By Phil Ressler
October 23, 2007 -
I’d just slipped the nozzle into my Cadillac XLR-V. A dark Merc SL550 rolled up, its driver eyeing my Bowling Green Batmobile. As he busied himself with the credit card ritual, every few seconds his eyes darted sideways to the Caddy. “Mind if I look inside?” He sat behind the wheel, running his fingers across the interior surfaces. “Nice,” he pronounced. “Comfortable. And it’s easy to see out. There isn’t as much storage as my SL, but I’d be OK with that.” As he exited the XLR-V, he issued his verdict: “I wish I had the courage.”
“It’s been completely reliable,” I assured the SL guy, figuring he was wary of GM’s reputation for mechanical “mishaps.” “I’ve had it for over 23,000 miles without any problems.”
“That’s not what I meant,” he said. “I wish I had the courage to buy a car I’d have to explain to my friends. I love the style; I really admire it. But no one would understand if I bought a Cadillac. You have more guts than me.”
Americans scraped their way through the Depression, prevailed in two global wars, hung tough for 45 years of Cold War, went to the moon and opened our markets to help lift the world to prosperity. And now it comes to this: a man who likes a car designed and made by Americans in the United States– which he can clearly afford– is squeamish at the prospect of explaining an American-made automotive choice to his peers.
It may be unpopular to say it, but the existential threat to Detroit’s Big Three has a consumer component. There are 360 degrees of blame. Consumers must step up too.
Detroit’s products have changed. Whether you credit government intervention, consumer activism or foreign competition, there are no more rusting Vegas, exploding Pintos and 8-6-4 Cadillacs that can’t do math on the fly. As this website has pointed out on numerous occasions, product quality data says pretty much everything offered to American car buyers is mechanically reliable. Even if that salient fact hasn’t yet reached American consumer’s ears, reliability is not as important as it once was. Car choice often descends into pointless arguments over interior plastics, comparative depreciation and social acceptability.
This is why American manufacturers haven’t enjoyed the sales resurgence their new, improved products deserve: prejudice. American consumers share an irrational belief that American-made goods are inherently inferior to those produced by Japanese, German and even Korean manufacturers. A VW may find its way into the repair shop twice as often as a Chevrolet, but the German-branded car is still perceived as a higher quality product simply because it’s German.
A recent study by J.D. Power revealed that 80 percent of America's new car intenders won’t actively cross-shop either domestic or foreign, depending on their preference. While you can blame this horrific statistic on Detroit’s previous sins, it’s still a blanket condemnation of the Americans consumer’s idea of fair play. “You gotta put Mercury on your list,” the ad practically begs. And so it should be. Again, it may be unfashionable to suggest, but there is a penalty to pay for this blind bias against home-grown (or at least sold) products.
The United States is the only First World country projected to be substantially larger in population at the end of this century than it is today. The theory of comparative advantage says we should let our uncompetitive industries die. But of course, economists always neglect the human factor of politics. We have global responsibilities. We will continue to be a magnet for those with hope, and must accommodate an expanding, diverse population. We need a full-spectrum economy, not one divided between wealthy and struggling.
Manufacturing jobs are the bridge. As the US Department of Commerce reported in March, 2007:“Auto manufacturing remains one of the economy’s best paying industries. Production workers’ average hourly earnings were projected to reach $30.02 (excluding benefits) in 2006. Wages were 79 percent greater than the national average for all manufacturing industries.”
They also note that reductions in employment by GM, Ford and Chrysler will not be made up by transplant hiring. Beyond that, transplant sales do not support the tens of thousands of domestic high-salary headquarters jobs that a Detroit 3 purchase does today.
A holistic understanding of our mutual social contract suggests that we should at least give Detroit a fair shot at our patronage. In a 16 million units annual new vehicle market, can we find one million more buyers for the best, most competitive domestic iron?
Having driven the primary competitors in the volume car biz, I’m convinced that if a million import bigots dropped their bias against domestic iron and truly reconsidered what constitutes meaningful difference in a car comparison, they’d make the right choice– and not regret it. And we’d all be stronger for it.
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End of Comments
October 1st, 2007 at 6:42 am
So true, so true. The bias against the US manufacturers is unbelievable, even from the consumers who do come in the lot. There are those willing to give another chance. At my dealership, the Lincoln MKX is doing a great job at getting import buyers to switch back.
October 1st, 2007 at 7:02 am
Great editorial!
Detroit lost an entire generation of buyers starting in the mid 70’s, its effects are still felt today. This lost generation is influencing an entire demographic segment.
The idea of having to explain “how could you buy an XLR-V when an SL500 is a safer choice”. Is a poignant example.
All cars are inexorably shifting from a mechanical platform, to an electronic platform with the quirks and glitches associated with all things electronic. Who is rating the electronics in cars?
“Import bigots” is priceless.
October 1st, 2007 at 7:04 am
I’m living proof of said bias. My personal history with domestic cars has completely taken them off the table for future car purchases…I won’t even consider them. Unfair? Maybe…but to me they aren’t doing much to win me back either.
October 1st, 2007 at 7:05 am
1) 10-year, no-excuses, no-BS warranty. At least as good as the Koreans, if not better. And actually honored without grumbles by dealerships.
2) Interiors that don’t suck. I cannot tell you the number of GM rentals i’ve driven with 20k on the clock that felt like they were on death’s doorstep. I don’t care why, it is not my problem. I want to know the car is in it for the long haul. Fix it.
3) Kill half the dealerships. Employ an undercover team at HQ that goes out and actually examines the dealerships for oily service writers and Tarlek-ian salesmen. Then close them down. Don’t say it can’t be done, I don’t care, as a consumer its not my problem. I want good service for the second-most expensive asset i’ll ever purchase.
4) Guaranteed trade-in price to offset catastrophic depreciation. Can’t do it? I’ll happily go over to the Honda dealer where I know the residuals will be high. Why should I waste my $ on the domestic’s poor business practices? Give me the reassurance that even if the car is a POS, it won’t be a financial bloodbath.
If these steps were taken - and the product wasn’t terrible - it would not take many years for the domestics to reach the level of esteem that the Koreans have achieved (ie, not top-rung, but not dismissed out-of-hand by most consumers either.)
October 1st, 2007 at 7:06 am
Gotta agree. BMW makes some awesome cars, so does Mercedes.
But for my money, I’ll take a new Z06 Corvette and watch them all drool. And if I drive like an even slightly sane person, I’ll get between 25 and 27 MPG on the highway and have the ability to embarrass just about everything else on the road. No matter who makes it or how much it costs.
Not bad for “American Junk”.
By the way… If anyone is interested, the very best of the best in the Audiophile World of high-end electronics is completely in the Domestic Venue.
So will everybody PLEASE stop bashing everything “American”?!!!
Just remember… When you disrespect all things American, you’re disrespecting yourself as well.
October 1st, 2007 at 7:39 am
My first issue with Detroit is their preference for pimp rides which show a complete disconnect from how the rest of the developed world produces cars.
Domestic brands tend to hold onto to dated transmissions, engine designs and suspension components until the buffalo bleeds or Lincoln screams.
Third, but not least, the dealer experience at most domestic brands is pure KIA.
October 1st, 2007 at 7:53 am
I’m sorry but purchasing a car is not an investment. The only way to cut down on losses is to get one with the highest resale value and domestics are unfortunately not doing so well in that department. (neither are some German cars). Maybe they are overpriced to begin with?
There might be one or two domestic brands with good resale (perhaps the Wrangler) but America has one of the best road networks hence the target market is slightly limited.
October 1st, 2007 at 8:03 am
One of Detroit’s main problem in wooing American customers (as I see it) is this:
In the 1980’s to the late 90’s American cars were the only ones to be seen in. But in the last 10 years or so, globalisation crept into the North American market and suddenly it wasn’t fashionable to be seen in Detroit steel. Nothing against american cars, but people suddenly had an image to maintain and now are staying away from Detroit in their droves. Most have horror stories from the car to the dealers and to be honest, that’s a problem I don’t think anyone can solve, once you burn a customer it’s likely they won’t come back, better off wooing the next generation. But now the current generation don’t want to be seen in american cars because it’s just not fashionable. So now Detroit have 2 generations of customers not buying their cars!
It can’t be helped, that’s just the way fashion works, just ask anybody in the clothing industry. Burberry in the UK is a highly respected brand abroad, but people in the UK wouldn’t been seen dead in Burberry, foreign labels are much more fashionable (Hugo Boss, D and G, DKNY etc). Detroit do have some world class engineers and left to their own devices they would come out with world class cars. But accountants and managment always know better, hence, we end up with (in my opinion) vulgar cars like the Cadillac Escalade or the Chevrolet Aveo (a budget car which tightwads would turn their noses up at!) Detroit do have the talent and flair to make the next world class car, but don’t have the freedom or budget thanks to years of mismanagment and, believe it or not, some customers don’t like to patronise a company like that and would rather buy a car from a company that’s moving forward (i.e Toyota) which brings me back neatly to fashion.
Detroit’s only hope is to DICTATE the next fashion rather than imitate it. Oh and fix their perception gap, reliability, treatment of customers, management and dealers…..!
October 1st, 2007 at 8:05 am
“A recent study by J.D. Power revealed that 80 percent of Americans refuse to even consider buying a domestic car.”
Wow! Is it really that high? I bet this is just for cars and not SUV/Trucks
I can’t even get people to look at a Ford Fusion. Maybe, since Mulally is on a renaming kick, Rename the Fusion to “HondahFusion”.
October 1st, 2007 at 8:08 am
Rollingrock, those are just bad steps. You might as well ask for the sun, moon, and stars on a silver platter.
1. Would you expose yourself to having to fix problems caused by abusive and neglectful owners? A no BS, no excuses warranty does just that. Warranties are supposed to guarantee the workmanship of a vehicle, not give you a free engine because you failed to change the oil for 15000 miles.
2. I made it a point at last year’s auto show to sit inside every domestic car to see just how bad the interiors were. Perhaps my standards aren’t as high as everyone else’s but they sure didn’t feel ready to fall apart. Neiter did the Escape I rented. Gutless, I’ll admit that. Out of curiousity, which vehicles did you rent that felt ready to fall apart?
3. You are aware of franchise laws that vary from state to state that protect most dealerships from being shut down, right? You do remember how much it cost GM just to shut down Oldsmobile, right?
4. GM heaps loads of discounts on their cars. Now they’re supposed to pay you even more if the trade-in value is low? Aside from this being ripe for fraud, it’s just silly. That’s like asking Honda to guarantee a replacement Civic since they populate 8 of the top 10 stolen cars list.
You can’t just dole out simple solutions for complex problems.
October 1st, 2007 at 8:09 am
Typically, as the writer of the editorial did, the car in question was not a bread&butter car. XLR-V, no less.
The Corvette falls into the same category. Go to the GM Message Board and see all the truck owners swear by their Silverados and bitch about the Tundra they wouldnt be buying anyway.
But how about buying a Cobalt over a Civic? A Malibu over an Altima? Aveo over a Scion?
GM could make the most reliable, dependable cars in the world right now with impeccable fit and finish. No matter. If the car lacks consumer appeal, if the driving dynamics are not what people enjoy, it’s all for naught.
There are reasons why 80% of the US public do not buy domestic cars. 2 generations later, they’re not even on most peoples radar screens. And the puclic is to blame? Our former enemies have been forgiven, but those customers that used buy domestic feel the companies havent supported THEM, and since many feel they were screwed by our own, no need to reward them by giving them another chance to do the same.
Work in a dealership as I do, you hear it from older former domestic car customers all the time.
October 1st, 2007 at 8:10 am
I own an american car (plymouth neon) and a japanese one (Subaru WRX STi) as well as a japanese bike (suzuki gsx-r 600).
The neon I bought used for $1k a few years ago with 122k on the clock. It’s not a bad car, fairly reliable and cheap to fix. I went with my wife at a constant 55mph on a trip to WI from Chicago in the right lane fora 2-3 hour trip and averaged 38-39mpg. The car now has 156k on it and I really have nothing majorly bad to say about it as far as reliability. But this is NOT the only thing that is important to me.
Here are my comments
1) 3 speed auto ? 3 SPEED ??? WHY? If it wasn’t bargain basement I wouldn’t have bought it. Never would have even considered it new.
2) electronic nothing. It even has a tape deck, not a cd and it’s a year 2k model. No power windows, no power doors, no way to unlock the back doors from the outside.
3) The outside mirror positioning sucks. It doesn’t work well (it came broken & still is broken).
4) It’s automatic. Another reason I wouldn’t have considered it. Some american cars you can’t even get a manual as an option.
5) 0-60 in 11 means it can’t get out of it’s own way.
It’s fine for the wife who maxes out at 30mph in the city and is a super-over-cautious careful driver who just needs it to get from one place to another.
I bought my Subaru due to no American company making a rally bred car. 0-60 in under 5, for 30g’s with all wheel drive & dccd.
I don’t think any american manufacturer makes anything that competes with it (Don’t mention mustang GT’s. They are fatter & slower and have much higher depreciation & cost basically the same, new). I was also looking at an elise at the time but couldn’t justify the extra $10k and higher insurance.
Sportbikes…I have a gsx-r 600, 2005 that I paid just over $8k out the door for. Where are the american manufacturers ? Buell ?
Perhaps if American companies made something in _any_ of the classes of vehicle I want to buy, I might consider them.
October 1st, 2007 at 8:23 am
Very interesting editorial. My wife currently drives an ‘02 BMW 325xi with over 90k miles on it. She plans to replace it in about 6 months when it will be over 100k. When I suggested she look at the new Caddy CTS she just laughed at me and said “Are you kidding?”. This is the hurdle the domestics must overcome.
October 1st, 2007 at 8:29 am
This is a thoughtful, well-written editorial. It addresses an important topic. It deserves responses from us that are equally trenchant, not diatribes.
I am going to buy two new cars in the coming year, one a small hatchback and the other a four door sedan. I plan to keep them for at least 8 - 10 years. So, the following questions are not rhetorical.
Is there an American equivalent to the Mazda 3 or the VW GTI? Right now, I’m not aware of anything, ‘tho perhaps the coming Saturn Astra might fill the bill?
And… is there an American equivalent to a four-cylinder Honda Accord, Nissan Altima or Toyota Camry? Maybe the coming Chevrolet Malibu?
Any and all (well, almost) suggestions would be welcome. Despite poor experiences with Detroit and American dealerships in the past, I’d be willing to try one more time.
October 1st, 2007 at 8:30 am
Count me as one that wouldn’t own a domestic. Averaging 60k miles a year running service taught me that the domestics were junk. This may no longer be the case but the dealers alone keep me away.
If there is such a thing as a lost generation for Detroit then I’m the poster child.
October 1st, 2007 at 8:35 am
How many people know that small Japanese cars from the mid-1970s exploded at the same rate as the Pinto? Ford got in trouble not for the explosions, but because their engineers worked out a solution for the gas tank rupture problem that was ignored by management. An irresponsible press picked up the story and invented sensational tales equaling Pintos to hot nitroglycerin.
BTW, a friend’s father owned a mid-70s Pinto. As I recall it was not a bad, car when compared to the other 70s cars(they all pretty much sucked).
October 1st, 2007 at 8:38 am
I’m with Ken Strumpf.
I suggested to my wife replacing my Nissan Maxima with a new Pontiac G8. She laughed hysterically. And, her father used to work for GM…
October 1st, 2007 at 8:38 am
We’ve purchased 3 new cars in the past 6 years. At no time did the domestics make the short list, as we’re both a cheapskates (and as qa said, cars are not investments) but willing to pay a little more for safety features, as the kids are on board.
Fall 2001: mid-sized sedan, short list Camry, Passat, Altima, as those had the most safety features for for $20k. No domestics had side curtain airbags, so no go.
Spring 2004: minivan, short list Sienna 8 psgr. Nothing else was even considered - you mean I was supposed to look at the pre-CSV GM minivan?
Winter 2007: small cheap vehicle that could fit 3 car seats simultaneously, short list Mazda5 and Kia Rondo.
Me, a bigot? 3 in a row means I suppose so, but simply stated, domestics didn’t make products worthy of our hard earned dough.
October 1st, 2007 at 8:39 am
Being a car guy, most of my friends and family turn to me for automotive advice, (anyone else experience this on a daily basis?) and I try not to have a biased opinion when they ask me “What should I get?”
The hard part is not that all American cars suck, they don’t. The hard part is convincing people of that. A friend recently came to me asking what car he should get, he was in the market for a midsize sedan, with a 4 cyl and manual tranny. Tough choice to get him into a domestic with a manual!
In the end we went looking at Altima’s, Accords, and Fusions. He was immediately turned off the Fusion until I casually mentioned that it was essentially a Mazda 6 under the skin. He got the Fusion, and loves it.
Funny how the best domestic cars seem to be based on foreign designs/platforms. The Astra is getting alot of attention for being a competative domestic car but thats because it’s an import!!
October 1st, 2007 at 8:39 am
As KatiePuckrik mentions, it really is all about fashion. American cars are now unfashionable to the point that anyone who actually cares about fashion avoids Detroit nameplates like the plague.
Also, more and more people are only exposed to them because they have to rent one. That gives zillions of people (Americans and foreign folks alike) the idea that American cars are dull, cheap, uninspiring plastic cars. But the thing is, you can easily make that very argument about the vast majority of American cars being sold today.
And then there’s the plummeting resale value…
October 1st, 2007 at 8:45 am
“I wish I had the courage.” The statement by the Mercedes driver pretty much sums up the 80% who wont’ consider domestic cars these days. They’re a bunch of mindless, robotic conformists that buy the same thing their friends do, afraid not of their product failing them but afraid of being unique and different and buying something based on their own best judgement and needs.
That’s pretty sad when you think that the strengths we Americans like to pride ourselves in are individualism and an independent, creative, pioneering spirit. Our consumers instead have become a bunch of timid sheep, afraid of stepping out of their comfort zones and trying on something different. If that’s truly the case, then there’s no hope for the Detroit Three, and no hope for this country.
October 1st, 2007 at 8:49 am
I’m not certain about this 80% figure - I think that the statement should be “80% of import intenders/buyers would NOT even consider a US brand vehicle.”
I know I’m in the 100% category of “never again”. But then, I’d pretty well bought mostly American branded stuff since 1973 until 2002, So I’d say 30 years is “enough time to get it right” wouldn’t you? Especially considering the fact that this 30 years was the time-frame in which the Japanese car manufacturers improved and took so much market?
So, Detroit Inc, where was your competitive spirit? Oh yeah, you were too wrapped up in your own little dream world where import brands didn’t matter, and you were only in competition with each other….
So, Detroit Inc dealers, where was your customer service spirit? Oh yeah, you were too wrapped up in YOUR own little dream world where you could treat customers as you wished (poorly) because they’d be back - or maybe they’d trade around between the big 3 Detroit companies (and since the other dealers were doing the same thing, you’d gain some, they’d gain some…)
So for me, it really doesn’t matter what the Detroit 2.8 do any more - I’m simply not interested in considering any of their stuff for purchase.
It wasn’t even a case of “burn me once, shame on you, burn me twice shame on me”. More like about 12 times (I’ve honestly lost count) new and used US stuff.
October 1st, 2007 at 8:49 am
Buyers have been screwed by incentive rebates and frankly the poor resale value too many times. So it is not entirely irrational to not buy a US car, nor is it all the dictates of fashion. Then again, the dealer experience is ridiculously bad compared to the imports (try and buy something good like a ZR-1 and they gouge you, anything else and they try and screw you another way).
And the domestics have never tried to really revolutionize the experience. Yes, dealers unfairly have franchise laws to protect them, but GM could have adopted the no-haggle approach across their line. One way to get rid of dealers is not to kowtow to them.
October 1st, 2007 at 8:52 am
As a fellow Subaru owner (Legacy GT) I’d echo the comments of Robstar and several others, as American manufacturers simply don’t make anything that appeals to me. Where is the small to mid-size sport sedan with RWD or AWD and a manual (and the handling to match)? I realize 95% of Americans want a FWD automatic, but they’re losing my business because they don’t offer a car that I want to drive. Should the G8 (or any other RWD Pontiac sedan) materialize, I’ll take a look at that if I’m in the market, but even then it is going to be a bit too large for me. The Neon (and now Caliber) SRT-4 fit most of that, but FWD? No thanks. The AWD Fusion? No manual. Does Mazda count as American?
October 1st, 2007 at 9:04 am
All would be forgiven if we could just be sure that American cars are reliable. The oft-cited statisticss that show improving reliability are, to the oridnary consumer, useless. I want to to know for my make AND model, how reliable it is. And the question of “how reliable it is” can only be answered by long-term data, not this 90-day foolishness. Three-year data is a good start, but to reassure consumers, it must be given by model. Consumer Reports is the only source (that I know of) that provides this type of info, and according to their research, Japanese cars still have the best long-term records.
Of course, models change a lot over the long term. That’s the whole point of the US automakers’ current round of chest-thumping: the cars are different now, we promise! Maybe they are. But they have to make reliable cars across their lineups for at least six years before they can hope to regain consumer trust. No one wants to be the schlubb who falls for the next K-car.
As far as the whole social contract thing goes… my obligation to my fellow American does NOT include spending $25k on a car which could leave me stranded by the side of the road and facing a big repair bill.
You want to help your fellow American worker? Vote for higher taxes to pay for programs that train them for work where they can be competitive, and to pay for supporting them and their families until they can perform that work. But don’t ask me to spend a huge chunk of my income on a bad product that could regularly make me miserable.
I hope the Malibu turns out to be the next Camry. But I won’t hold my breath, because it will take at least six years to be sure.
October 1st, 2007 at 9:07 am
By no-BS I didn’t mean “fix no matter what”, but rather that historically, domestic dealerships do everything in their power to avoid having to do warranty work. This trend began in the 70s when Detroit was slinging really shoddy junk, and the culture persists. I’ve had no such problems with Subaru, Toyota or other non-domestic brands.
I rent a lot of cars at work. Cobalts = not good. Ions = bad to the point where i can’t believe anyone buys them retail. Aveo = shedding parts while i was driving (door handle). Grand Prix = interior with unfinished metal that actually cut me. I could go on, but I think anyone that rents a lot of cars knows where i’m coming from. The Grand Marquis was nice, too bad it handled like a parade float.
When a patient has gangrene in their foot, you don’t chop off small bits of their foot and leg as the infection rises. You chop off the whole damn thing in one fell swoop. it is the only way to save the patient. GM dealer network = necrotic, black, lifeless. Muster the cash, take the earnings hit for a quarter and do what needs to be done.
In fact, back in the 1980s, i do recall Cadillac offering guaranteed resale value on the Allante. That car was hopeless though, so it didn’t help much. But surely it could be done for the CTS, because it is a competitve product. Right? What better way to get risk-averse people to give it a try.
October 1st, 2007 at 9:12 am
I’m kind of sick of the domestics pointing to the short JD Power surveys and saying they’re as good as anybody. 90 day JD Power surveys says you can get it off the line without it breaking. That’s expected - it says nothing about the long-term quality of the car. As a number of others have pointed out, after 60k miles most domestics feel like they’re ready to fall apart. I keep my cars 5-8 years and over this time period domestics do not hold their quality.
I’d like to see a comparison between the Caddy and the imports in the same segment with 100k miles on it and see how it compares. Resale says not so good.
Have the domestics made improvements? Absolutely. Are they better vehicles than the imports over the long-term? I don’t see it.
Its not just perception. Quit wasting time beating your chest on how good you are and make a better vehicle.
October 1st, 2007 at 9:12 am
I really think that for me, a 24 year old, this is my father’s bias. Some in my generation have picked it up, but I think the “perception gap” will fade with time. Problem is, my generation turns to their parents for purchasing advice and this is where the bias gets passed down - the Big Three made absolute crap in the 70’s through the mid 90’s or so, and those years cemented their image as subpar cars.
In pretty much every segment, US automakers offer an appealing option, if you don’t mind taking the chance that the automaker you buy your car from won’t be around in 7 years or so.
Today’s buyers will eventually drive their Avalons into the grave and tomorrow’s buyers don’t really care half as much about their cars as they do their iPods. So long as the Detroit automakers can keep producing competitive vehicles and stay at the forefront of technology integration, the pendulum will swing back home (especially as the dollar decreases in value and foreign car prices, particularly European, increase).
October 1st, 2007 at 9:17 am
Let’s take my Mercury Sable as an example.
47K the tie rods went. There was no grease, not a drop, in the ends. rear stabilizers broke, flimsy carbon steel with no rust prevention. Tiny brake rotors meant brake jobs every 15K. ABS light came on in the rain, faulty waterproofing on a critical connector (for something as critical as brakes). Head gasket went at 78K miles, exactly how is this related to owner abuse I asked the dealer? transmission lost the overdrive due to cheap c-clip breaking in two. This cooked my transmission as I attempted to get home rather than shellout 1500 dollars to a transmission shop whose only answer was”it has to come out for us to determine what is wrong with it”. Turn signal control fell off at 49K, maybe I should make fewer turns. Oil leaks everywhere. AC blower a victim of faulty brushes , but that’s OK because we will let the owners pay for a new one that is redesigned, removing Ford’s responsibility for another defect.
This contributed to cliff face depreciation so bad I was grateful for a 400.00 trade-in.
These defects are faulty design and engineering, not the fault of the UAW or even the dealer network. And we are to trust theuir brand new cars and engines won’t have gotchas? Take a chance with your money, I won’t
October 1st, 2007 at 9:41 am
My brother owns a Cadillac and a Mercedes. And he is proud of it! Mind you he makes his living as a marketer. Like many owners, my brother is living his childhood fantasy, when both these makes represented personal achievement. Today, few automobiles shout more loudly and clearly to the rest of the world that the owner knows nothing about automobiles.
As most Caddy and Merc owners have never owned a Lexus, Acura or Infiniti, they don’t realize they are drinking warm coffee and eating day old doughnuts.
October 1st, 2007 at 9:48 am
I do have to agree with the people on here (as someone who got burned by Detroit), that although Detroit may be making some decent cars recently, lest we forget the amount of junk which has come from them. There are so many horror stories out there, that it’s got to be more than a coincidence! You cannot realistically expect to burn millions of people for years with shoddy products, then make a decent car and expect people to buy it. It’s also the reputation we’re buying too.
Detroit has burned many people and saying “we’re good now, why don’t people trust us?” is like Kenneth Lay starting a new company and wondering why no-one wants to invest in him! Buying a car is the best part of £15000 (or $20000 adjusting for US prices). I’m sorry but if I’m lashing out that kind of money I want a guarantee or a history of exemplary service and reliability. SAYING you’re better than before and quoting some awards isn’t enough. You want my business back? EARN IT! Which brings me neatly onto Detroit’s second biggest problem:
Where has their competitive spirit gone…..?
October 1st, 2007 at 9:58 am
You must forgive me, but I believe that the War Against the Transplants is as misguided as was blaming the country’s woes on the Irish/ Italians/ Chinese/ Mexicans / insert other ethnic group here back in the days of yore, when it came down to the fact that not everybody wins in a free market society.
What Detroit forgets is that the customer is always right. That is no cliche — the consumer owes no company anything except for the money that is required when s/he decides to exchange it for a product sold by that business.
If consumers don’t like Detroit vehicles for whatever reason, let them. It is the job of the Detroit automakers to change that fact if they don’t like the resulting decline in sales.
When consumers decided that they didn’t like Citroen, Peugeot and Renault, the French bid a hasty retreat. Ditto for FIAT, that could convince millions of Italians that an unreliable box was worth buying, but not Americans. When Daihatsu couldn’t cut it, sayonara to them — being Japanese didn’t help. When Yugo became a laughing stock that could make a Ford Tempo look good, it went back home with barely a whimper. That’s how it goes.
This is a tough market. If you build crap, they just won’t come. And I’m sorry, but peddling the Vette Z06 as if it is fairly representative of the main is a bit like claiming that the pedigree of a Ferrari should have been reason enough to have bought a FIAT. (That was not a lost opportunity that I regret passing up.)
On the whole, American mainstream vehicles are also-rans in basic segments that American consumers want to buy. As noted above, if buying a compact or midsized car, just for starters, there is not much incentive to buy domestic.
Like it or not, some of the best domestics today are coming out of Marysville Ohio and Georgetown, Kentucky. They are built with international designs, assembled with US labor and US parts, and pay dividends to stockholders around the world. If that’s where the consumer wants to cast his or her ballot, let him. If Detroit wants a bigger piece of that action, they need to stop whining and start making their customers happy. Otherwise, let them follow FIAT and Yugo out the door, and give the winners their rightful due.
October 1st, 2007 at 10:04 am
Great editorial, it exposes the bigotry and unfair bias against the big 2.8, but I argue that they still need to reconsider their offerings. One thing that bothers me with American design these days is how ’safe’ it is. There’s so much beancounting and pouring over the focus groups that even the most basic car configurations are considered risky.
For example, a friend of mine was recently looking for a small wagon. He used to drive Cherokees off road, but grew tired of that -so he wasn’t interested in a crossover or a tall wagon. That’s too bad for the big 2.8, since they’re all caught-up in a overlapping lineup of cute-utes and crossovers these days.
Which American automaker is producing a descent compact wagon? I recommended the Vibe (when was the last time you saw an ad for the Vibe?), but not the Caliber (fisher-price pig-ugly). The new 2008 Focus won’t be available with a hatch, at least not here anyway. At the end of the day, not knowing what their price-range was, my top 3 picks were the Volvo V50, Mazda3 and Suzuki SX4. At least 2 of the 3 are Ford products by extension, but that may change in the near future.
If the Big 2.8 are looking to expand their market share, they have to stop ignoring significant market segments, even if they’re perceived to be low-volume. Come out with a killer product and the market will find you. Offer innovative incentives (like class-leading warranties and guaranteed trade-in values, as other commentators stated) and you’ll move metal.
October 1st, 2007 at 10:05 am
It just takes time for most people. The problem is not only that a lot of the American cars with reliability problems are still on the road. I rarely go a week without hearing someone at work or home complaining about a fuel pump dying on a 2003 Jeep Grand Cherokee with 27k on the clock, or some such nonsense (just the most recent example).
They’ve got to get out of the woods and stay there for a while before you see the popular opinion change. Look at how long it took Hyundai, and the lengths they had to go to (BIG warranty). They succeeded because they were consistent.
With the Big 2.8, I’m just not seeing that. The stats may say otherwise, but to me, a 2003 Jeep Grand Cherokee didn’t roll off the line that long ago, and I would expect more than 27k out of a fuel pump.
October 1st, 2007 at 10:10 am
Don’t mention mustang GT’s. They are fatter & slower and have much higher depreciation & cost basically the same, new
Robstar,
I own a Mustang GT and I wouldn’t suggest one to someone looking for an EVO or an STI. Mustangs are fatter and slower, but a different kind of beast all together.
However $25k for a GT vs $33k for a STI isn’t “basically the same” If you get a loaded GT convertible, then yeah - but now you’re looking at a vehicle that is even further from an STi.
Oh, and the Impreza and the Mustang both get the same 5-star depreciation rating from ALG. I bought mine new because the used prices were so high.
Not to stray too off-topic: I do have a lingering anti-domestic bias. My Civic Si was the best vehicle I ever owned (at least on paper): ridiculously high residual value, good reliability, lots of features, great transmission, etc.
As good as my Civic was, I enjoy my Mustang more. If I stuck to my Japanese-brands-only policy, I would have missed out on a lot of fun.
The 80% statistic cuts both ways. 80% of domestic buyers wont consider imports either. IMO this is mostly just people avoiding complex decisions. If you limit yourself to whatever GM and Ford have to offer in a segment your decision is a lot easier. Same if you only want to look at Honda and Toyota.
October 1st, 2007 at 10:13 am
Recently, friends found themselves in possession of more cars than they needed, so they had to choose which one to sell. They chose to keep a 1992 Honda with 190K miles on it over ‘99 Neon with 90K miles on it.
Their reason, “the Honda felt good to drive but the Neon felt like it was falling apart” and they had been paying repair bills on the Neon but not on the Honda. Their Honda still felt solid and was getting better fuel economy.
When my friends and neighbors stop telling me stories like this (never mind what I read on TTAC or other forums), I’ll be looking at Detroit.
Phil Ressler appears to have the far-too-usual mindset of the Detroit Fan Club… He assumes that import purchasers are making irrational decisions about what to buy based on whether or not a car is foreign or whatever and making decisions that are not justifiable. That’s certainly not the case with me. I’m not biased, as the article suggests, against articles of American manufacture. I work for an American manufacturer and we make really good stuff; we have product performance that is measurably superior in many ways than most, if not all of our competitors and we’re competitive on price. I know of other American manufacturers that are the same way.
I’m biased in favor of what has worked for me and against what hasn’t.
I no longer buy VWs because their vehicle didn’t hold up and, while I still LOVE Volvo 240s and 940s and I felt that I got very good value from them (if I had lots of money, I’d own one just because I like them), I have to admit that my Toyotas hold up better (lower maintenance costs, better long-term durability and the car holds its solid feel longer and better). I don’t plan to buy one as my basic transportation.
Factor all that in and you find that I’m biased against Ford, GM and Chrysler AND ANY OTHERS THAT DO NOT MEASURE UP and it’s their own damned fault. It wasn’t worth it to them to build good, reliable cars that held up well (Volvo was OK - Toyota’s just better) and service them properly when they didn’t hold up and so, they lost customers.
In contrast, Toyota and Honda have worked hard to creast vehicles with lasting value and are now reaping the rewards of retained customers who will pay a little extra for what they see as a really good value.
If you want to effect a total turnaround, I recommend you lobby for changes in tax laws that mean executive stock options are worthless unless the company does well long term (10 years), that short-term profits on stock trades are PUNITIVELY taxed and that long-term holding are dealt with generously. As it stands now, the stock markets are about making money on trades. We have to eliminate that mindset and make the stock markets the places for INVESTMENTS.
That might rid America’s boardrooms of the short-term thinking that got Detroit into this mess before the rest of our industries follow Detroit down the tubes.
October 1st, 2007 at 10:33 am
Thank You.
October 1st, 2007 at 10:37 am
I don’t think we’re looking at an Anti-American bias, but simply that people are looking for value and many American cars do not represent the kind of value they want. The XLR, in Corvette form, is an exceptional value; one trades some interior “luxury” for absolute class-leading performance when you compare to a Cayman or 911 and since the Corvette has not been subject to fire sale rebates, the depreciation is reasonable.
The Fusion is at the other end of the scale and is a high value American car, but is stuck with the general air of rebate malaise which is glued to virtually every regular Ford, Chevy or Dodge. When you oversupply the market, you cheapen your product in the eyes of the public. And while Honda markets the Accord as both a Honda and an Acura, there is significantly more brand differentiation there than between a Fusion and a Milan, or a Chevrolet and Pontiac.
In the end, what shows through for too many American cars is that the design team was under the direction of the accounting department.
October 1st, 2007 at 10:45 am
@ Rollingwreck
4) Guaranteed trade-in price to offset catastrophic depreciation. Can’t do it? I’ll happily go over to the Honda dealer where I know the residuals will be high. Give me the reassurance that even if the car is a POS, it won’t be a financial bloodbath.
This is unnecessary. The market clearing price takes all information available into account, and residual values are available and therefore accounted for in initial sale prices. That is why Dometics and Korean make vehicles generally sell at lower prices than Japonese makes and why American and Korean manufacturers have to pile on the the incentives.
Get residuals up, need for incentive spending declines.
October 1st, 2007 at 10:58 am
For all those that our proclaiming the superiority of non Detroit vehicles and how they will never go back, don’t you realize that THIS IS HOW YOU GOT BURNED THE LAST TIME? I still remember my first ride in a friend’s brand new 1977 Honda Accord. It was a fine automobile for its market and price point, and certainly like nothing else on the market at that time. And, I remember how confused I was…”this..this, is a JAPANESE car, how could it be so good, but, of course, if i bought one i’d have to explain it to my friends and family, how could i possibly face the derision….” And my next car was a 1980 Chevy Citation (as Dr. Phil might say, “how’d that work for ya…)
Lack of consideration of Detroit brands by domesticaraphobes not only hurts the domestic manufacturers (and may take one or more of them out before it’s all said and done) it hurts THEM because they are irrationally limiting your choices. Like they say in the financial world, ” past performance is no guarantee of future returns”. It’s true with cars too. Are Honda, Toyota, Nissan, etc. going to fall off the log. No, of course not, but their global aspirations are stretching them (more recalls, no 6-speed auto in the new Accord, etc.) and the domestics ARE catching up, and in some cases passing them.
All the domestics are asking for is for you to find your way into a showroom, and find out whether they have the vehicle that meets your needs, and get the facts about it vs. the competition. You may be surprised.
I did exactly that with a friend who is in the market for a small hatch/wagon. My recommendation: Volvo S30, at least until the Astra comes out. Can’t wrap my brain around a Caliber, and GM and Ford come up bupkus. If my friend were looking for a full size SUV or CUV, though, I expect the outcome would be different.
October 1st, 2007 at 11:05 am
Sorry, but taking this XLR experience as representative is just silly. Merc vs. Caddy is only about the premium market, and I don’t think anyone can argue that Detroit forfeited that market long ago. Caddy is clawing its way back, slowly, but GM’s even managing to screw that up by pushing out too much product and forcing themselves to discount heavily, just like they always do. As for Ford and Crysler, do they even make premium automobiles anymore? I hadn’t noticed.
Ford, GM and Chrysler are low- to mid-market car manufacturers, and that is where they compete for the forseeable future.
October 1st, 2007 at 11:08 am
quasimondo,
It is precisely because the Big 3 will not consider simple solutions to complex problems that they find themselves in their current situation.
THE CONSUMER DOES NOT CARE ABOUT YOUR COMPLEX PROBLEM.
The consumer has their own complex problems to deal with, and they don’t need more complex problems inherent in buying goods that the market deems sub-par (perception is reality in a market environment, get over it)
October 1st, 2007 at 11:11 am
All the domestics are asking for is for you to find your way into a showroom, and find out whether they have the vehicle that meets your needs, and get the facts about it vs. the competition. You may be surprised.
As Mike Karesh found out on TrueDelta.com, import intenders do more research online before buying. Why bother wasting valuable time going into a showroom when you can start excluding cars over the Internet? Here are links to the crash test results of the pre-CSV GM minivans, I only knew about the latter at the time I was minivan shopping:
EuroNCAP offset crash test of the Opel Sintra, with video:
http://www.euroncap.com/tests/opel_vauxhall_sintra_1999/62.aspx
GM withdrew the Sintra from EU market, whose sales were already flagging, after these results came out. Americans were blessed with the design for another 5 years, only to be replaced by TTAC’s inaugural TWAT.
IIHS offset crash test of the Pontiac Trans Sport:
http://www.iihs.org/ratings/rating.aspx?id=67
October 1st, 2007 at 11:13 am
Domestic turnaround is only one part of the equation…the competition would have to suck - and I don’t know if that’s happening quickly enough.
If all things were equal, and GM made a car like the Lexus model we bought, with a dealership experience like Lexus, resale like Lexus, everything is as good as Lexus, price…EVERYTHING is the same - I still buy the Lexus.
(I picked Lexus and GM as examples, but feel free to replace them with your favorite domestic and import brands.)
GM has f–ked me over (and others, obviously) repeatedly.
So in the scenario above my incentive to purchase the GM over the Lexus is…uh, there is none. Two brands, all things equal, one brand has burned you and everyone you know over and over. What would possess someone to spend money with that company in that scenario?
So domestics can’t be “as good as” the competition. They have to be better. For a while. Maybe a long while. Then and ONLY then would it appear on my serious shopping list. And that’s not a guaranteed sale, but at least I’ll consider it seriously.
October 1st, 2007 at 11:14 am
I understand what the SL guy meant when he said “But nobody would understand if I bought a Cadillac.” The brand is part of the problem. Like I said in some other thread, for everyone I know, domestics == cheap. And there’s no easy fix to the problem.
It’s not just styling, quality or materials. It’s the whole experience. The dealer showroom, the customer support line, heck, even the website. It’s hard to separate the different aspects of brand perception, each element feeds off the other.
What does it mean, when import salesmen walk up with an air of complacent confidence, knowing I’ll buy their cars, when the domestic salesmen are fatalistically cynical, half-expecting me to walk off at any time?
What does it mean, when Ford Edge ads claim to be quieter than Lexus, then I check online and find their claims aren’t on the level?
What does it mean, when the Big 2.8 will, almost at random, decide to give employee discounts to everyone?
This is branding. The Big 2.8 have dug this hole with poor quality, and brand perception starts and ends with quality. But they shouldn’t expect that just because they can build some examples of decent cars, that magically all is forgiven. It’s great that some of their cars are good. “We’re just as good, honest!” is not a reason to switch.
I don’t respect domestics. Stone me - I’m an import bigot. The styling makes me laugh. Having Jill Wagner ambush ads at all hours of the day makes me laugh. If you want respect, act like you deserve it.
If Detroit wants to convert me, they should start with the Corvette. The Corvette Z06 is a great-looking car with good handling. It’s an unbeatable value. The Corvette has an instant credibility that requires no explanation. They stayed true to the original styling, while continually refining it and putting more muscle under the hood. But I live in a metro area, so I won’t be getting one anytime soon. If they could convert some of that magic to a four-door saloon, with the quality to match, I’d buy it. For now, the only domestic I’ll consider is a Mazda 3/6. It’s almost a domestic.
October 1st, 2007 at 11:17 am
This is a great article and the comments afterwards make it even better.
Forget about the XLR V-series, I’m sure the new Malibu will be better than the Camry inside and out. The perception gap will keep consumers away, not to mention that GM’s lineup is not competitive at every price point. Until the incentives roll in. And the cycle of “buy Detroit because they are a great value” comes in.
I try to recommend winners like the Aura, Corvette, Fusion, etc to my friends, but most everyone looks at me like I’m nuts.
And then they’ll tell you a horror story about their parents and their Diesel Oldsmobile, Taurus head gaskets or Chrysler transmission woes: its human nature not to make the same mistake twice, especially when tens of thousands of dollars are on the line.
Detroit can fix it, but it needs time. I hope they can turn it around before the creditors demand blood.
October 1st, 2007 at 11:29 am
Where does this “unfair” meme come from? Am I supposed to play the game “fairly” by only paying attention to the machine and forgetting the infrastructure like dealers and parts availability? That’s just not in the cards. If I have a ration of crap from a dealer I might put it down to perversity, but if five or six dealers (GM) treat me badly I begin looking upward to the mother ship.
Sorry, Detroit, until you match Subaru in every point of the ownership experience, my money goes to them. Not “fair”? Take a do-over when you boned me on my Pontiac 6000’s transmission (failed within warranty but fobbed off until that was done), -then- we’ll talk.
October 1st, 2007 at 11:30 am
Captain Tungsten wrote: “All the domestics are asking for is for you to find your way into a showroom, and find out whether they have the vehicle that meets your needs, and get the facts about it vs. the competition. You may be surprised.”
Surprises are exactly what I got from Ford. I do not want any more surprises. When I go on a driving vacation, I want to return on the day I planned driving the same vehicle that I was driving when the vacation started and without spending any time in dealership waiting rooms along the way.
Bob Lutz (or whomever) can tell me that GM (or FoMoCo or whatever) is just as good as Toyota but I’ll wait for independent verification, thank you.
October 1st, 2007 at 11:40 am
I perused the first few comments to see how others responded to this editorial. At first blush it appears I’m not on the same page although it could be semantics.
At least for me, and I’m quite sure for quite a few people this isn’t just a bias. This is the result of an earned reputation. The General and it’s domestic cohorts foisted automotive crap on the American consumer for years culminating, IMO in the early 80’s. If you were unlucky enough to have a purchased a Caddy or virtually any other domestic brand during these times you probably know what I’m talking about.
The bias you see now is earned. They will need many years of making good product to even come close to recapturing lost market.
I will believe that they are making a comeback when one of them has the gonads to stand up and admit it, apologize for it, and thank Toyota et al for forcing them to be better.
October 1st, 2007 at 11:47 am
I have a suggestion for TTAC.
Get hold of 3 or 5 year-old examples of imports and domestics, and do a comparison.
3 year old Malibu vs. Camry vs. Accord vs. Altima
LeSabre vs. Avalon
Cobalt vs. Civic vs. Corolla
SL vs. XLR
Stand ‘em up and shoot it out. Let’s see how the interiors, exteriors, drivetrains, and accessories have held up in real-time, real world situations. Solicit the input of TTAC’s readers who probably own the cars. Add resale value into the mix to see what the real cost of ownership has been.
My household is Honda-only. We didn’t even consider a domestive when I bought my Acura TL, not when we bought our new Pilot in April. Believe me, we really wanted to look, but there were no comparable domestics.
When we bought the Pilot, we looked at the Acadia, but the price was far higher, and the quality wasn’t there. Everything seemed designed to last until the warranty ran out. My wife wasn’t willing to be the test fleet for GM. She was, however, willing to look at a new Hyundai Vreacruz, even though it’s also a new vehicle.
Think about that for a minute. We had more confidence in a Korean car than an American car. It’s astonishing that it’s come to this, but reality is a tough thing. The greatest manufacturing companies the world has ever known are now viewed as inferior to a Korean company that has about a 3 year history of competitive cars.
This debate goes to the heart of why the domestics are dying. “Perception Gap” is merely the term we use to describe the fact that for many of us, domestics=junk.
I really wish I could buy American. I want to support our domestic industries and the jobs of my fellow Americans. But I’m not going to do it when the product is inferior, or when the resale value is going to cost me thousands of dollars down the road.
October 1st, 2007 at 11:50 am
Phil, are you 213Cobra?
October 1st, 2007 at 11:51 am
It is precisely because the Big 3 will not consider simple solutions to complex problems that they find themselves in their current situation.
THE CONSUMER DOES NOT CARE ABOUT YOUR COMPLEX PROBLEM.
The consumer has their own complex problems to deal with, and they don’t need more complex problems inherent in buying goods that the market deems sub-par (perception is reality in a market environment, get over it)
If all problems could be solved with simple solutions, the world would be a beautiful place. Maybe in the world of sitcoms where everything can be resolved in a 30-minute timeslot can you just wave a magic wand and say, “make it so,” and problems will vanish in a puff of smoke, but when it’s taken them 30 years to dig themselves into this hole, it’ll probably take them 30 years just to get out of it.
October 1st, 2007 at 11:57 am
One other point:
Sajeev said that he expects the new Malibu to be the equal of the Accord/Camry/Altima.
It may be, but when 15 dealers in Atlanta run full-page ads discounting them from Day One, it will only reinforce the “Perception Gap”.
Add to this the fact that thousands of them will be built as strippers for the rental fleets, and you can see where we’re headed.
October 1st, 2007 at 12:10 pm
I am with Ralph SS on this one.
Phil Ressler’s article is well-written but it relies too much on a weak point, namely JP Power. If the author could cite longer-term statistics stating that Detroit iron as well as the whole buying and ownership experience were up to par with Asian cars, then I’d be inclined to support his view.
A brand depends on reputation. Detroit shot its reputation and thus most US car brands are shot. Re-building a reputation takes years of unblemished peformance. This article would be justified in, say, 2010, if by then American car companies had proved they are in it for the long-term.
October 1st, 2007 at 12:14 pm
Sorry, Phil Ressler,
in a consumer business brands are extremely important. The strong brands are now Toyota, Honda and some of the Europeans. Detroit’s brand power outside of Detroit has been burnt. Do you really think a California high tech executive is going to dump his European fashion mobile for something as archaic as a Cadillac? I’m afraid those Cadillacs will stay in the museum.
October 1st, 2007 at 12:17 pm
First, if anyone thinks that the bias is JUST fashion they are missing the point. Second, fashion is part of the game! Chrysler made a nineties comeback because they started making better looking cars like the neon and sebring. Now those cars are considered ugly. Why? Too many of your products fall apart and sure as heck, they will be regarded as ugly and cheap. Perhaps this is why outside of Corvettes and trucks, there are very few persistent styling cues on the domestics.
Lastly, if anyone is worried about keeping domestic manufacturing jobs, they need to get over it.
We already have the transplants as a solution, and in the end, there will be less and less manufacturing jobs anywhere. Robots will get these jobs, so train your kids to do repairs, not assembly (it will be a few more generations before the robots also do repairs).
Making up a rule that says manufacturing jobs are necessary for a good economy is even sillier than having a rule not to buy domestics. The world changes, perception (and economic theory) follows. Detroit should stop the whining and change the products and wait.
October 1st, 2007 at 12:18 pm
“American consumers share an irrational belief that American-made goods are inherently inferior to those produced by Japanese, German and even Korean manufacturers.”
It isn’t irrational if that belief is based on years of personal experience. You seem to be giving the auto makers a pass for all the horrors they have inflicted on their customers over the years. I would never encourage an abused wife to go back to her reformed husband.
Published warranty cost data still shows the US brands putting out far more money for warranty repairs than do Toyota or Honda, so the argument that they have reached mechanical reliability parity is false. Consumer Reports data also refutes the assertion that everything sold today can be expected to have similar reliability. Since the basic premise of this article is doesn’t hold up, the rest falls apart.
Finally, calling people with whom you disagree on their vehicle choices “import bigots” is rude and offensive. It is odd that a website which has rules against using personal and inflammatory terms when referring to the site’s content persists in using such terminology when talking about other people.
October 1st, 2007 at 12:25 pm
I had a couple of good Detroit cars, but most were terrible; poor designs, haphazard assembly, frequent repairs, and ruinous depreciation. Worse, the manufacturers and dealers were ethically challenged. My first Asian car was excellent as have several since. Why would I change back?
I will reconsider when an Asian car disappoints or their manufacturers and dealers adopt Detroit’s scummy, immoral business philosophy. There is evidence this is happening. Owner forums report even lofty Lexus now has quality issues. Research its transmission woes and customer tales of mistreatment.
The market is Japan’s to lose. Detroit should position itself to capitalize on the first Asian stumble by producing good looking, mechanically competent, well assembled cars with good warranties and developing a new image for quality and integrity.
October 1st, 2007 at 12:25 pm
Regarding the “Perception Gap”, it has a way of becoming a self-fulfilling prophecy. For years it existed in motorcycles, only the polarity was reversed: It was Japanese motorcycles that were considered “junk” and “jap scrap” while Harley Davidson was praised as the pinnacle of motorcycling style and desirability.
Here’s how it happened: Generally speaking, Japanese MC companies made a wider variety of motorcycles in different sizes and styles - everything from 50cc mopeds and scooters up to 1,000cc touring bikes. They were generally significanly less expensive than the Harleys of their day. Because they were less expensive, they were purchased by people who had less money to devote to maintenance, indoor storage, etc, while Harleys were almost always purchased by people who had the cash to keep them well stored and well maintained.
On top of this, the Japanese had a tendency to “update” their models every year, making the previous year’s model obsolete (and making it tough to find parts and accessories for the no-longer-in-production models.) All of this caused resale values to plummet, which meant that a person who could barely afford a motorcycle could afford a used Honda or Yamaha, but couldn’t get within a country mile of a used Harley, unless it was, literally, a basket case. So poor bikers (like me) would buy these used, abused, poorly maintained bikes and ride them around until they fell apart. The general appearance of these bikes (compared to the well loved and shiny Harleys) contributed to the “jap scrap” reputation.
To add to this, the Japanese bikes of the 70’s and 80’s often affected an awkward styling that attempted to mimic some features of the Harley Davidson, without changing the basic layout of the bike (which was completely different from the HD design.)
Keep in mind that in terms of design and engineering, the Japanese bikes were equal to, or (in my opinion) clearly superior to HD, but because the HD was desirable and the old Kawasaki was not, resale prices reflected that fact.
Eventually, the Japanese learned that what American riders wanted most was a copy of a Harley, and they started making them in droves. While they still sell for less than the HDs whose designs they ape, I’ve noticed that resale values are no longer the grand-canyon-style cliff that they used to be.
But people will still pay more for a Harley than they will for an equivalent Japanese bike, simply because the HD is perceived to be of higher “value.”
October 1st, 2007 at 12:25 pm
The comments about the nature of a market economy are spot-on. There will, by the nature of the system, be a loser in a market economy. Not to say that we’re looking at a zero-sum game, but in the end, some party will lose enough to preclude their continued existence.
The common refrain from pro-detroiters is that we owe, whether by way of patriotism or xenophobia, the 2.8 consideration of their product. The fact of the matter is that detroit is responsible for its current woes, not the consumer, not the perception gap, and not its competition.
Detroit and its fanboys demand that we ignore the shortcomings of the product and invest (or in light of resale value woes, dump into a hole) thousands of dollars in an uncompetitive product. Those of us who appreciate that this is a competitive system and choose a product on its merits, rather than our assigned guilt/patriotism, are called bigots. If sacrificing my choice to the whims of a moribund, sickeningly entitled detroit HQ and their equally contemptible unions is patriotic, then I’m proud to say that the label doesn’t apply to me.
A very interesting analog would be comparing other products in similar consumer markets. Home electronics will suffice.
Sony produces a DVD player that looks garish, lacks competitive bells and whistles, and constantly melts discs. The product would be laughed off of the shelves, and rightly so. But, if that component was instead a GM DVD player, we owe it, as our patriotic duty, to overlook the product’s shortcomings. And, as mentioned above, any unwillingness to do so is decried as un-American. We are bigots for embracing the economy as it should function. Detroit is responsible for 3 things: manufacturing the product, marketing the product, and selling the product. When they can do those things better than the competition, they will move product out of showrooms. Until then, we’re somehow expected to finance incompetence with our own sacrifices?
I, for one, will not be sacrificing anything at the alter of “buy American.”
October 1st, 2007 at 12:31 pm
starlightmica: sounds like you made a good decision
jet_silver: The only “fairness” you should be worried about is if you’ve given a “fair” shake to all the vehicles that would meet your needs. If you’ve been treated badly by GM (or other) dealers, you did the right thing by walking. But how will you know what the Detroit ownership experience is, to compare to Subaru?
altoids: your 4-door saloon may be out there. How will you know if you won’t look at it?
Kixstart: where are you expecting to get this independent verification? And why would you replace your own judgement with such a thing?
zarba: I thought about it for a minute. Still doesn’t seem rational. And that surprises me less and less these days. As starlightmica says, more and more people do internet research these days, and as Karesh is letting us know, there is a lot of horsepucky out there on the internet as well. Internet research isn’t a complete substitute for taking a look yourself.
October 1st, 2007 at 12:40 pm
Well said. For most people, I think it’s all about risk management. Why should they risk their $30,000 on something that might be just as good, when other companies have proven track records? The 2.8 will have to prove themselves all over again.
I find it offensive that anyone says it’s the consumer’s fault. If someone gets burned over and over again by the same company, then the person would have to be six shades of stupid to trust the company again.
I think the heart of matter is this: the US consumer is a large, diverse group. The 2.8 have been targeting smaller and smaller segments of the market and have been competitive in those areas. But there’s are other demographics that the 2.8 just haven’t been competitive in, and probably never will be. It’s the vast majority of people who want relibable, safe transportation.
They look in horror at the attitudes of some UAW workers and wonder if a disgruntled one is going to assemble their car. They wonder if some beancounter is going to choose a part that only lasts 2 years instead of 20. And they don’t want to step into a GM dealership.
If the 2.8 don’t want to play in this space, then they’ll have to come to grips with the reality that they will be a niche player and not a mainstream one.
October 1st, 2007 at 12:42 pm
PCH101-”What Detroit forgets is that the customer is always right. That is no cliche — the consumer owes no company anything except for the money that is required when s/he decides to exchange it for a product sold by that business.”
Bullseye!
On to the editorial.
The author needs to look at the data on relaibility from top to bottom, not just watch Bob Nutz point out only the high points.
Yes, the domestics have some good scores, they also have some of the worst scores.
The bulk of their product is average.
Their best competitors “average” vehicles are well above the industry average, and very rarely below.
The average consumer is not going to jump from what they see, justifiably, as a “sure thing” for “might get lucky”.
Anyone can cherry pick data and “prove” their point to the ignorant.
A full examination of the data shows Detroit, though improved, is only half way there.
BTW, an old rule of thumb is the 80/20 rule. You can get 80 percent of the top results with 20% of the effort. Detroit, the low hanging fruit is gone, now comes the HARD PART-CONSISTENCY.
It’s win or lose.
Consumers, IMHO, operate on TRUST more than market gurus think. Trust needs to be EARNED and half measures do not override disasters of the past or the excellence (no, not perfection, I didn’t say perfection so cool down) of their competition.
There is a REALITY gap still in place that FUELS the perception gap.
The perception gap WILL NOT disappear until the reality gap does.
Tallyho,
Bunter
October 1st, 2007 at 12:48 pm
Continuing my post above, I actually feel the “perception gap” myself. My only recent direct experience with domestic vehicles was the 1999 Ford Ranger pickup that I bought new in July of that year.
My indirect experience (with rentals, fleet cars, and second-hand experience from friends and relatives) is that the things that generally go bad on domestic cars are not the core powertrain items, but peripheral luxuries like power windows, power seats, and stereo systems, as well as fit-and-finish items like knobs falling off the dashboard or plastic panels detaching from the interior sheetmetal. Because of this I specifically wanted my Ranger to be as simple as possible. I ordered it with the small (FFV) V-6 and a 5-speed manual tranny and 2wd. The only “luxury” I wanted on it was air conditioning.
The only actual problems I had with it were:
1. Rear leaf springs that sagged noticeably under a sub-maximum load (the camper shell I put on the truck.) I would attribute this to either the observation that most people who drive small trucks drive them unladen, so softer springs would give a softer ride for 99% of the drivers. The other possibility is that Ford cheaped out and just used the same leaf springs for the heavier extended cab truck that they used for the lighter regular cab truck.
2. Seat was too soft: I had this re-stuffed twice before I finally gave up. It wasn’t terrible, but it wasn’t the firm comfy seat my previous vehicle (a Mitsubishi Montero) had.
3. A check-engine light came on at about 65k. Fixed under the extended warranty (which in restrospect I should never have wasted my money on.)
That’s it: 4 years and 93,000 miles with no other problems, and it was actually a pretty good “road trip” vehicle. With 2wd and the 5 speed tranny I got as high as 26mpg on a long-distance trip, and averaged 19-20 in the city and 21-24 on the highway.
So, with that experience, why did I choose to go with a Toyota for my new truck? Well, the main reason is because I wanted a 4×4 and the Ranger is simply an inferior 4wd platform. It has less ground clearance, less suspension travel, and less torque than the Toyota. Worst of all, it has the awful “push-button” transfer case, which I hate (my Toyota is a 2004, the last year the Tacoma had an honest-to-god lever-shifted T-case.)
And finally (my main point), Detroit still doesn’t get the MPG game! Detroit has not figured out how to get decent power and decent MPG. They can do one or the other, but the Japanese have been doing both for over 20 years. My Tacoma, with a V-6 and a 5-speed, gets 20 mpg in the city and as high as 24 on the freeway. Go onto any Ranger web site and you’ll see that the 4×4 guys routinely complain about MPG in the 10-12mpg range. Even assuming that most of these guys are leadfoots with oversized tires, that’s abysmal.
I got excited about the HHR (since I love panel trucks) but when I saw one up close I realized it wasn’t a truck at all but simply a dressed-up car platform with no real “truck” capabilities.
I remain open minded, though. If Detroit would make a decent small truck with a powerful and economical engine, I would seriously consider it. As has been said here before, there is a market for a small, economical, reliable truck. Nobody really makes one like that any more and I can’t believe I’m the only person who would be interested.
October 1st, 2007 at 1:47 pm
Captain Tungsten, I will get independent verification of Detroit’s claims from Consumer Reports and from the reports of my friends and, if I can find it, from warranty payout information (but warranty costs can be kept low, in part, by dealers stonewalling customers).
Why would I replace my own judgement with outside information? Frankly, that seems like either a stupid or disingenuous question. I’ll do that bcause I don’t have the money to buy a fleet of cars and do my own MTBF studies and then pick the winner. I’ll do that because I don’t trust Bob Lutz to be looking out for my best inerests. I’d be stupid not to check with other owners, in aggregate, and see what their experiences have been.
October 1st, 2007 at 1:51 pm
Detroit’s problems are proof that there is only one truism in business that is really true. ‘Word of mouth will make or break you.‘
As someone upstream said, even people like myself who were willing (tentatively) to return to the big 2.8 fold are treated with incredulity by other people. I mentioned to my wife that I thought a Ford Five Hundred would a great car for weekend trips and camping trips and she just looked over at me and said ‘Ford? FORD?!!!’. To people who don’t follow the industry, and look at the stats, the Big 2.8 are about as welcome in their garage as a family of rabid raccoons.
October 1st, 2007 at 1:51 pm
Actually, I think American cars are looking really nice. Some of them (but not ALL of them) actually drive very nicely. But the article does not address the ownership issue. Those who, at one time or another, owned American vehicles will tell you stories of bringing in their cars in for routine maintenance and after paying good money for the service receive their cars back in worse condition than when they brought it in. Or bringing their cars in for something that could be done in 5 minutes and having to book a 2 hour appointment only to return and find it not done on time. Or a small part that stops working (like, in my case, the LED display of the odometer) that requires expensive replacement of a whole package of parts (the entire dash gauge module had to be replaced). The American companies need to focus on selling cars to not even the next generation of car buyers, but the generation after that. I was an American car owner because my parent’s experience with American cars was good. Now, even my parent’s won’t touch an American car, nor my children’s generation unless they have absolutely no choice. Ahh, the power of the free market.
October 1st, 2007 at 1:56 pm
Sorry, I already posted, but the more I think about this article the more angry I get. That last paragraph is just downright insulting to this website’s core readership, and the editorial staff ought to be ashamed that it was ever posted.
The entire premise of this article is flawed, as many have pointed out. It presumes, just as the Big 3 do, that consumers don’t know what they’re doing. How absurd! Good foreign brands (take Hyundai for example) paid their dues, worked hard, and spent decades developing their reputations. Especially the premium brands. Our domestic companies have let their premium brands suffer and die from neglect.
Seriously, what domestic car would you recommend for someone looking at a BMW 3 series and Audi A4? The Cadillac CTS? Sure, anything else? Thought not. What if they wanted all wheel drive and a station wagon, and not a bloody SUV? Nothing to offer? Thought not. What about for the person looking at a Merc S class or Audi A8? A Caddy DTS? A Lincoln Town Car? Puh-lease.
I know I’m cherry-picking high-end cars, but that’s the example cited in the article in support of this supposed bigotry, isn’t it? How can you look at a domestic landscape that makes maybe 3 or 4 legitimate high-end cars total, two of which are 2 seaters (Corvette and XLR) and all are offered by GM, and say that BMW, Lexus, Merc and Audi buyers are just biased? Because one guy said so at a gas station? It’s just a silly assertion. It’s worse than silly - it’s lazy.
October 1st, 2007 at 2:03 pm
I’m late to this discussion. GM/Ford are clearly improving, and not just in the marginal, specialized categories. The Outlook is probably the first mass market GM car I have ever seriously considered; the value proposition is massive considering the high quality of the vehicle. But I still share strong reservations based on historcial lack of durability and reliability of G, vehicles.
There is stil too much crap in the system, too many gaps and holes and poorly executed vehicles, for me to get over my well-founded biases. That’s the problem with promising so mucn and failing to deliver for as long as the Big 2.8 have done so — the hole you dig with customers is so big that you are forced to prove more than your worth to get them back.
October 1st, 2007 at 2:10 pm
Interesting how the basic leading argument example of the Cadillac CTS-V vs. Mercedes Benz SL550 still fails to hold up. In every single way that both cars operate, the Mercedes is superior. It has a better ride, better handling, better interior quality (!!!), and superior (non supercharged) power delivery. This article makes some good points, but the reality is that most American products aren’t as innovative or as high in quality as their Japanese counterparts. Who on earth would choose a new Sebring over the new Accord? Think about it.
October 1st, 2007 at 2:11 pm
” OldandSlow :
October 1st, 2007 at 7:39 am
My first issue with Detroit is their preference for pimp rides which show a complete disconnect from how the rest of the developed world produces cars.
Domestic brands tend to hold onto to dated transmissions, engine designs and suspension components until the buffalo bleeds or Lincoln screams.
Third, but not least, the dealer experience at most domestic brands is pure KIA.”
EXACTLY.
October 1st, 2007 at 2:11 pm
RE: Captain Tungsten @ October 1st, 2007 at 12:31 pm
“your 4-door saloon may be out there. How will you know if you won’t look at it?”
Trust me, I’ve looked. What would you recommend? The closest I’ve seen in a Ford Mondeo, which is responsive car with a nice interior. Good pricing. Unfortunately, I just don’t like the front grille. The ovals remind me of the Taurus disaster.
But that’s besides the point. It’s not my job to look. It’s not my job to dig around a GM dealership, trying to find nuggets of gold. It’s not my job to drive a domestic, insisting to my friends “hey, don’t knock on the car, it’s actually good.” It’s not my job to become a 24/7 domestic defender, knocking down critics left and right. I owe them nothing.
My own experience with Honda has been good. The word-of-mouth is good. The press is excellent. Why would I throw that away to “look around”? People (and animals) herd for a good reason. We can make generally good decisions without spending too much time. People are voting with their feet and pocketbooks. Like someone else said, the customer is always right, get used to it.
October 1st, 2007 at 2:21 pm
Those of us that are pro-domestic can talk until we are blue in the face to our anti-domestic friends on this site around why we think TODAYS competitive domestics are worth a look.
Doesn’t matter the facts and data (rational) or appeal to greater US economic security (emotional)arguements; it WILL NOT make a difference to these people!
Prior bad experience, vanity / snob appeal, lack of intellectual curiosty or a combo of all are too cemented at this point to make short / moderate term inroads. Makes for great TTAC conversation (albeit circular)and a useful work distraction but that is about it.
That said—for those of us that are pro-domestic and / or open minded—-we have a wide selection of stylish and high quality domestic vehicles to choose from in most segments—-and it is only going to get better. If the Big 3 retain us with terrific product and fix their cost model—they will be able to stabilize their business and make a go of it.
Maybe 5-10 years down the line when there is enough of a positive “trend” from an anti-domestic perspective…they may give a fair shot to domestic iron.
October 1st, 2007 at 2:33 pm
I suppose I encapsulate the problem, we have 2 American cars, a Ford Escort and a Saturn SL2. The Escort gets the job done, was a decent used buy 10 years ago, and been mostly reliable except. The Saturn on the other hand, sucks, compared to the Ford, and most imports its ergonomics and seats are horrible although it’s still better than an Ion.
The problem is that we want to replace these cars and Detroit has nothing we want to buy. The Ford Focus wagon, that we drove in 2004 is gone from the lineup. There is nothing in the US comparable to a Mazda5 unless Saturn starts selling Vauxhall Zafiras, and as another poster mentioned, no AWD turbo rally replicas. If I needed another truck, or maybe a muscle car, then I would buy Detroit, but outside these niches what is there?
October 1st, 2007 at 2:34 pm
No worries. Smoke, mirrors and false flag waving.
The social contract ended when Americans became hyphenated to extort advantage and the Unions became a joke when they actively advocated illegal immigration to increase revenue at the expense of their own membership.
Products assembled in a environment of total corruption may look good under showroom lights, but the qualities built into them show sooner or later.
October 1st, 2007 at 2:36 pm
Who on earth would choose a new Sebring over the new Accord? Think about it.
Why, being the objective consumer, would you blatantly dismiss the Sebring (can’t be for looks, the Accord is just as ugly)? It’s almost like a collective gag reflex whenever somebody merely mentions GM, Ford, or Chrysler. The chrysler minivans my parents drove never had transmission problems. Same for the Sables and blown head gaskets, both for the 3.0 and 3.8 engines, never happened. In two years, I’ve put 70K on my Explorer without a grumble. And then there’s my brother’s Jetta that has all kinds of problems, including a pothole that broke the engine mounts, and my sister’s Maxima that we were never able to clear the Check Engine light or find out what was causing the random misfire.
You can complain about poor execution in brand management, you can complain about rebates killing resale value, you can complain about too-soft suspensions, but I’ll never buy this idea that they’re unreliable when I feel more confident taking my Explorer on a cross country trip than I do taking my Mitsubishi.
October 1st, 2007 at 2:50 pm
Sajeev,
Having inspected a preproduction Malibu, I can tell you it easily bests the Camry inside and out. Interior fit and finish attain Japanese levels, but with much more character. I did smack my head popping into the rear seat, but was comfy in the extreme once inside.
If driving dynamics are competitive, then GM may do better than incremental market share gains. The new base level Accord is drab by comparison, but features incredible new advances in safety, along with superb engines, and exceptionally well developed rides.
The real problem may surface in two years when a chastened Toyota focuses on the family sedan segment. By flexing its various competencies it should have the ability to sweep aside all contenders at will.
Toyota really does have the competitive power that the big three imagined they wielded in the mid 70’s. I expect they will soon be taking Detroit to school again.
October 1st, 2007 at 2:51 pm
As a consumer, I take real exception to the idea that I have an obligation to give a manufacturer with a checkered reputation a chance. My obligation is to protect my own bottom line, not to become an evangelist for a brand that’s had a slapdash history, but whose PR agency swears that they’re much better now, honest.
I’m reluctant to shop domestic makes. Partly, it came down to no American cars in my price range offering anything like the package of features I wanted, but it’s also attributable to my suspicions about their quality.
I don’t think there’s necessarily a meaningful difference at this point in initial quality. The dilemma when it comes to quality and reliability is not in the first 90 days or even the first 30,000 miles — it’s when you get beyond that. I’m reminded of when I was in college, and discussions between friends who had small American cars (Dodge Shadow, Ford Escort) and those who had your better small Japanese car (Corolla/Civic). The problem the domestic owners faced was that at low mileage, they’d liked their cars, but as they got old, they seemed to disintegrate. On the aging Japanese cars, things inevitably wore out, too, but there was still a basic feeling of engineering solidity — a sense that you had a sound car with parts subject to wear. With the domestics, it felt like they’d been engineered to last for a certain amount of time, then turn back into pumpkins, so to speak. It came down to subtleties of engineering and manufacture, the kind of thing you don’t necessarily notice unless you take something apart yourself.
Whether this remains a valid distinction or not is harder to say, but these impressions die hard. It will take a generation of good, well-built products to overcome.
GM, Ford, and Chrysler — and Jaguar, and Hyundai, and even VW in recent years — have earned their reputation for slapdash assembly and dubious long-term reliability. If they want to change those perceptions, they’ll have to earn that, too.
October 1st, 2007 at 2:52 pm
CaptainTungsten: If you’ve b