Editors Note: After a long history of making crappy unsafe cars that got horrible gas mileage,US car manufacturers are now claiming that they actually want to make cars that people want to buy. However, their words are just more of the same arrogant crap that they have always spewed. They still don’t get it. Perhaps they should just go out of business and make room for new car manufacturers that aren’t as stupid and evil.
U.S. automakers spent much of this decade retooling their lineups to offer cars rivaling Toyota Motor Corp.’s Camry and Honda Motor Co.’s Accord. Now comes the challenge of winning over consumers.
While models such as Ford Motor Co.’s Mercury Sable got top quality marks today from researcher J.D. Power & Associates, U.S. buyers aren’t embracing the cars on which Detroit is staking its future. Imports held 69 percent of the U.S. car market through May, 4 points more than a year earlier.
Ford, General Motors Corp. and Chrysler Group LLC are suffering from their sins of the past, when they lavished development dollars on trucks and sport-utility vehicles and let their sedans languish. Building better cars still hasn’t enabled them to overcome Asian automakers’ aura of superiority.
“It doesn’t take long to lose your reputation for making reliable cars, but it takes 10 to 15 years to get that reputation back,” said David Champion, auto test chief for Consumer Reports magazine, who dubbed Ford’s Fusion “the best car you don’t know about” in the April issue.
Recovery plans at Ford, Chrysler and Detroit-based GM ride on cars. Truck sales plunged 25 percent in 2008, more than twice the decline for cars, to help drag the U.S. automakers to $62.4 billion in losses.
Bolstering the automakers’ efforts are car-quality gains as assessed by companies such as Westlake Village, California-based J.D. Power.
The Mercury Sable grabbed first place among large cars, up from second in 2008, J.D. Power said, and GM’s Chevrolet Impala was third. GM’s Pontiac G6 and Chevrolet Malibu ranked among the top three among mid-sized cars, while the Cadillac CTS trailed only the Lexus IS in the entry premium car category.
Cadillac finished third among 37 brands, beating Honda in fifth place and Toyota in seventh. Ford and Chevrolet were eighth and ninth, J.D. Power said.
The trick is convincing U.S. car buyers who see companies such as Toyota City, Japan-based Toyota and Honda as the quality standard. Detroit can’t advertise its way out of the perception that it makes shoddy cars, said David Martin, president of the New York operations of brand consultant Interbrand Corp.
“The Japanese have done well because they deliver the goods first before they start talking about it,” Martin said. “Detroit historically has believed they can just talk and they can pull the wool over our eyes. They need some hero products that get you and I talking, and then they can start advertising.”
U.S. automakers are responding by deploying technology and fuel efficiency that they say connote quality.
GM, the biggest U.S. automaker, plans to start selling the Chevrolet Volt plug-in electric car next year. A redesigned Ford Taurus debuting this month has pre-collision sensors that boost braking power to help avoid a crash.
“People have to buy a car and live with it to recognize improvements in reliability and durability,” said Derrick Kuzak, product development chief for Dearborn, Michigan-based Ford. “But this is technology with immediate appeal.”
Marketing mileage is making inroads for Ford. The new Fusion had record U.S. sales in April and May. The Fusion’s fuel economy is the highest among mid-size sedans, with the hybrid version getting 41 miles per gallon in city driving.
Research shows buyers equate high mileage with high quality, Jim Farley, group vice president of marketing, said in an interview.
Fuel economy “is a proxy for trusting the company,” said Farley, Toyota’s U.S. marketing chief until joining Ford in 2007. “It gives you driveway credibility. You can talk to your neighbor and say, ‘This is why I bought a Fusion,’ and your neighbor would understand.”
Toyota and Tokyo-based Honda built their reputations on the quality and fuel efficiency of small cars starting in the 1970s.
Ten years ago, Asian automakers’ U.S. market share was 25.8 percent. In 2009, it’s 46.8 percent, compared with 44.7 percent for domestic brands, according to researcher Autodata Corp. of Woodcliff Lake, New Jersey. Weaning themselves from the trucks that provided profits in the 1990s, the U.S. automakers are gearing up to add cars.
GM will reopen a U.S. factory being shut in bankruptcy so it can make subcompacts, while Chrysler left Chapter 11 allied with Fiat SpA to get small-car technology.
Ford, alone in shunning a U.S. bailout, is converting four truck plants to make cars as it prepares to unveil two new small cars in 2010. The shares fell 32 cents, or 5.6 percent, to $5.40 at 1:32 p.m. in New York Stock Exchange composite trading.
“The next 12 months are critical,” Ford’s Farley said. “There are a group of customers in the U.S. who have goodwill for the company, but who are still wondering about the trust factor.”
Chrysler faces the biggest hurdle in luring buyers because it has the lowest quality rankings among U.S. automakers, said John Wolkonowicz, an auto analyst with IHS Global Insight in Lexington, Massachusetts.
Chrysler, the U.S. automaker most dependent on trucks, is counting on Fiat to jump-start work on new models stalled as the Auburn Hills, Michigan-based company slid toward bankruptcy. Technology from Turin, Italy-based Fiat will be the foundation for six Chrysler models, IHS Global Insight said on June 11.
Limits of Quality
Sales suggest that GM and Ford’s quality gains aren’t enough to overtake Toyota and Honda.
The Fusion and Malibu still were outsold by the Camry and Accord by almost 2-to-1 through May. Setbacks for Toyota such as having the V-6 Camry judged “below average” for reliability by Consumer Reports in 2007 proved short-lived. The model was rated “average” last year.
“It is very hard to open minds and get people to consider a domestic vehicle again, no matter how good,” GM Vice Chairman Bob Lutz said. “The product and fuel economy deficit, reliability deficit, styling deficit — all those deficits have been erased. What has yet to be erased and is going to be the biggest challenge of all is erasing the reputational deficit.”
San Diego biochemist Keith Beatty said the Plymouths and Oldsmobiles he owned growing up needed frequent repairs and wore out prematurely. Beatty, a self-described baby boomer who declined to give his age, said he began buying Hondas and Toyotas more than three decades ago and never turned back.
“I’m driving a 23-year-old, 33-mpg Toyota that runs better than any new 25-mpg Detroit iron,” Beatty said in an e-mail. “I would never in my lifetime own another Detroit automobile.”
GM stopped making Oldsmobiles in 2004, three years after Chrysler killed the Plymouth brand.
Toyota and Honda retain a number of advantages. After three years of ownership, a new Accord should keep 53 percent of its retail value and Camry should have 47 percent, more than Malibu’s 45 percent and Fusion’s 44 percent, according to Automotive Lease Guide, the industry standard for used-car prices.
Shoppers’ quality impressions also show GM and Ford coming up short compared with the findings in the J.D. Power study, based on a 2009 survey for Santa Barbara, California-based ALG.
“There’s a big lag between the actual improvement in how their cars are screwed together to what consumers perceive as their quality,” ALG General Manager James Clark said. “It’s frustrating for them. They wonder, ‘Why don’t people get it?’”
‘Build Better Cars’
At Galpin Motors in Los Angeles, Ford’s biggest-selling retailer, Vice President Beau Boeckmann said Detroit automakers can’t be content with just matching Japanese brands.
“Ford has to build better cars than Toyota,” he said. “Why would someone come into my showroom if they’re perfectly happy with their car? Therein lays the big challenge.”
Compelling designs are crucial, according to GM’s Lutz, who noted that members of President Barack Obama’s car task force lingered over a Cadillac coupe with a 560-horsepower engine on a recent visit to GM’s design studios.
“It doesn’t get very good gas mileage, but it got a good deal of attention from the automotive task force,” Lutz said in a May 28 speech in Detroit. “It doesn’t matter where you work or what you do, normal people get turned on by great cars.”
Russ Meyer, chief strategy officer for brand consultant Landor, endorsed that approach.
“Hammering on about quality is less important than getting people to feel like it’s cool to own an American car,” said Meyer, who is based in San Francisco. “They’ve got to ramp up their styling. Now is the time to swing for the fences.” Bloomberg