Domestic sales and the lost generation

[xcel]

Despite marked improvements in product offerings and quality, many buyers who lost faith in the domestic automakers might be impossible to win back.

Jerry Flint – Forbes – Dec. 11, 2007

2008 Chevrolet Malibu – GM has high hopes but they need to produce a “real world” Green car lineup before they see a major comeback. -- Ed.

What is the biggest problem for the domestic auto industry? It is not union wages or the costs of medical benefits — the new union contract is supposed to trim those costs. Quality is no longer a deal-breaker either. Even Consumer Reports is beginning to say that American cars are good.

So what is it? If you listen to Detroit executives, the problem is that customers are living in the past. They do not know that the home team has corrected its mistakes and now builds some first-rate cars and trucks.
These executives may be correct in thinking the customers are not aware of the progress that Detroit has made. I have a different opinion, however. Today's American consumers just do not care.

People are happy with their BMWs, Hondas, and Toyotas. A few newspaper stories about some Toyota quality problems will not send them running into Chevy or Ford showrooms.

In the 1990s, the domestic industry's edge in sport utility vehicles helped it find buyers who would not consider a domestic make for a passenger car. It was not rare to see a driveway with a BMW, Mercedes or other foreign sedan paired up with a Chevy or Jeep sport utility vehicle. Over the past decade, however, foreign manufacturers made a big push into the light truck business and began pleasing customers in that segment of the market.

In short, the foreigners, especially companies like Honda and Toyota, have an enormous amount of goodwill credit.

General Motors is the best example of a U.S. manufacturer building better vehicles. Its new cars and trucks — some already on the market — have handsome designs, new engines, six-speed transmissions, fine interiors, and good quality… [Read More]

[Right Lane Cruiser]

What these companies need in addition to the build quality is a reputation for durability and standout fuel economy. The first is going to take some time -- possibly longer than they have before dieing out -- and the second is needed to even get attention.

Unfortunately for the underdogs in this business very much indeed rides upon reputation. It is hard enough to establish a reputation to begin with, but to overcome a bad reputation? That is difficult indeed! Everything relating to this perception relies upon time -- something that GM and company have precious little of.

The saving grace for these guys is that they have a solid presence around the globe. Losing the domestic market to the extent they have does not mean they will die out immediately.

[koreberg]

I think the main issue the "domestics" have is that they don't offer more than the competition. The asian brands all had to start out offering more for less. They offerend, more room, more power, more features, more reliability and more mpg. It still took decades of doing that to change peopls mindsets. Still I run into people that will only buy from a "domestic", there choice, but GM isn't trying to step up because they're loyal, they're stepping up because the rest of us jumped ship.

GM is still trying to do just enough to be competitive. If GM wants to win customers back, they're going to have to do what toyota and honda did. More for less. Even with this new exterior package, GM is still behind almost everywhere else, and they're still trying to offer less for more.

[BailOut]

The article brings up a good point in that it will likely take a generation for them to turn this around. People in my generation (Generation X - how I hate that label) learned through trial and error, at great economic expense and despite the advice of our parents, that American cars were 80,000 mile disposable crap that would rattle apart, break big and drop any kind of fluid on a whim.

If I look back at all the vehicles I have owned so far the only ones I remember fondly are Japanese. The only ones that made it farther than 130,000 miles were Japanese. The only ones that ever gave me peace of mind were Japanese.

Conversely, every high maintenance vehicle I've owned was either American or a re-branded American. Every vehicle that left me stranded somewhere was American. Every large repair bill I've ever had to pay was on an American car (e.g. in 2006 my wife's Tacoma blew out the #4 spark plug seat and coil pack for a 1 day solid repair cost of $354 while my old Stratus had a brake system issue that required 2 days and $1,871 to semi-repair using highly disposable parts).

Earned experiences like that can't be easily nor quickly undone.

[Chuck]

Originally Posted by article

...If you listen to Detroit executives, the problem is that customers are living in the past. They do not know that the home team has corrected its mistakes and now builds some first-rate cars and trucks....

Then why is their North American marketing living in the past? Putting out a product before it's reliable and significantly improved like the Saturn VUE hybrid and the Malibu hybrid? Until recent jumps in gas prices have delivered body blows to Detroit and tens of thousands from their payroll, GM has been dismissive about fuel economy, and it goes well beyond vaporware like the EV1.

I can't blame GM for lack of marketing - they do lots of it and well. It's their direction of pretending gas is still $1.50 a gallon that is partially to blame. What is GM's poster child now? For decades it was the Impala. It's not the Malibu either, nor is it the Calivier. GM has a glut of it's cars as billboards and remote control toys for the kids - again it's not the Impala....in case you have been away from Earth the last ten years, the answer is here.

My boss had a Cadilliac five years ago, but got an Infinity after tiring of being known at the GM Service department on a first-name basis. I hope the CTS is waaay better, but if many others were burned the same way, would they try Cadilliac again?

[Robert Lastick]

I have been driving for 50 years and have owned only 4 cars. Two were Mopar's one was a GM product and the 4th, my current car is a 98 Toyota 4 Runner with 156,700 miles on it. It makes me a little queezy in the stomach to think of all the money I spent fixing the first 3 cars I owned. I thought it "normal" to spend a lot of money to keep cars going. My Toy taught me different!. It is the best, most reliable car I have ever owned. Excluding the regular maintenance and replacement items, I have had only one item that I have had to replace since I bought it new in 1998, an oxygen sensor that went bad about 6 months after I bought it.

Many say Toyota "engineers its product to death". My 4 Runner is a testament to that. Similiarly, what I have had to do to keep my 3 previous cars running is a testament to the big 3 philisophy of "less for more". I resent that philisophy that has been their guiding light in building cars for so long, but it is NOT the main reason that they have lost me for good as a customer.

In my opinion the real crime that the big 3 has perpertrated on America is is that, for years they and their partners in crime, the "economic terrorist oil industry", have known that America was going to need energy efficient vehicles and need them bad. Now that we DO need them (real bad) Americans are all driving inefficient gas hogs and the Auto/oil cartel is smiling all the way to the bank. Americans can't pay their bills because of double digit inflation brought about primarially by the oil industry's greed for their windfall profits and the big 3's 35 year sales propoganda campaign (see any car ad) that real men drive muscle cars aggressively. Of course, we (myself included) bought it HOOK, LINE AND SINKER, and look where we are now.

Check the map. I think we just arrived in Recessionville and we are almost out of gas, and there ain't no gas stations in Recessionville, only a fella named Big Paul and his son, Mobil, selling gas for $50.00 a gallon, take it or leave it.

I think the most un-American thing you can do is buy a car from any of the "big" 3. The only thing "big" about them is their big need for money, to the total exclusion of responsibility, at the expense of America. They, in my opinion have sold America out.

[WriConsult]

I've heard great things in the press about the Aura/Malibu twins, but until they prove reliable and solid when they're 5 years old I can't trust them. I've always thought the "Initial Quality Surveys" from JD Power, while of some use, were a stupid indicator of car quality. They doesn't correlate well with reliability down the road. I don't sell my cars after just a year (unless they're total crap, as was the '96 Saturn SW1 I bought new), so why should I take initial quality as an indicator?

A few years ago I drove a Cadillac CTS-V just for kicks. With a 6sp MT and 400hp it could chirp its fat rear tires in third even with the traction control on, and could absolutely smoke them in second. By far the most incredible performing car I've ever driven. It made the WRX (actually, a Saab 9-2X, but the same thing) seem floppy and tepid in comparison. The Caddy, being of Aussie origin, was even free of the usual GM gee-whiz interior design, and it seemed tight and well put together.

But as I was driving it I couldn't help wondering about the squeaks, rattles and minor problems it would develop after a year or two. I couldn't get over the fact that it was a GM product and would probably lose its luster of "quality" quickly.

And that's what the Big 3 have to get past. This sense that their cars will become rattle-traps. They've got to not only build quality cars, but do it consistently over a period of years -- as Honda, Toyota and Subaru have done.

[Corolla07]

After owning my first Japanese car I'll never own another Domestic car ever again. Simple as that. My 07 Corolla CE is the oldest car in its class but it light-years ahead in quality and reliability then any American car I ever own.

I had a Ford Escort after it went 3,000 miles past the warranty fell apart. I would spend my weekends rebuilding the car and still had six more payments left on the car. Once I had paid off the car I manage to drive the car diminutively longer until it literally fell apart and left me stranded along the freeway on a frozen winter night. Then I bought a new Chevy Cavalier which went to sh** after a few years.

Sorry, but never again.

[Daox]

This brings up a conversation that me and my co-worker had a while back. Well, it was actually more of a passing comment made by him. He couldn't understand why I would pay 10k for my 2003 Matrix when just about a month ago he picked up a 2004 Mercury Sable for 7k. In his eyes he got a bigger, faster, more comfortable, and more luxurious car. And, he is right on all those accounts. However, he has had to fix it twice since early summer when it was bought! I simply can't get past it. I never answered his question as I didn't want to bash his car, but I knew the answer. The Matrix has been running flawlessly ever since.