My Dad and I had an interesting discussion about why the American Car Manufacturers (G.M. and Ford) are losing it big time yesterday on the way home for work.
I said there were 4 reasons:
1) They don't make a product that is as reliable as a Toyota.
2) They don't make a car that is even desireable unless they pratically give it away.
3) They have aimed many of their products at the wrong market.
4) They are too reactionary.
My examples to back up these four reasons were as follows:
1) Two neighbors buy a new car on the same day. One has a 2005 Camry, the other a
2005 Taurus. Both owners maintain their cars equally. In the first 3 years of
ownership, the Taurus needs 7 or so warranty repairs. The Toyota might need 1.
Shortly before 100k, the Taurus begins to nickel and dime the owner to death. It
needs a new something every month. The Camry just needs regular maintenance.
2) Again two neighbors buy a new car on the same day. One buys a 2005 Mazda3,
the other buys a 2005 Focus. The Mazda has a stunning, high quality interior. The
Focus does not. The Mazda has a manumatic transmission, the Focus doesn't. The
Mazda has a bigger engine with better acceleration and similar fuel economy. The
Mazda has a better warranty, and the list goes on. Why did the neighbor buy the
Focus? Because there was a $3000 rebate on a $17000 car.
3) Caddy makes cars like the new SRX, STS, CTS. They all look great, if you're 20-30.
The problem is that they cost so much that they should be aimed at the 60-70 year
olds. The problem is that 60-70 year olds don't want a car that looks so new edge
and lacks many traditional Caddy features like a V8.
4) Ford and GM spent a lot of dough to roll out these SUVs. Meanwhile they neglected
their entire car lineups. Then when gas hits $2.00 a gallon, they don't have a car
that is good enough for most people. So, the rush some half-assed, virtually
untested car to market, and it is plagued with problems and isn't up to standards.
It's like Car and Driver once said, "Wow, Ford Finally got it, the 2000 Taurus is finally
as good as a Camry, a 1987 Camry."
Another thing that will hurt the US Auto Industry is that the high profit luxury market will have the bottom fall out in ten or so years. The 70+ year olds whose time to buy cars is fast closing may have the notion that "you haven't arrived if you're not in a Caddy". However, the baby boomers and their children don't. Personally, I think a Lexus says, "I've arrived" better than a Caddy ever could. A Caddy is still a GM car, but with leather and extra sound deadening. It still has crappy build quality and reliability concerns. It has style over substance, and it's gaudy. The Lexus is refined, built on a superior platform, built to percise standards, fitted with some of the world's most reliable componets, and dripping in Luxury. Not only does the Lexus let people know that you've arrived, but it does it without gaudiness, and what it really says is that you had the taste to choose a car with style and substance instead of overpaying for a car thats only merit is a gaudy exterior.