Fam62c

Auto Industry: In for a Penny, In for a Pound

Repper: Good post, and I don't doubt that US quality has come way up but who's fault is it that people don't know that? My point is that the Japs make the same nameplate year after year and constantly improve it creating not only brand loyalty but MODEL loyalty. Everybody knows what an Accord, Camry, Civic and Corolla are because they have been built for 20-30 years. There are Honda and Toyota buyers who have bought the same model for 25 years because the first one they bought in the early 1980's was light years beyond American small cars of that era. I've owned VW Rabbitt/Golfs for 21 years, I've had five of them. The first two (a 1982 Rabbitt and a '84 GTI) had 120+ thousand miles on them when I bought them and were still running well when I was done with them (the Rabbit got killed in an accident and I gave the GTI to my Niece who drove it all through college and then sold it!). Most 1982 small Big-3 cars never lived to see 100K miles. I liked the model and the brand and stuck with it like many Honda and Toyota customers. American makers simply didn't build good or desireable small cars back then (Lee Iacocca was marketing K-cars against really good, sporty Jap cars) and lost millions of customers.


The US seems to make a new small car model for a few years and then it gets dropped for another new model, also, they cannibilize their own business by making the same cars under different brands. You are correct, their is a prejudice against American small cars and I don't believe the Big-3 are trying hard enough to build new, loyal customers. I can't even think of the name of any American small car models so the Big-3 must be doing something wrong with branding and marketing. I know what an F-150, Ram, Escalade, Expedition, etc. are even though I'm not a truck buyer so why am I not familiar with their cars? The answer is that they promote what they want you to buy not necessarily what you want to buy. I guess I looked at a Pontiac Vibe once and thought is was somewhat comparable to a Golf/GTI but even the Vibe is a joint venture with Toyota. I'm not in the market for a new car but give me the name of an American made compact hatchback comparable to my GTI and I'll go test drive it for the heck of it and see what I think, and I better not see any cheap American fake chrome in the interior :)

I hope that the Volt beats everyone else to the market and I hope the car gets good reviews. I still believe that, as recently as a couple years ago when gas was cheap and the economy was good, the Big-3 really only put minimal effort into small cars. It's been that way forever in Detroit because small cars have small profit margins and Detroit's costs just don't allow for profitable small cars.

Another thing to remember is that most buyers start out with a cheap, small and probably used car when they are young and poor. If they like that car they may stick with that brand for a long time, and conversely, if the car is crappy they may never buy a car from that company again. Remember, a 1982 VW Rabbitt purchased in 1987 with 145,000 miles made me a VW customer for 21 years. I don't think that an equivalent Ford Escort or Chevy Chevette from the same era would have made me a Ford or GM customer. The Japs (and VW) understood this and it allowed them to eventually make larger cars and trucks for these buyers as they got older and eventually introduce Lexus and Acura for the buyers as they got older and had more money. Detroit made a huge mistake by dismissing the lower end of the market, when the Jap cars first came Detroit figured the customers who bought them would "upgrade" to American cars when they had more money and if they didn't have more money Detroit didn't want them as customers. Detroit let the Japs in by ignoring the part of the market they weren't interested in and basically gave away a giant piece of market share, the customer erosion continues to this day. The Japs don't have to rely on "cheap" small cars anymore, they get more money for their cars (new and used) than the Big-3 does. The Big-3 will have to try a lot harder than they have in the past if they want to win customers back; they will need to really make a major marketing push in support of one or two small car models if they want custowers to get interested. It's not the customers fault for not buying American, it's Detroit's fault for not paying attention to small car customers for the last 30 years. Detroit isn't entitled to American customer's hard earned money, they have to earn that business.