Detroit Automakers Try Some New Tricks

[Z-06]

Detroit Automakers Try Some New Tricks

Linkity

The Big Three Improve Cars But Then Find It HardTo Get Buyers to Notice By NEAL E. BOUDETTE

September 14, 2007; Page B1

Just about every month, CNW Market Research meets with a group of would-be car buyers and plays a trick on them.

Sometimes the company, which specializes in auto sales trends, takes a Toyota Camry, removes any identifying logos, and tells them it's a new model from one of the U.S.-based auto makers. Or it takes a domestic car and tells them it's a Toyota or another import make.

Either way, the result is the same. "If they think it's an American car, the perception of the vehicle falls dramatically," said Art Spinella, vice president of the Bandon, Ore.-based firm. "Detroit really gets a bum rap in the U.S."

Those negative impressions are now souring efforts by Ford Motor Co., General Motors Corp. and Chrysler LLC to halt their long slide in U.S. market share. And for these Detroit auto makers, persuading import buyers to even consider a U.S. car is becoming the new battleground.

The issue of public perception is coming into sharper focus now because experts say the Big Three, after years of concentrating on trucks and all but ignoring cars, have markedly improved the quality and look of their sedans and compacts. So in recent months, Detroit auto makers have been increasingly willing to experiment with aggressive marketing tactics to trumpet those changes.

In the most recent example, Ford was behind a ruse involving about 80 people around the country in the past several weeks. In New York, Miami, Los Angeles and Dallas, its advertising agency, JWT, had workers pretend to be from a fake market-research firm, track down owners of cars made by Toyota Motor Corp., Honda Motor Co. and other competitors, and ask them to drive new Ford models for a supposedly impartial weeklong test.

In taped interviews, almost all gushed about the Fords they drove. JWT is using the comments in Ford's new "Swap Your Ride" ad campaign.

At the Dallas test, 20 or so fake market researchers -- actually JWT staffers -- set up operations at a convention center and donned green polo shirts with "In-Home Test Drive Experience" embroidered in gold. Outside a small brick building they set up camera teams to interview drivers returning their Ford test vehicles. Inside, the account team sat in front of four flat-screen monitors, watching live interviews and listening for the choicest comments.

A few came from Derek Campos, a 24-year-old student. The owner of a 2002 Nissan Sentra said he liked the Focus's flashy look, and appreciated the Synch entertainment system that allowed him to use his cell phone and Apple iPod while driving. (Synch uses Microsoft Corp. technology, and is making its debut in the Focus.) Smiling into the camera, he said, "I'm probably going to get a new car soon, and I'll definitely look at the Focus."

Reached yesterday, Mr. Campos was surprised to learn In-Home Test Drive Experience isn't a real company and was linked to Ford. "I had no idea," he said. He added it doesn't change his high opinion of the Focus, but that it would be better for the company to be "more straight-forward."

Big Three executives acknowledge it will take more than clever advertising to win over significant numbers of "import intenders" -- the industry's term for people who buy foreign brands without even looking at Detroit's models. Ford, GM, and Chrysler's combined share of U.S. light vehicle sales so far this year is 51.3%, down from 54.2% at the same point in 2006, and down from 60% just four years ago.

Inferior cars that Detroit churned out in the past are still hurting the industry's image. In addition, Detroit auto makers still tend to push sales using big discounts, a tactic that undermines both brand image and the resale value that customers get when they trade in or sell their old car.

"Building a better car and assuming people will buy it doesn't work," GM Chairman and Chief Executive Officer Rick Wagoner told reporters at this week's Frankfurt Auto Show. GM, he said, "can do a better job" marketing its vehicles.

Many in Detroit are convinced they can convert import buyers if they can just get them into their vehicles for a test drive. For the past couple of years Ford, GM and Chrysler have organized test-drive events around the country, where hundreds are invited take a spin in their vehicles around a parking lot. Those events, however, are expensive and only reach a limited number of consumers. More importantly, they tend to draw people who are already willing to consider domestic vehicles, not the import intenders.

"We're not on a lot of people's collective radar screens for vehicles beyond trucks and SUVs," said Barry Engle, vice president of marketing for the Ford division.

In the auto industry, "consideration" is a term that describes the degree to which car buyers look at a model or brand when they shop. If a car gets little consideration, that means few customers go into dealerships and look into buying the vehicle.

Ford Chief Executive Alan Mulally has expressed frustration with Ford's recent tendency to abandon well-known vehicle names and familiar advertising campaigns -- effectively squandering years of effort to build customer awareness. Mr. Mulally said he's lobbying his subordinates to bring back a classic Ford advertising line that speaks directly to the issue of consideration: "Have you driven a Ford lately?"

While the Big Three still dominate in trucks, import loyalists make up more than half of the people who buy cars -- 54% according to research by J.D. Power & Associates, a market research firm well known for its auto-quality studies. Just under a quarter shop only for domestic cars and 22% consider both imports and domestics, said J.D. Power researcher Chris Denove.

The main reason import intenders stay away from domestic cars, Mr. Denove said, is that "today's consumer doesn't yet believe the Big Three have improved quality to the point where they are on par with the Japanese manufacturers."

That drives Ford, GM and Chrysler executives crazy. Independent quality studies show they've narrowed the gap with Toyota. Just a few weeks ago, J.D. Power's long-term dependability study reported that GM's Buick brand had tied Toyota's Lexus, which had stood alone on top for the past 12 years.

A Toyota spokesman acknowledged the quality of Detroit's vehicles is closer to Toyota's, but added that Toyota continues to improve its quality as well. "Our problems per vehicle is still going down. It's continuous improvement," the spokesman said. "And that's all good for the consumer."

New sedans from Detroit auto makers like the Fusion and GM's Saturn Aura have won rave reviews in the automotive press, often beating out the Honda Accord and Camry in head-to-head comparisons. New Detroit crossover wagons such as the GMC Acadia and Ford Edge have gained traction in a segment previously dominated by Japanese models.

The trouble is, most of these models are bought by people who are already driving domestic vehicles, and only a tiny fraction are sold to people trading in Toyotas and Hondas, according to data from J.D. Power. Of the cars customers traded in for new Chevys this year, 60% were GM vehicles, the firm's trade-in research shows. The figure for Toyota is just 38%.

GM, for its part, has been trying to use the well-received Aura to steal customers from its main foreign rivals. This summer, in a bid to shake up the market, GM put a Camry and an Accord in each of its Saturn dealerships around the country and encouraged car buyers to test-drive the vehicles side-by-side.

The move had little impact on Aura sales, and GM has now ended the effort. It has also scrapped a plan to have Chevy dealers keep Camrys and Accords on hand to compare against the new Malibu sedan that arrives later this year.

At the Frankfurt auto show, GM Vice Chairman Bob Lutz said his company's own focus groups also find consumers instinctively rate GM vehicles below Toyota's or Honda's. But he said GM's scores are getting closer.

Chrysler is also looking for a little more consideration. A few weeks ago, the company began offering a lifetime warranty on its vehicles' engines and transmissions, an industry first. So far it's unclear if it is helping sales, but it may be another tactic that import buyers just ignore.

Stan Breon, a real-estate investor in Lawrenceville, Ga., who has been driving Camrys since 1992, said Chrysler's warranty wouldn't sway him to consider buying one. "Life's too short to keep going back to the dealer, even if it's free," he said.

Write to Neal E. Boudette at [email protected]

[siegen]

Sometimes the company takes a Toyota Camry, removes any identifying logos, and tells them it's a new model from one of the U.S.-based auto makers.

Oh really, this is a Ford? Wait a minute! I recognize that pig nose anywhere! You lie!

[Drew Dowdell]

Inferior cars that Detroit churned out in the past are still hurting the industry's image.

Yet Honda has been forgiven for the:

SLX

Passport

First Gen Odyssey

First gen RL <210 HP in your top luxury car?!>

First gen Legend <OMG! TEH BADeGE EnGINEERING!!!@1!!>

Nissan has been pardoned for the:

G20

QX4

J30

I30 <OMG! TEH BadGE ENGIENNERING!!!!1!>

Axxess

Pulsar

First Gen Quest

Stanza

Toyota has been excused for the:

Echo

Paseo

"Van"

Tercel

T100

ES250 <OMG TEH BaDGE ENGINERRING!11!!!>

First Gen IS300

Hyundai gets a pass for:

Anything it's ever built.

Now I'm not saying that the domestics don't deserve some ridicule for SOME of their past, however, look at this list and keep in mind that Infiniti is barely 15 years old, Lexus is almost 19 and Acura is the oldest at 20.

Cadillac is STILL being raked over the coals for things it did 8 years before Acura even existed!!!

Furthermore, why do the Japanese makes get a pass for badge engineering when the entire foundation of their luxury divisions started on re-badged De Lux versions of their family sedans.

The next person who complains that the Enclave is just a re-badge Outlook I'm going to run over with an ES350.

Edited September 14, 2007 by Oldsmoboi

[regfootball]

the article does a really good job of summing it all up.

And everyone on this board knows it. Problem is, the other 99% of the US does not.

One important item was left out. Part of the reason and a big part of the import bias is the notion of better interiors and more tech advanced powertrains.

that still exists and honestly I argue that interiors, aside from the reliability myth, drives most car purchases to average consumers. "how nice of a cabin cruiser do i get for xxx a month"?

So to me, this perception problem will remain as it is until detroit really takes the gloves off in the press and in the advertising and in the marketing....AND.....dumps big time resources into interiors. and, moves AHEAD of the imports in the perception of how tech their powertrains are.

Americans are dumb and don't always get it right away and a lot of the time simply don't want to change their thinking anyways.

What i would do........anyone who trades an accord or camry in on a new aura or malibu or whetever, 5000 dollar trade bonus. put your money where your mouth is. if you own a camry or accord of any year and any standing, we will give you 100 dollars cash on the spot to TEST DRIVE the malibu. If you buy the malibu and give up your camry or accord, we will give you an additional 5000 dollar rebate.

radical, yes, but THAT WOULD GET PEOPLE IN THE SHOWROOM. then, send the accords and camrys to the crusher.

Get the competition off the road and into the car you are selling.

Edited September 14, 2007 by regfootball

[6speed]

This is what happens when you sell unbelievably terrible products for 30+ years with equally terrible customer service. Many people swore off domestics years ago when their cars spent most of their serviceable life broken down in repair shops. Those who were lucky enough to have a vehicle without problems were guaranteed frustration when it came time to trade it in as it had depreciated so badly they were upside down on their loans. (this is still a gigantic problem)

It should be of no surprise many people won't give domestics a chance, they have been burned badly before and like any bad experience you tend to avoid the behavior once experiencing it. Still don't think so? Explain the domestics hyper growth elsewhere in the developing world. Those people have had no negative experiences with the domestics and therefor have no apprehensions to purchasing one.

[GXT]

What i would do........anyone who trades an accord or camry in on a new aura or malibu or whetever, 5000 dollar trade bonus. put your money where your mouth is. if you own a camry or accord of any year and any standing, we will give you 100 dollars cash on the spot to TEST DRIVE the malibu. If you buy the malibu and give up your camry or accord, we will give you an additional 5000 dollar rebate.

radical, yes, but THAT WOULD GET PEOPLE IN THE SHOWROOM. then, send the accords and camrys to the crusher.

Get the competition off the road and into the car you are selling.

Gotcha. So what you are saying is that I should go buy a Camry or an Accord so that on my next vehicle I might buy a GM and get $5,000 off. The problem is (as GM has found out with their idiotic Aura campaign) is that the Camry and Accord are still better cars than what GM makes.

My wife and I test drove the Malibu. She bought an Accord. 2+ years later she's had a couple of oil changes and good residual value (which is much more than we could say for the olds she bought new back in 2001). Why oh why would we risk going back to giving up our Saturdays to take our car to the GM dealership on the chance that GM cars "are possibly nearly as good"? She's basically stated that she won't even bother test driving anything other than a Honda. I think that is a bit extreme, but based on her (and my) experiences I can't blame her. There is certainly no way she would ever buy a GM again (I had to convince her to drive the Malibu and Cobalt).

This battle was lost many years ago. GM/Ford/Chrylser have to offer SUPERIOR products for YEARS for this to turn around. And they aren't even yet at the stage of matching.

And contrary to what this article says, GM's reliability is still poor enough on many of their most popular models that they are still creating import buyers with each sale. Good for Buick, but they have been reliable for quite some time and make up only a fraction of GM's sales. Any author who states that this somehow translates to other domestic/import cars or even affects a significant portion of domestic sales is clearly wrong.

[balthazar]

>>"This is what happens when you sell unbelievably terrible products for 30+ years with equally terrible customer service. Many people swore off domestics years ago when their cars spent most of their serviceable life broken down in repair shops. "<<

What manufacturer is this referring to?

[AxelTheRed]

>>"This is what happens when you sell unbelievably terrible products for 30+ years with equally terrible customer service. Many people swore off domestics years ago when their cars spent most of their serviceable life broken down in repair shops. "<<

What manufacturer is this referring to?

All of the Detroit Three, most likely.

[CARBIZ]

Gotcha. So what you are saying is that I should go buy a Camry or an Accord so that on my next vehicle I might buy a GM and get $5,000 off. The problem is (as GM has found out with their idiotic Aura campaign) is that the Camry and Accord are still better cars than what GM makes.

My wife and I test drove the Malibu. She bought an Accord. 2+ years later she's had a couple of oil changes and good residual value (which is much more than we could say for the olds she bought new back in 2001). Why oh why would we risk going back to giving up our Saturdays to take our car to the GM dealership on the chance that GM cars "are possibly nearly as good"? She's basically stated that she won't even bother test driving anything other than a Honda. I think that is a bit extreme, but based on her (and my) experiences I can't blame her. There is certainly no way she would ever buy a GM again (I had to convince her to drive the Malibu and Cobalt).

This battle was lost many years ago. GM/Ford/Chrylser have to offer SUPERIOR products for YEARS for this to turn around. And they aren't even yet at the stage of matching.

And contrary to what this article says, GM's reliability is still poor enough on many of their most popular models that they are still creating import buyers with each sale. Good for Buick, but they have been reliable for quite some time and make up only a fraction of GM's sales. Any author who states that this somehow translates to other domestic/import cars or even affects a significant portion of domestic sales is clearly wrong.

BLAH, BLAH, BLAH. So whoopdie doo - a 2005 Accord is better than a 2001 Olds: it should be because it is 4 years newer. Isn't progress neat?

I have had dozens of people who were paying $430 a month to lease a $36k Alero GLS buy out their vehicles because they were such a damned good value. I would not make an argument whether the Alero should have been stickered at $36k (Canadian, BTW) back in '01, but with a $2,000 delivery credit and .9% lease rate, they were about the same payment as a base Accord 4 cylinder at the time. So who would have gotten the better deal? Factor in your 4 trips a year to the Honda dealer (versus 2 for the Olds) and a lot of other stuff and I would bet a paycheck that the Olds had lower COST OF OWNERSHIP than the Accord. But keep drinking that kool aid, sir.

I guess the 30 or so of my customers that I sold new '98 Cavaliers and Malibus to who are still driving their unreliable pieces of junk are crazy then, eh? Before your wife goes blowing your retirement fund on her next purchase, you might want to try the Malibu (07 or upcoming model, doesn't matter) again. If you think spending $5k more up front doesn't somehow factor into how much the car is worth in 4 or 5 years, then I want to talk to your math teachers.

I have to say one thing about your wife's remarks, though: I do notice import apologists blindly sticking to their perceptions, even in the face of growing evidence to the contrary. Don't forget that for a number of years now, even in JD Powers surveys, the quality 'gap' between Honda and GM has been about a half point: that is a half problem per car. And those problems could be anything from people bitching about locations of cupholders to transmission problems (like in the Accord.) Is that half point worth $5 grand?

Edited September 16, 2007 by CARBIZ

[CARBIZ]

the article does a really good job of summing it all up.

And everyone on this board knows it. Problem is, the other 99% of the US does not.

One important item was left out. Part of the reason and a big part of the import bias is the notion of better interiors and more tech advanced powertrains.

that still exists and honestly I argue that interiors, aside from the reliability myth, drives most car purchases to average consumers. "how nice of a cabin cruiser do i get for xxx a month"?

So to me, this perception problem will remain as it is until detroit really takes the gloves off in the press and in the advertising and in the marketing....AND.....dumps big time resources into interiors. and, moves AHEAD of the imports in the perception of how tech their powertrains are.

Americans are dumb and don't always get it right away and a lot of the time simply don't want to change their thinking anyways.

What i would do........anyone who trades an accord or camry in on a new aura or malibu or whetever, 5000 dollar trade bonus. put your money where your mouth is. if you own a camry or accord of any year and any standing, we will give you 100 dollars cash on the spot to TEST DRIVE the malibu. If you buy the malibu and give up your camry or accord, we will give you an additional 5000 dollar rebate.

radical, yes, but THAT WOULD GET PEOPLE IN THE SHOWROOM. then, send the accords and camrys to the crusher.

Get the competition off the road and into the car you are selling.

GM has already tried that up here. For the past 18 months, they have tried 3 launches of a free iPod campaign where coming in to drive a GM vehicle would result in a free iPod being given to the customer. For the most part it just attracted flakes and coupon clippers - mooches who wanted a free iPod. Then they tried giving away a $100 gas card if the person would come in and drive a GM vehicle. Same result.

First of all, giveaways stink of desperation. Secondly, North Americans are dumb and until the 'intelligenstia' gets bored or wakes up to how much they are being ripped of by Japan Inc, the perception will exist that domestic cars are crap and imported ones are good. Lutz & Co. have gotten religion about the 'perception' of quality, as you can see with the upcoming Malibu, the current GMT-900s, etc., so once this wave of vehicles washes through the market the consumers will come around.

It will just take time, is all. Let us get through the UAW blackmail first. Once that is behind us, and GM continues to unveil more products like the Enclave and others that meet the approval of the jaded media, more and more housewives will escort their husbands by the short and curlies to their local GM and Ford dealer to tell them what to buy there.

[enzl]

BLAH, BLAH, BLAH. So whoopdie doo - a 2005 Accord is better than a 2001 Olds: it should be because it is 4 years newer. Isn't progress neat?

I have had dozens of people who were paying $430 a month to lease a $36k Alero GLS buy out their vehicles because they were such a damned good value. I would not make an argument whether the Alero should have been stickered at $36k (Canadian, BTW) back in '01, but with a $2,000 delivery credit and .9% lease rate, they were about the same payment as a base Accord 4 cylinder at the time. So who would have gotten the better deal? Factor in your 4 trips a year to the Honda dealer (versus 2 for the Olds) and a lot of other stuff and I would bet a paycheck that the Olds had lower COST OF OWNERSHIP than the Accord. But keep drinking that kool aid, sir.

I guess the 30 or so of my customers that I sold new '98 Cavaliers and Malibus to who are still driving their unreliable pieces of junk are crazy then, eh? Before your wife goes blowing your retirement fund on her next purchase, you might want to try the Malibu (07 or upcoming model, doesn't matter) again. If you think spending $5k more up front doesn't somehow factor into how much the car is worth in 4 or 5 years, then I want to talk to your math teachers.

I have to say one thing about your wife's remarks, though: I do notice import apologists blindly sticking to their perceptions, even in the face of growing evidence to the contrary. Don't forget that for a number of years now, even in JD Powers surveys, the quality 'gap' between Honda and GM has been about a half point: that is a half problem per car. And those problems could be anything from people bitching about locations of cupholders to transmission problems (like in the Accord.) Is that half point worth $5 grand?

Will you ever be able to get past $?

Who cares, except these people's retirement planners?

And if you really think someone doesn't attach a higher value to an Accord than an Alero, thus justifying the (claimed) additional cost or inconvenience, than you are flat out nuts...

Have you driven these vehicles? An Accord is a great vehicle, the Alero belongs in a grave next to Olds...

And, if the 5k basically comes back to you in resale (as the Alero's value fell in the toilet when GM euthanized Olds), then its a NO brainer, except, apparently, to you.

You also forget that the GM dealership experience is, odds on, less impressive...the Alero would also cost more for gas...and just the psychic satisfaction of not driving an Alero---as millions have apparently been 'hypnotized' by the Accord magic dust and willfully ignored that paragon of autodom, the ALERO.

Please.

Until or unless the perception of all domestic product improves, few of the great masses will 'take a chance' that the vehicle they use for work and transport family is 'just as good as' the foreign nameplates. People are risk averse, as a whole...Why should lunchbox Larry bother with a 'gamble' when the Toyondatsun will do just fine...and if it doesn't, you CAN sell it in a couple of years without having to take a huge $ hit? WHY?--It's the question you can't answer adequately, which is why everything is price and monthly payments---there's no other REAL selling point.

Edited September 16, 2007 by enzl

[CARBIZ]

Will you ever be able to get past $?

Who cares, except these people's retirement planners?

And if you really think someone doesn't attach a higher value to an Accord than an Alero, thus justifying the (claimed) additional cost or inconvenience, than you are flat out nuts...

Have you driven these vehicles? An Accord is a great vehicle, the Alero belongs in a grave next to Olds...

And, if the 5k basically comes back to you in resale (as the Alero's value fell in the toilet when GM euthanized Olds), then its a NO brainer, except, apparently, to you.

You also forget that the GM dealership experience is, odds on, less impressive...the Alero would also cost more for gas...and just the psychic satisfaction of not driving an Alero---as millions have apparently been 'hypnotized' by the Accord magic dust and willfully ignored that paragon of autodom, the ALERO.

Please.

Until or unless the perception of all domestic product improves, few of the great masses will 'take a chance' that the vehicle they use for work and transport family is 'just as good as' the foreign nameplates. People are risk averse, as a whole...Why should lunchbox Larry bother with a 'gamble' when the Toyondatsun will do just fine...and if it doesn't, you CAN sell it in a couple of years without having to take a huge $ hit? WHY?--It's the question you can't answer adequately, which is why everything is price and monthly payments---there's no other REAL selling point.

We agree on many things, you and I, but you love to spin things to the negative all the time. I agree that perception is everything; however, I live in the real world and being as we own two Toyota stores, I get to see the reports that you seem to live and die by, plus I get to work in the field with the customers real attitudes and concerns.

Yes, most people are 'risk' averse and, yes, the Accord is a fine automobile, but so was the Alero. The Alero's biggest failing was its awful fit and finish - I will grant that. I had a GM exec in the show room explaining to me why the Alero's welds and bonds were crap, compared to the upcoming (at that time) Malibu. I think we both agree that GM fell behind with the fit and finish end of things in the late '90s and early '00s, but that did not automatically make their cars CRAP. Not by a long shot. The Alero GL and GLS actually were pretty fun to drive - so much so that our long term new car manager, who had been in the business 25 years would drive nothing but.

I keep turning everything back to value, because it galls me to see people justifying hefty purchases. I mean, if the Alero is so crappy and the Honda so much better, why stop at the Honda? Shouldn't people then just go out and buy a BMW, because certainly by your measurements that is even better, and so what if it is another $5k more than the Accord? Why don't you come up to Toronto some time? We pay 50% more for fuel, double the insurance and have worse traffic than California - all in a city that is supposedly 'world class.' Top all of that off with the fact that the car makers are sucking us dry by gouging us on every vehicle they sell here. (Or would you justify paying $27k for a 4 cylinder Accord, because that is what they sell for up here!)

I do not EVER pretend to tell you how things are in La La Land (aka California), but I do know how things are run up here in this Over-Taxed Land of the Infnitely Conciliatory Canadian. The Honda will cost more in insurance, repairs and maintence. There is NO WAY IN HELL you can justify that.

If you don't believe me, then climb onto DesRosiers website and ask him. He conducted a study a few years back that proved more American cars were still on the road and that they lasted longer, and when asked point blank by Jim Kenzie (who writes for a lot of media up here) why the imports 'apparently' hold their value better when they, in fact, rusted out and fell apart, Dennis DesRosiers was at a loss to explain that.

PERHAPS IN THE DREAMY MOUNTAIN VISTAS OF CALIFORNIA, THE GLORIOUS HONDAS AND TOYOTAS THAT YOU ESPOUSE TO BE THE GREATEST ENGINEERING MARVELS OF ALL TIME LAST 35 YEARS, BUT UP HERE THEY RUST AWAY AND DIE IN 10. I challenge you to find anything with the name Datsun on it in Ontario.

Not everyone makes the six figures you love to brag about, running your multi million dollar company, so wasting the family pension plan (and sending that money to Tokyo, BTW) makes absolutely no sense to me.

But as long as turn coats in the industry talk out of both sides of their mouth, it will just confuse the issue and sheeple will continue to blow their wads on over-priced Jap crap and we can all just mortgage our kids future.

How's that for a Sunday morning rant?

[enzl]

We agree on many things, you and I, but you love to spin things to the negative all the time. I agree that perception is everything; however, I live in the real world and being as we own two Toyota stores, I get to see the reports that you seem to live and die by, plus I get to work in the field with the customers real attitudes and concerns.

Yes, most people are 'risk' averse and, yes, the Accord is a fine automobile, but so was the Alero. The Alero's biggest failing was its awful fit and finish - I will grant that. I had a GM exec in the show room explaining to me why the Alero's welds and bonds were crap, compared to the upcoming (at that time) Malibu. I think we both agree that GM fell behind with the fit and finish end of things in the late '90s and early '00s, but that did not automatically make their cars CRAP. Not by a long shot. The Alero GL and GLS actually were pretty fun to drive - so much so that our long term new car manager, who had been in the business 25 years would drive nothing but.

I keep turning everything back to value, because it galls me to see people justifying hefty purchases. I mean, if the Alero is so crappy and the Honda so much better, why stop at the Honda? Shouldn't people then just go out and buy a BMW, because certainly by your measurements that is even better, and so what if it is another $5k more than the Accord? Why don't you come up to Toronto some time? We pay 50% more for fuel, double the insurance and have worse traffic than California - all in a city that is supposedly 'world class.' Top all of that off with the fact that the car makers are sucking us dry by gouging us on every vehicle they sell here. (Or would you justify paying $27k for a 4 cylinder Accord, because that is what they sell for up here!)

I do not EVER pretend to tell you how things are in La La Land (aka California), but I do know how things are run up here in this Over-Taxed Land of the Infnitely Conciliatory Canadian. The Honda will cost more in insurance, repairs and maintence. There is NO WAY IN HELL you can justify that.

If you don't believe me, then climb onto DesRosiers website and ask him. He conducted a study a few years back that proved more American cars were still on the road and that they lasted longer, and when asked point blank by Jim Kenzie (who writes for a lot of media up here) why the imports 'apparently' hold their value better when they, in fact, rusted out and fell apart, Dennis DesRosiers was at a loss to explain that.

PERHAPS IN THE DREAMY MOUNTAIN VISTAS OF CALIFORNIA, THE GLORIOUS HONDAS AND TOYOTAS THAT YOU ESPOUSE TO BE THE GREATEST ENGINEERING MARVELS OF ALL TIME LAST 35 YEARS, BUT UP HERE THEY RUST AWAY AND DIE IN 10. I challenge you to find anything with the name Datsun on it in Ontario.

Not everyone makes the six figures you love to brag about, running your multi million dollar company, so wasting the family pension plan (and sending that money to Tokyo, BTW) makes absolutely no sense to me.

But as long as turn coats in the industry talk out of both sides of their mouth, it will just confuse the issue and sheeple will continue to blow their wads on over-priced Jap crap and we can all just mortgage our kids future.

How's that for a Sunday morning rant?

I don't live anywere near CA, BTW.

I never claimed to know the Canadian market, at all, so I defer to your knowledge.

I just hate selling on price. In our foreign or domestic showrooms, it is our fondest wish that the customer buys for any other reason...satisfaction scores based on lowest pricing are always the most unpredictable...a guy whose NEEDS are met by the product is almost always happier and MUCH more likely to return for another vehicle one day, or refer a friend.

To be fair, I don't like that GM has become the WalMart of Cars--its painful and shortsighted.

I truly hope the future changes that. I'm just not cetain the will to do that is there at the tubes.

[CARBIZ]

I would never sell on PRICE. As you are probably aware, the biggest whiners about price, the customer whose ONLY consideration is price, is the best customer to walk away from. It is one of those wierd truisms in this business. The customer who haggles and fights over $5, then complains about everything during and after the delivery process: a nightmare from beginning to end. I have learned the hard way to punt those customers quick. MY CSI bonus is worth more to me than the flat commission I may or not get from them!

I will, however, sell on Value every time. By pointing out all the things that GM does right (better warranty, more standard features, better dealer network - which matters a lot in this tundra called Canada!) and gently pointing out some of the competition's recent foibles, all I can do is assist the customer into making an informed decision, based on what is important to them. When someone is paying $300 a month for insurance (not uncommon around here), cost of maintenance and that nasty word 'payment' come into harsh focus.

I agree with your remarks on the Wal-Mart thing. It is, in my estimation, one of the reasons GM is getting squeezed so badly in market share: they have allowed Honda and Toyota to occupy a 'higher' rung on the ladder in many cases, while Korean cars are squeezing from the rear. It would be easy to argue that the only reason Chrysler has survived this past several years of turmoil is because they have, for the most part, allowed some interesting products on the market, which has glossed over more serious problems at that company. Hiding behind Daimler didn't hurt, either. Unfortunately, GM did stumble with more than a few of their products several years ago. It isn't that they produced 'crap,' but that they produced major yawns in the market place.

For us selling Chevy in Canada (where, technically, EVERY make is an import), it is worse because GM's biggest selling 'hits' the GMT-900s, HHR and others are not selling as well here, largely due to our higher gasoline prices and 'sophistication' (to use the word of one former customer as she lept from Olds to BMW) of our market.

I see encouraging signs from Detroit, with its most recent offerings. Yes, there are still cracks in the foundation (UAW talks, too many dealers, etc.), but with each generation of GM vehicle (from the '04 Malibu, to G6 to Aura, for example), we are seeing some signs that Detroit 'gets it' after all. At the other end of things, both Honda and Toyota are getting a little cocky, too. We hear it from customers who complain Honda dealers won't 'deal' to constant Detroit bashing at those dealers.

I do despair at the lack of innovative marketing - at least up here. With this entire iPod/gas card giveaway - well, it was a huge flop. GM will drag out all kinds of BS first year marketing graphs and figures to confuse the dealers, but those who claimed they sold vehicles from that 'giveaway' are either lying or exaggerating. People cannot be 'bribed' into checking out models on the show room floor. GM has to fire their entire marketing team and get back to basics. That, and just keeping the momentum going with the product releases should be enough on their own to stem the market share slide.

As I have said numerous times, I believe that GM will bottom out around 20-22% market share, with Toyota leveling out around 15% or so - and that is nothing to be ashamed of. I certainly feel a lot more comfortable about my future career plans now than I did two years ago when everyone was running around saying "GM is going bankrupt!"

[Intrepidation]

Like I said in the Malibu thread...It's all about perception.

[agman25]

This is reality and nothing good comes out of ignoring reality. To change things GM and the other two have to do something really radical. Get a great technology or feature to market first- let it be a super efficient diesel or HCCI. Make something that the customers can not buy from anybody else. I think the Volt is going to be the car that does that. But all in all I do not think that the Big Three take enough smart risks. Every new generation of the camcord is a refinement of the previous gen. There is noting radically new there, and why should there be, they are selling well. To change things you need something that breaks the mold. Think Citroen DS or maybe the original Taurus. Make something like that and they will come.

Edited September 16, 2007 by agman25

[FUTURE_OF_GM]

Inferior cars that Detroit churned out in the past are still hurting the industry's image.

Yet Honda has been forgiven for the:

SLX

Passport

First Gen Odyssey

First gen RL <210 HP in your top luxury car?!>

First gen Legend <OMG! TEH BADeGE EnGINEERING!!!@1!!>

Nissan has been pardoned for the:

G20

QX4

J30

I30 <OMG! TEH BadGE ENGIENNERING!!!!1!>

Axxess

Pulsar

First Gen Quest

Stanza

Toyota has been excused for the:

Echo

Paseo

"Van"

Tercel

T100

ES250 <OMG TEH BaDGE ENGINERRING!11!!!>

First Gen IS300

Hyundai gets a pass for:

Anything it's ever built.

Now I'm not saying that the domestics don't deserve some ridicule for SOME of their past, however, look at this list and keep in mind that Infiniti is barely 15 years old, Lexus is almost 19 and Acura is the oldest at 20.

Cadillac is STILL being raked over the coals for things it did 8 years before Acura even existed!!!

Furthermore, why do the Japanese makes get a pass for badge engineering when the entire foundation of their luxury divisions started on re-badged De Lux versions of their family sedans.

The next person who complains that the Enclave is just a re-badge Outlook I'm going to run over with an ES350.

That's where the media bias comes in...

The media is always arround to 1) remind the consumer why they should not buy domestic (Even if the reason did originate 2 generations ago) and 2) positively reinforce the choice to buy from JAPAN INC.

This article right here proves how big of a deal media bias is and how uninformed and basically ignorant the consumer is.

The solution isn't black and white either... Detroit needs to be BETTER and MORE COMPETITVE in marketing. They need to EDUCATE the consumer and not us the 'cheap' tactics they've been using for so long (REBATE THIS!!! and "This is a cool car" that) The consumer has to wise up, which I think they are beginning to do (But it will still take a while for there to be major revalations) -AND- Detroit needs to REALLY work on growing new buyers; a.k.a marketing to younger generations, before they've had a chance to really latch on to the bias that is hurled by the media.

[FUTURE_OF_GM]

Gotcha. So what you are saying is that I should go buy a Camry or an Accord so that on my next vehicle I might buy a GM and get $5,000 off. The problem is (as GM has found out with their idiotic Aura campaign) is that the Camry and Accord are still better cars than what GM makes.

How exactly are the Camry and Accord better products than the Aura again?

This battle was lost many years ago. GM/Ford/Chrylser have to offer SUPERIOR products for YEARS for this to turn around. And they aren't even yet at the stage of matching.

The new products are as 'superior' as you can get.

And contrary to what this article says, GM's reliability is still poor enough on many of their most popular models that they are still creating import buyers with each sale. Good for Buick, but they have been reliable for quite some time and make up only a fraction of GM's sales. Any author who states that this somehow translates to other domestic/import cars or even affects a significant portion of domestic sales is clearly wrong.

The surveys (apparently) don't lie, and the surveys have been trending up for Detroit (especially GM) and down for Toyota for years now.

[daves87rs]

We agree on many things, you and I, but you love to spin things to the negative all the time. I agree that perception is everything; however, I live in the real world and being as we own two Toyota stores, I get to see the reports that you seem to live and die by, plus I get to work in the field with the customers real attitudes and concerns.

Yes, most people are 'risk' averse and, yes, the Accord is a fine automobile, but so was the Alero. The Alero's biggest failing was its awful fit and finish - I will grant that. I had a GM exec in the show room explaining to me why the Alero's welds and bonds were crap, compared to the upcoming (at that time) Malibu. I think we both agree that GM fell behind with the fit and finish end of things in the late '90s and early '00s, but that did not automatically make their cars CRAP. Not by a long shot. The Alero GL and GLS actually were pretty fun to drive - so much so that our long term new car manager, who had been in the business 25 years would drive nothing but.

I keep turning everything back to value, because it galls me to see people justifying hefty purchases. I mean, if the Alero is so crappy and the Honda so much better, why stop at the Honda? Shouldn't people then just go out and buy a BMW, because certainly by your measurements that is even better, and so what if it is another $5k more than the Accord? Why don't you come up to Toronto some time? We pay 50% more for fuel, double the insurance and have worse traffic than California - all in a city that is supposedly 'world class.' Top all of that off with the fact that the car makers are sucking us dry by gouging us on every vehicle they sell here. (Or would you justify paying $27k for a 4 cylinder Accord, because that is what they sell for up here!)

I do not EVER pretend to tell you how things are in La La Land (aka California), but I do know how things are run up here in this Over-Taxed Land of the Infnitely Conciliatory Canadian. The Honda will cost more in insurance, repairs and maintence. There is NO WAY IN HELL you can justify that.

If you don't believe me, then climb onto DesRosiers website and ask him. He conducted a study a few years back that proved more American cars were still on the road and that they lasted longer, and when asked point blank by Jim Kenzie (who writes for a lot of media up here) why the imports 'apparently' hold their value better when they, in fact, rusted out and fell apart, Dennis DesRosiers was at a loss to explain that.

PERHAPS IN THE DREAMY MOUNTAIN VISTAS OF CALIFORNIA, THE GLORIOUS HONDAS AND TOYOTAS THAT YOU ESPOUSE TO BE THE GREATEST ENGINEERING MARVELS OF ALL TIME LAST 35 YEARS, BUT UP HERE THEY RUST AWAY AND DIE IN 10. I challenge you to find anything with the name Datsun on it in Ontario.

Not everyone makes the six figures you love to brag about, running your multi million dollar company, so wasting the family pension plan (and sending that money to Tokyo, BTW) makes absolutely no sense to me.

But as long as turn coats in the industry talk out of both sides of their mouth, it will just confuse the issue and sheeple will continue to blow their wads on over-priced Jap crap and we can all just mortgage our kids future.

How's that for a Sunday morning rant?

Well, as I guy who has friends up there (eh), I would really have to agree with that.

It amazes me to see how many Cavaliers (bad-fit-and-finish and all) are not only still running up there-but are still in decent shape....

And when Canada wants you to bend over when it comes to owning a car-you want the best value possible.....

[daves87rs]

I would never sell on PRICE. As you are probably aware, the biggest whiners about price, the customer whose ONLY consideration is price, is the best customer to walk away from. It is one of those wierd truisms in this business. The customer who haggles and fights over $5, then complains about everything during and after the delivery process: a nightmare from beginning to end. I have learned the hard way to punt those customers quick. MY CSI bonus is worth more to me than the flat commission I may or not get from them!

I will, however, sell on Value every time. By pointing out all the things that GM does right (better warranty, more standard features, better dealer network - which matters a lot in this tundra called Canada!) and gently pointing out some of the competition's recent foibles, all I can do is assist the customer into making an informed decision, based on what is important to them. When someone is paying $300 a month for insurance (not uncommon around here), cost of maintenance and that nasty word 'payment' come into harsh focus.

I agree with your remarks on the Wal-Mart thing. It is, in my estimation, one of the reasons GM is getting squeezed so badly in market share: they have allowed Honda and Toyota to occupy a 'higher' rung on the ladder in many cases, while Korean cars are squeezing from the rear. It would be easy to argue that the only reason Chrysler has survived this past several years of turmoil is because they have, for the most part, allowed some interesting products on the market, which has glossed over more serious problems at that company. Hiding behind Daimler didn't hurt, either. Unfortunately, GM did stumble with more than a few of their products several years ago. It isn't that they produced 'crap,' but that they produced major yawns in the market place.

For us selling Chevy in Canada (where, technically, EVERY make is an import), it is worse because GM's biggest selling 'hits' the GMT-900s, HHR and others are not selling as well here, largely due to our higher gasoline prices and 'sophistication' (to use the word of one former customer as she lept from Olds to BMW) of our market.

I see encouraging signs from Detroit, with its most recent offerings. Yes, there are still cracks in the foundation (UAW talks, too many dealers, etc.), but with each generation of GM vehicle (from the '04 Malibu, to G6 to Aura, for example), we are seeing some signs that Detroit 'gets it' after all. At the other end of things, both Honda and Toyota are getting a little cocky, too. We hear it from customers who complain Honda dealers won't 'deal' to constant Detroit bashing at those dealers.

I do despair at the lack of innovative marketing - at least up here. With this entire iPod/gas card giveaway - well, it was a huge flop. GM will drag out all kinds of BS first year marketing graphs and figures to confuse the dealers, but those who claimed they sold vehicles from that 'giveaway' are either lying or exaggerating. People cannot be 'bribed' into checking out models on the show room floor. GM has to fire their entire marketing team and get back to basics. That, and just keeping the momentum going with the product releases should be enough on their own to stem the market share slide.

As I have said numerous times, I believe that GM will bottom out around 20-22% market share, with Toyota leveling out around 15% or so - and that is nothing to be ashamed of. I certainly feel a lot more comfortable about my future career plans now than I did two years ago when everyone was running around saying "GM is going bankrupt!"

Again, agreed.