Saturday

The World (of Car Sales) is Flat

With sales stagnating and falling, car sales are flat no just in the US, but also all around the world right now. What does that mean for you? We'll talk about that in just a minute...

For the first time, last month more American auto buyers bought a new Toyota than a new Ford, and Toyota didn't hesitate to toot its horn. Of course, that means they are now eyeing their next step up, most likely. How in the world can Detroit stop this trend?

I could be wrong, but maybe the answer is simpler than the experts think.

Build what people emotionally want. Increase quality. Decrease price. Or, better yet, do any combination of the above if you can (the more the better). The result, you'll increase market share too.

For more than half a century, US car makers were practically the only game in town. Even when the imports began arriving en masse, they were viewed as cute but just not a real threat. It took a while for imports to figure out the American car buying public and they made a lot of missteps along the way.

Ugly cars. Like the Subaru 360.

Wimpy engines. Like the 35 hp engine in the Hino Contessa.

And some downright wierd ideas. Like the Suzuki Suzulight with its 2 cylinder engine. That's right. Just two cylinders. Sort of a like a lawn mower with seats, a roof, and windows.

Ugly, wimpy and wierd. At least that's what a lot of US buyers thought. So how did they sell them? Okay, if you don't build what people emotionally want, and the quality is just so-so, then you make them cheap. They did. They sold. They stayed alive in the US market place for the time being, while they tried harder to figure it out. And it worked. It gave them a toe hold while R&D went to work, studying US cars, US buyers, and the US market in general. It took them awhile, but they figured it out.

The imports realized that they could make cars cheaper but that just selling their foreign cars, with their foreign designs and foreign styles, wasn't going to appeal to most of the US marketplace. They had to adapt their cars to US tastes and desires if they were going to survive here. So they went to work.

It took a long time, and admittedly (like any big manufacturer) they made mistakes along the way, but it worked. Now Toyota has topped Ford in sales last month. Ford is still ahead in total sales for the year, so far, but Ford faces a formidable task ahead of it. Toyota won't quit.

Maybe there's something to that "Quality is Job 1" idea that Ford had awhile back. After all, Americans grew up on the idea of being "the best." If Ford (and GM, too, for that matter) will get back to their roots and start building cars again that really are the best, and sell them at a fair price too, people will return to the showroom. But for now, the showrooms are nearly empty. And that's where we started out today.

Getting people back in the new car showroom won't be easy. But getting back to basics can help. Build what people emotionally want. Stop making a car that looks just like every other car out there.

Increase quality. People are tired of paying good money for bad cars --- and they are showing it with their pocketbook. That, I'd bet, is the primary reason Toyota outsold Ford last month. Take a look at our Vehicle Recall List --- Ford recalls are 3 to 1 against Toyota. But it's more than just quantity. Ford recalls vehicles because they catch fire when they just sit in the garage. You rarely see huge Asian-made vehicle recalls and when you do, like the recent Honda one, they might be over things like printing the wrong phone number (to report a safety defect) in their warranty booklet.

And Decrease price. Okay, with tough times in Detroit, this angle is a hard sell. So if you can't drop the price, at least don't increase it. The new model year is about to come out. It'd be nice if Detroit would surprise us and use last year's old prices instead of ratcheting it up another 5% or so again.

Americans will buy American again, and stick with it, when Detroit consistently builds quality into its product, at a fair price, and the cars are emotionally appealing again. Until then, they'll most likely forget about emotion and just buy the best quality for the best price, regardless of whoever is building it. I guess that's what keeps us Lemon Law Lawyers in business so maybe I shouldn't complain.