28 January 2006
We're just not buying
[I]f cars are lasting longer in the market wouldn't it be logical to conclude that this would drive down demand for new cars? And if that's true, couldn't it also be true that this increased durability has played into the woes faced by Ford and General Motors of late?
Foreign auto makers have long outstripped domestic car companies in terms of producing durable automobiles, so I would expect that the increases in longevity detailed [here] have to do, mostly, with an increase in the quality of domestic car craftsmanship. And if product turnover in the domestic auto market has decreased it means that domestic car companies, primarily Ford and General Motors, are selling fewer cars.
Domestic car craftsmanship is better than it used to be. Unfortunately, the Japanese have continued to improve even as Detroit did its darnedest to catch up, with the results you'd expect. (The Europeans, for some reason I'd guess too many gee-whiz electronic gizmos have been slipping of late.)
A bigger factor in the decline of Detroit is its persistent last-generation thinking. I got a look at a shiny new Chevrolet Cobalt the other day. It's very sensible, screwed together well, and possessed of an interior which is obviously inexpensive yet doesn't scream CHEAP! at you from every plastic surface. Definitely a quality piece. On the other hand, so was my daughter's '99 Toyota Corolla, and that was two vehicles ago for her.
Detroit's biggest hits for "hits," read "anything for which they don't have to offer rebates and incentives" are the cars that don't follow someone else's lead, the vehicles that you simply can't get anywhere else. The Chrysler 300, the return of the traditional American big RWD sedan with an extra helping of road sense, has no Japanese equivalent at all, and the closest thing to it, the Mercedes-Benz E-class, will easily cost you ten to twenty-five grand more. (The 300, by no coincidence, got many of its underpinnings from the outgoing E-class.) Ford's Mustang is the last surviving pony car, and the new one evokes more of the spirit of the mid-1960s original than did any of the Mustangs that followed. Chrysler's pocket-sized panel truck, the PT Cruiser, sells as well as ever. The one derivative American car that's a hit is the Pontiac Solstice, the first American roadster that can play on the same field with Mazda's MX-5/Miata; it's sold out for the rest of the year. (A Saturn version, tagged Sky, follows.)
Where Japan (accompanied increasingly by Korea) is eating Detroit's lunch is in the mid-sized sedan segment, where Toyota's Camry and Honda's Accord finish one-two (once in a while two-one) every year. Against this two-headed juggernaut, Ford put up the same Taurus for ten years. Oldsmobile, which used to own this segment (can you say "Cutlass"?), is deader than Francisco Franco.
And with the average new car pushing $28,000, people hate car payments more than ever, especially with 72-month notes. (I hated my 60-month note, and paid it off in 53.) With that kind of money at stake, it's hard to imagine a situation in which buying a new car would be cost-effective compared with fixing up the old one.
Point to ponder: I drive a mid-sized sedan with a Japanese nameplate that was built in Michigan with 60 percent domestic parts by a UAW crew. It is now six years old. The one thing that has failed on it is the knob for the seat-height adjustment on the driver's side: it's cracked and falls off the threaded bolt. And frankly, if you had to sit under me for half an hour a day minimum for the better part of six years, you'd be cracked too.Posted at 5:40 PM to Driver's Seat