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Do IT this week: Layering
Buyers spurning new GM, Ford models for Japanese brands
By Keith Naughton
Bloomberg News
Published on Sunday, Jun 28, 2009
U.S. automakers spent much of this decade retooling their lineups to offer cars rivaling Toyota's Camry and Honda's Accord. Now comes the challenge of winning over consumers.
While models such as Ford's Mercury Sable got top quality marks last week from researcher J.D. Power & Associates, U.S. buyers aren't embracing the cars on which Detroit is staking its future. Imports held 69 percent of the U.S. car market through May, 4 percentage points more than a year earlier.
Ford, General Motors and Chrysler are suffering from sins of the past, when they lavished development dollars on trucks and sport-utility vehicles and let their sedans languish. Building better cars still hasn't enabled them to overcome Asian automakers' aura of superiority.
''It doesn't take long to lose your reputation for making reliable cars, but it takes 10 to 15 years to get that reputation back,'' said David Champion, auto test chief for Consumer Reports magazine, who dubbed Ford's Fusion ''the best car you don't know about'' in the April issue.
Recovery plans for Ford, Chrysler and Detroit-based GM ride on cars after truck sales in the United States plunged 25 percent in 2008 — more than twice the decline for cars.
Ford's Mercury Sable grabbed first place among large cars, up from second in 2008, J.D. Power said, and GM's Chevrolet Impala was third.
GM's Pontiac G6 and Chevrolet Malibu ranked among the top three among mid-sized cars, while the Cadillac CTS trailed only Toyota's Lexus IS in the entry premium car category.
Cadillac finished third among 37 brands, beating Honda in fifth place and Toyota in seventh. Ford and Chevrolet were eighth and ninth, J.D. Power said.
The trick is convincing U.S. car buyers who see companies such as Toyota and Honda as the quality standard. Detroit can't advertise its way out of the perception that it makes shoddy cars, said David Martin, president of the New York operations of brand consultant Interbrand Corp.
''The Japanese have done well because they deliver the goods first before they start talking about it,'' Martin said. ''Detroit historically has believed they can just talk and they can pull the wool over our eyes. They need some hero products that get you and I talking, and then they can start advertising.''
U.S. automakers are responding by deploying technology and fuel efficiency that they say connote quality.
GM, the biggest U.S. automaker, plans to start selling the Chevrolet Volt plug-in electric car next year. A redesigned Ford Taurus debuting this month has pre-collision sensors that boost braking power to help avoid a crash.
''People have to buy a car and live with it to recognize improvements in reliability and durability,'' said Derrick Kuzak, product development chief for Ford. ''But this is technology with immediate appeal.''
Marketing mileage is making inroads for Ford. The new Fusion had record U.S. sales in April and May. The Fusion's fuel economy is the highest among mid-size sedans, with the hybrid version getting 41 miles per gallon in city driving.
Research shows buyers equate high mileage with high quality, said Jim Farley, group vice president of Ford's marketing.
Fuel economy ''is a proxy for trusting the company,'' said Farley, who was Toyota's U.S. marketing chief until joining Ford in 2007. ''It gives you driveway credibility. You can talk to your neighbor and say, 'This is why I bought a Fusion,' and your neighbor would understand.''
Toyota and Honda built reputations on the quality and fuel efficiency of small cars starting in the 1970s.
Ten years ago, Asian automakers' U.S. market share was 25.8 percent. In 2009, it's 46.8 percent, compared with 44.7 percent for domestic brands, according to Autodata Corp.
U.S. automakers spent much of this decade retooling their lineups to offer cars rivaling Toyota's Camry and Honda's Accord. Now comes the challenge of winning over consumers.
Get the full article here.
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