that they marketed to the area that consistently sell the most vehicles every year and also have customers willing to put their type of part on a new vehicle.
It did turn out to be quite costly, but imho the risk was justifiable. The Nascar crowd is the same kind of people who buy the trucks. And what vehicles consistently sell the most in America year after year? The F150, Silverado and the Ram consistently sell way more than Camrys ever will, even with this oil price. Also, from my perception, only enthusiasts put on aftermarket performance parts on their cars, but I see more truck buyers who do this even if they're not enthusiasts.
Now you're changing the subject, though I do agree that it does reek of poor management. However, it sounds as though you really won't ever be satisfied with this. I don't know about you, but my position is if I didn't want to take any risks, I wouldn't have invested in a pink sheet.
They do, but unlike us, they don't use catalytic converters, resonators or mufflers, except when tracks have maximum decibel requirements. Race car exhaust systems are straight through without restrictions.
Oh? I didn't know that... I must have missed that one. I was actually just referring to it as a hypothetical situation. lol
OT: When I read "pipe-bending," there was a painful image in my head... :(
It doesn't contradict at all. His machines can be capable of churning out an X number of mufflers, but if he doesn't have enough money to buy raw materials to achieve that number, say, because he happened to spend a bit too much on marketing with Nascar (as was hinted in the PR), then he'd still be short on supply, though he is still capable of making a maximum of X amount of units.
Good post. A few things to add:
5. The steel output of China is a couple times greater than the output of the US and Japan combined. No worries about supply. They do use ores that are supposed to be inferior, but what we have isn't structural steel or anything like that so it's fine.
6. Rusty Wallace is good for marketing/advertising, but he's a spokesman and nothing more. Be careful about the whole celebrity spokesman angle. Take a look at Prolong Super Lubricants as an example and the high profile spokesmen they had for their crap product. Their courtcase is well documented on the SEC website.
Any guesses as to the pps come Monday?
I don't want to start or be the part of starting any rumors, but I mentioned that since the heavy commercial marketing started earlier in the year, I just said that it was too soon for the results to show up in the 8K for the first half of the year. My opinion, not fact.
Do you know when Hunsaker said this and to which time period he referred to? I think the time is important because of the marketing started earlier in the year that might not be reflected in the 8K we saw.
I like that idea of the muffler being a port installed accessory. Those would be exactly the kind of middlemen Aero could use.
Maybe as an original owner of Aero, you could tell me this: To whom could we go to ask about how/where they are focusing their marketing? I don't like telling people how to do their jobs, but we own a substantial chunk of the company and, personally, I think it's a critical time to start getting it right, and I wouldn't be below doing this...
Also, would you happen to know what the profit margin is on the muffler?
I'm glad you're a car guy so I can talk to you about this. I have a question about your post. My auto teacher was around your age so I'm sure you guys have the same basic principles in mind... =) I had figured in the backpressure partly because of the increased mileage claims. Now, if Ganassi's cars increased in power, then, as the saying goes, more power equals more fuel right? The drawing of more gases out of the exhaust would create extra suction which would result in more power by sucking in more fuel through the intake while the valves are in overlap. You also mentioned the increase in torque. I'm not sure where in the rev range this would occur, but we both know on the lower end, backpressure actually helps it, and losing more and more of the pressure moves it increasingly higher in the rev range. So, either 1 of 2 things would have to have happened. One, Ganassi is losing some efficiency in the pipes, pre-muffler, or two, the muffler's increased mileage can't be had. What are your thoughts?
So now that the cards are on the table, what do you guys plan to do? I know things look bad right now and I'm pretty sure there will be quite the sell-off come Monday, but as bad as the financials look at this time, there's a few things that are keeping me on the fence.
1. Despite the management mistakes discussed earlier, Aero played it right targeting the truck crowd. Ford sells 800,000+ F150s year after year; the Silverado is close behind and the Ram does respectably as well. On top of a high volume of fresh truck sales every year, there's also the existing trucks and cars, too.
2. The combination of high truck sales and high gas prices, products raising mileage have a place in the market. My dad has a Navigator I'm planning to put an Aero muffler on, once I get more baseline MPG figures so I can do a comparison. (I'll post that here when I'm done...). Anyway, on his SUV, an improvement of 1mpg driving 10k miles per year at 12.5mpg will pay for the muffler that year.
3. Unlike the car crowd, where just enthusiasts immediately purchase aftermarket parts, the truck crowd seems to do customizing and aftermarket products even if they're not enthusiasts. I'm not saying this is a cold, hard scientific fact, but as an enthusiast myself, this is my observation.
4. Several tens of thousands would be totally reasonable for sales figures on a yearly basis. Multiply by around $160 for the average muffler and gross revenue from mufflers is into the millions.
5. Another of my observations is that the product is not well known. I'm a car guy and I didn't know about it until I got into FCCN myself (I'm not a truck guy nor do I watch Nascar so I guess that explains that...). I don't think it's unreasonable to think the marketing done earlier in the year will have an impact from this half of the year onward. Good automotive products tend to spread quickly.
Very quickly, for those wondering how the muffler might improve MPG, it goes something like this: OEM mufflers are designed to minimize noise at the expense of efficiency of the exhaust flow. When you open up that flow, it will do several things. One, you won't gain horsepower, but the gain is actually freeing up power that you already had. Two, the loss of backpressure will result in increased upper rpm power, but a slight loss in the lower rev range. And the increase in mileage comes from having the engine not having to work as hard to breathe via the freer flow. The Aero seems to be a good compromise between a completely open end and a restrictive OEM muffler; it should, (theoretically) have just enough backpressure as to not completely lose low end power).
That said...
1. The debt seems pretty damn heavy and growing. The feeling I get is that now that they've done some heavy commercial marketing, maybe they reached a point of a make or break, since I don't see a company continuing to run this kind of deficit too much longer. I understand new companies do run at a loss for a few years, but, imho, I believe it's good time to put up or shut up.
2. I don't buy the "we don't have enough supply to meet demand." That just reeks of managerial errors.
3. The part in the 8K that talks about the reverse split gives me the chills. I'm not sure how substantial of a reverse it would be...
4. Timing of the release of the 8K was... not nice.
It's a bit difficult to think of everything at once, and I'm still a noob when it comes to trading, so I thought I'd put this up here so I have everything together and also see what you guys might be able to add here.
If that's the case, middlemen would be needed as they produce efficient batches. If they couldn't keep up with demand, prices should have gone up. Either way, poorly managed, though this can be fixed...
Of course, the flip side to this is that it means the company didn't allocate their resources to expand production, which brings into question the ability of their managers.
As bad as the big picture looks at the moment (moment of silence), I bet there'll be an increase for the second half of this year from the marketing done in the first half.
But that said... What a hole...
Eh, whatever happens, good thing I didn't put in what I couldn't lose...
I'm just curious, wouldn't the results of the marketing that started earlier in the year (i.e. Speedtv, Nascar, etc.) show up AFTER the period covered by the 8K we see today? I'm not sure who was talking about the growth of the company and all that; I must've missed out on that, but doesn't it make sense that the expense of the marketing show up on this 8K, but the results show up later? Correct me if I'm wrong; I'm not exactly the brighest bulb in the shed...
So they went through with all this despite the losses shown on the 8K. I've got a few questions (particularly for those who were skeptical):
1. If this was going to end up with the "I told you so..." people and such, what was their motive for doing this in the first place?
2. What is their end goal? I ask this because they actually went through the trouble of being a reporting company and followed through with what they said, unlike, say, SLJB or USSE, and doesn't seem like they would stop at this point.