car_guy

Ten Cars Detroit Should Copy

Actually CR does look at long term reliability and their statement is about reliability of all systems not just fit and finish. The JD Powers 3 YEAR reliability study which I reference also obviously looks at 'engineering', using your definition. You are mistakenly referencing the JD Powers 90 day quality study, which I agree provides minimal value. GM still beat Lexus for the reliability study.


On Mar 29 06:32 PM TinyTim wrote:

> "small, luxury domestic crossover" like my Pontiac Vibe; may not
> be total luxury & it is based on a Corolla platform
>
> "Consumers Reports states that Ford's quality equals Toyota and Honda
> and that many GM vehicles, but not all, are also world class for
> quality."
> There's a big misunderstanding between quality and engineering.
> Consumers looks at fit and finish and obvious defects for about 2
> weeks. My 88 Civic has 285K miles on it, only cost me $7K new in
> Oct 87 and my teenager is driving the piss out of it. That kind
> of reliability is engineered in. Toyota used to call it life-cycle
> cost before they fell victim to US mktg and started with Tundras,
> etc.
> Even Honda caught the Detroit disease as the new Civics look like
> the original Accords. The Fit is just their recognition that there
> is a place for a cheap, sporty econobox, unlike the Yaris which
> is just a cheap econobox.
> What's always been missing from the Big3 is any appreciation for
> engineered reliability. After all, these guys invented planned obsolescence.

Ten Cars Detroit Should Copy

My favorite example of this was the news of the Tesla sedan announcement at the LA Auto Show. Not only was the company given a free pass on their statement that they will begin to sell these vehicles in 2011 when they don't even have a plant site selected, but the reports I heard and read went out of their way to classify the $350 million dollars from the DOE fund Tesla is requesting as loan. When these same people refer to the US 3 getting money from this same fund it is always termed a bailout. This is in spite of the fact that the $25B fund was established in he first place to offset the $70B+ cost of implementing the new CAFE standards. Point of fact is that Tesla cannot qualify for money under this program as an OEM therefore must be applying as a supplier of battery technology. Really sad the double standard at play.


On Mar 29 11:02 AM User 385103 wrote:

> Interesting how "journalists" gravitate to ANY argument that supports
> their one-sided game of dodge ball. "

Ten Cars Detroit Should Copy

Stop living in the '80s. The latest JD Powers 3 year reliability studies show Buick #1, dethroning Lexus after 14 years; Mercury, Lincoln, and Cadillac beat Honda (Mercury beat Acura also); Ford and Chrysler beat BMW and Mercedes and along with Chevy beat Nissan. Ofcourse everyone, except Suzuki, beat VW.

This isn't only JD Powers, even Consumers Reports states that Ford's quality equals Toyota and Honda and that many GM vehicles, but not all, are also world class for quality.


On Mar 29 02:49 PM ksmithdc wrote:

> Instead of copying ideas from Asian competitors, the big three need
> to innovate and create new markets with a focus on ultra high reliability
> (something which we've NEVER been able to compete toe-to-toe with
> the imports).
>
> Better to be #1 in a niche than to be playing catch-up in already
> existing fields.

Ten Cars Detroit Should Copy

Rick,

I normally like your articles because unlike the vast majority of Seeking Alpha contributors you typically do some homework before commenting on the Auto industry. This article however, is not one of those times. Here is some item by item feedback:

Honda Fit - GM & Ford have these vehicles in Europe and Asia where people actually buy them. Aside from a couple of months last year vehicles this small are very low volume and Americans consistently equate small w/cheap, something I do not personally agree with, therefore the legacy cost penalty the US 3 have been paying really hits home in this segment. However, Ford will be selling the new Fiesta in the US next year (weak US $ is keeping them from importing them this year). The Fiesta came in second, 1 point behind GM's Opel Insignia and 87 points ahead of the VW Golf, for the 2009 Car of the Year award in Europe. The Fit, known as the Jazz in Europe, was a candidate for CoY but did not even make the nomination cut.

Tiguan? Reallly? The US News article you reference in your link rates the interior for the Chevy Equinox higher than the Tiguan, the Escape equal, and the Saturn Vue 0.1 point lower. It also ranks the Ford Escape Hybrid 3rd in the class and the Tiguan 6th. VW is the one trying to catch up in this category, not GM or Ford.

"Quick, name a small, luxury domestic crossover" - Lincoln MKX, Buick Enclave, even the Cadillac SRX falls into this category. This another very weak argument. Just because US News made up a new category and placed a few random vehicle in it, does not make it a valid category. Size is not issue, gas mileage is the issue. None of the vehicles in the "small luxury SUV" category get significantly better mileage, so why sacrifice the size to fit full size adults? The Lincoln is a weak showing, but the Buick is a hit and attracting new customers to the brand. The new SRX is due in May. The key Japanese competition in this category is the Lexus RX 350, not the Infinity.

Hybrid vehicles. You will have to explain why Honda is so far ahead of GM & Ford since Honda had to redesign their systems because they originally targeted performance improvement and not fuel economy. Toyota is the obvious leader in both technology and especially market. Honda is attacking them with the Insight by essentially building a cheaper Prius. It will be interesting to see if this works since people prefer to buy the original rather than the knockoff. The Prius has also attained mythical status with much of the public so directly attacking it is high risk. GM & Ford & Chrysler have already learned this so they are attacking in different markets and with different technology. They attacked the SUV space, where they are strong. They put out less expensive mild hybrids in the car space to test the market for a low cost alternative. This worked well for ABS brakes, but not for hybrids. What they discovered is that hybrids aren't about fuel economy, they are about everyone knowing that you are helping to save the world. To succeed the vehicle has to be something the owner can brag about and use to make a statement. Ford is attacking the Camry with a vehicle that is priced the same and beats the Camry Hybrid mileage by 8 MPG and drives all electric to a higher speed. It not only beats the pants off Toyota's hybrid but their higher all electric top speed means you can drive around town without using the gas engine, something you can brag about. The mid-size sedan market is also much larger than the small car market. If gas hits $4 again people will buy the Fusion because they fit their family in it while saving $. GM and Chrysler plan to move past Toyota with serial hybrids that are electric vehicles w/small gas engines to recharge the batteries and extend range. This will allow people to drive locally w/o using any gas but not have to worry about being stuck if/when the batteries run out. Drive all electric like a Tesla and have the range and convenience of a Prius, in a bigger car with much better mileage. Both GM & Ford's strategy is to simply build a greener vehicle than Toyota. This is a much better strategy than being cheaper since the cost of batteries makes being cheaper difficult and risky while being better enables you to charge a premium. If GM can their batteries to work, and since they are leveraging their EV1 and hydrogen fuel cell research they most likely will, Toyota will be in a very tough spot. They will never be able to reach the performance of a serial hybrid with their parallel model and they will be forced to be the cheaper alternative, someplace they haven't been in a long while.

Audi's don't sell because they are overpriced VW's. They used to be unique but not any more. This is actually a big problem for VW and a really bad example.

Mazda MX5 - The 2 seat convertible market has always been very small and very finite. That is why everyone in the under the under $30K market has pulled out except Mazda (Honda is killing the S2000 which wasn't that old) in the last 10-20 years. This market is only good for aspirational vehicles that bring people into the showroom only to buy a more practical vehicle. This is why Mazda keeps the MX-5, Chevy keeps the Corvette, and why Pontiac & Saturn built their vehicles. Aside from the surge in initial sales this market never sells in sustaining volume for anyone. The vehicles are to impractical and outside of the south and west cannot really be used year round. Ford has the Mustang, also in convertible form and they learned they didn't need a 2 seater after the Thunderbird, which sold well for the segment but did not justify a unique vehicle. Chrysler had the same experience with the Crossfire, which was based on a Mercedes, but recently killed it to cut back on costs. In fact you can still buy a Crossfire if you do some searching.

GTI - While the GTI is a great car, you sell the Cobalt way short. From Car & Driver's test of the '09 GTI vs Cobalt they said "The steering, brakes, transmission, and suspension are all contenders in this class. " and "The Cobalt is fun to drive, but it’s also amazingly well composed, and not just for a Cobalt." and "But considering how much ground Chevy has gained in such a short time with this car, we’re eagerly awaiting the next iteration. " The next iteration will be off of the Cruze platform which is far superior to the existing Cobalt. Their only complaint was the interior and the Cobalt SS came in 3rd behind the 2nd place GTI. Ford will compete here is a performance version of the Fiesta and Chrysler competes here with the Dodge Caliber SRT. The US 3 have been in this space for decades and they increased their efforts in the beginning of the decade when the Japanese lost the interest of the West Coast tuners. The vehicles, like the Caliber, may not always be successful, but the effort and attention is there.

Genesis - Hyundai learned this trick from Chrysler who pulled the same thing off with the 300C. All of a sudden it was cool to drive a Chrysler. The Genesis is a threat to every high end brand, not just Buick and Lincoln. However, offering luxury for less is easy to say and very hard to do because it requires that you get the biggest bang for your buck w/every $ you spend on your interior. You put the majority of your $ on a few key items that you hope will give the customer that luxury impression and hope they don't mind/notice the areas where you spent less $. The 'full price' luxury brands spend their $ on all of the important items to avoid guessing wrong.

Mazda 5 - I guess a small minivan is only a good idea when a Japanese company builds it. Chrysler had a short wheelbase minivan since they invented the vehicle segment in 1984. However with small SUVs and now crossover vehicles/wagons nobody is much interested in a short wheel base minivan and they canceled it 2 years ago. The US 3 make at least a dozen vehicles in this segment including the Taurus X, Ford Edge, Dodge Journey, Saturn Vue, etc. Since the Mazda 5 is hardly a sales leader in this category and since GM and Ford have very similar euro vans in Europe (Ford's is probably built off the Mazda 5) I don't get your point. Mazda is simply trying to grab market by being very different. That is what you do when you are way behind not ahead like Chrysler is in the minivan market and the US 3 are in the SUV market.

Forester - Gee its a crossover/suv with a start price just under $20K. The Jeep Patriot and Compass do this and the Patriot's interior has been vastly upgraded this year to address the only real complaint about the vehicle. You conveniently leave out that the price tops out at $30K which then includes a variety of similar US 3 vehicles, many better than the Forester. Is you point that the US 3 should build a stripper vehicle to try to sucker people into their showrooms? I seem to remember that didn't work out so well.

Overall this article is an example of one of the real problems the US 3, the gap between the public's perception of the issues and the actual reality of the industry and market. The media make the problem worse by continuing to publish misleading and downright incorrect information about the industry. Buick and Jaguar just displaced Lexus as #1 in the JD Powers 3 year durability report for the first time in 14 years and the media either ignored this or downplayed it. The Buick Century & Regal and Mercury Sable beat the Honda Accord and Toyota Camry in the study and yet you still continuously read and hear how the Toyota's and Honda's quality is better. You still hear and read, even in this article, that the US 3 only like to build big vehicles. Gee maybe that's because Americans only pay big $ for big vehicles and the cost to make a big vehicle is not much higher than a smaller one. Apparently the pundits would invest their capital in low margin, low volume vehicles instead of high margin high volume vehicles. I would really like to know why Rick and others apparently believe this makes sense.

It would be great if the media actually worked at educating the public on the reality of the situation rather than continue to feed the mis-perceptions. It won't matter what great product these companies produce if nobody realizes something has changed.