. . . produce automobiles with lower value per dollar than then foreign owned competitors?
A letter writer in today's Wall Street Journal makes the following argument.
It's interesting that most of the comments about GM's travails reflect the same old tired reasons of years ago -- quality, paint, design, etc., for not buying an American vehicle. Those, to my mind, are just excuses for buying foreign cars. I would bet the GM-bashers haven't visited an American-make dealership in years, much less taken a test drive. As a result, they have deprived themselves of an overall better deal, a better price, lower repair costs, good gas mileage and an outstanding car.
If in years past a restaurant served up fare of inconsistent quality you can't blame consumers for abandoning this restaurant and not returning when subsequently promised that the restaurant fixed its problems. After two decades of cars like the Vega, Chevette, Omega, Fiero, Sunbird, Jimmy, S-10 pickup, and on, and on, and on, (and let's not forget Ford's flops such as the Pinto, Bronco and Bronco II, Explorer, Festiva, and on, and on, and on), why trust that the Big Two will produce anthing better today. American automobile consumers perceive that they will obtain more value per dollar by purchasing Honda Odysseys, Toyota Camrys, and BMW Z4 Roadsters than by purchasing Ford Freestars, Chevrolet Impalas, and Pontiac Solstices.
But are consumers' perceptions of the quality and reliability of Fords and GMs shortsighted? In a large consumer survey, Consumer Reports found that for 1998 to 2005 models, of the 31 deemed most reliable 29 were produced by Toyota (22) and Honda (7). Only the Chevrolet Monte Carlo and the 2005 Mercury Mariner were brands produced by domestically owned companies rated most reliable. (The CR survey requires a paid subscription so here's a summary provided by Consumer Affairs.)
Additionally:
Of the 48 cars that are on Consumer Reports list of vehicles predicted to have the worst reliability, 22 carry domestic nameplates, 20 are European, four are from Japan, and two are from South Korea. The Japanese models are all from Nissan and its Infiniti division, specifically, Nissan's Quest, Armada, and Titan, and the Infiniti QX56. The two South Korean models on the list are the Hyundai Tucson and the Kia Sportage.
And what about SUVs and vans, the mainstay of the Big Two?
American SUVs continue to produce mixed results. (MS: Remember, uncertainty kills a business.) While the Mercury Mariner was the best of the domestic group of SUVs, the Ford Explorer, Mercury Mountaineer, and Jeep Grand Cherokee were among the least reliable.
With the exception of the Chevrolet Tahoe and Suburban; the GMC Yukon and Yukon XL; and the Cadillac Escalade, large American SUVs have subpar reliability.
Among minivans, the Chrysler Town & Country and Dodge Grand Caravan dropped to below average in reliability. The Toyota Sienna is the only minivan that rates better than average. GM's minivans-the Buick Terraza, Chevrolet Uplander, Pontiac Montana SV6, and Saturn Relay-joined the Nissan Quest at the bottom of CR's list.
Adding insult to injury, Automotive Lease Guide recently released its rankings of automotive brands with the greatest resale value, and which brands do you think came out on top and which came out on bottom? GMC was the only domestically owned brand ranked as above average in resale value, with Buick, Chevrolet, Chrysler, Dodge, Ford, Mercury and Pontiac ranking below average. Just as in a home, higher resale value increases consumer demand for an automobile.
Yes, Ford and GM, they're that bad!
Addendum: I changed the headline to reflect a more accurate perspective of my argument.