Wednesday

Detroit is #2 in US Sales


There is no joy in mudville...

For the first time since US auto production began 102 years ago, more foreign-plated cars and trucks were sold in the US than were cars and trucks built by US companies. How in the world did the Big 3 get in this mess and how are they going to get out of it?

In July 51.9% of the market was controlled by import-badged vehicles while US automakers dropped to 48.1%. A year ago they were holding on with their fingernails with the percentages practically identical but reversed in favor of US makers. Oh, what a difference a year makes. It would be interesting to see what that market share slide looks like on a sliding scale that runs the entire 102 years, but I suspect it wouldn't be encouraging to Detroit. This has been a long time coming and it'll be a long time going.

While overall July sales were down so others could share in the misery, it was Detroit that was hit the hardest. Pundits blamed high fuel prices and consumers strapped for cash because of rising mortgage rates, but the fault probably lays deeper.

Foreclosures are at an all time high practically everywhere, so don't blame it on rising mortgage rates. If anything, it might be predatory lenders that have ripped off millions of homeowners with baloney refinancing deals that forced consumers into poverty or bankruptcy.

High fuel prices are a reality, sure. But if you wipe out regulations that control Big Oil's profit, and let them run as wild as they want, sure, you'll probably end up with high gas prices. You can blame the last decade of Congress for that. Still, high fuel prices aren't the culprit. Problem is, the importers who won out with US consumers knew their market's customers better and took advantage of it. They knew that people wanted reliable transportation (read "cars built right") that the manufacturer would stand behind and people were willing to pay a fair price to get it, even a little more than a fair price.

Still, July's Dog Days of Summer hurt even the imports. When you add Toyota and Honda and Nissan to the Detroit Big 3, only Nissan managed to make a little money in July. So if everyone had a sales downturn, then what's going on?

Maybe it's weariness. The Middle East war drags on with no good answers from anyone, in power or out. Seems like people changed control of Congress but not the administration in control, so nothing at all has really changed yet.

People are not in a good mood and when that happens, things turn sour, not the least of which includes the auto industry's sales figures. Detroit's answer (and now the importer's too) is to throw rebates and other sales incentives at it. Okay, so let me see if I have this right...the economy is bleeding so we'll just get people to buy more stuff?

We don't need more stuff, we need better stuff.

Cars that are built better than the imports are. Warranties that run longer than the imports do. Miles per gallon ratings that outdo the import ratings. More honesty in the sales department wouldn't hurt either.

Build it better and they will come; build more stuff just to be building more stuff, and they won't come at all. You'd think Detroit would have learned that hard lesson long before their market share dipped below 50%.

There is no joy in Mudville. We need not just Casey, but a new ball and bat. Maybe Detroit needs a whole new game.

Burdge Law Office
www.NewCarLemonLaw.com
Helping Consumers, and Consumer Law Attorneys, Since 1978