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Buying an American Car? You've Got to Be Kidding

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July 19 (Bloomberg) -- There's a touch of desperation in General Motors Corp.'s latest marketing tactic, asking each of its Saturn dealers to buy a Toyota Camry and Honda Accord.

No, the idea isn't to keep those cars out of the hands of buyers. It's to let customers do a ``side-by-side-by-side'' comparison with the midsize Saturn Aura sedan, and perhaps prove that a car made by a U.S. automaker measures up to the best of the foreign brands.

It's an extreme measure, but extremes may be necessary in light of the devastating currents tearing at U.S. automakers these days. Many car shoppers have simply written off American brands. They are impervious to advertising, dismissive of new American models, and disdainful of those who buy them.

As recently as six years ago, according to Ford Motor Co., slightly more than 48 percent of car buyers in the U.S. said they would consider only domestic brands such as Ford, Chevrolet and Chrysler. Today that proportion has shrunk to 36 percent.

I offer this anecdote: A few weeks ago I pointed out a new Buick Enclave large sport-utility vehicle to my daughter and son-in-law and asked for an opinion. ``Ecch,'' said my daughter, the self-confessed brand snob, ``I'd never drive a Buick.'' Her husband concurred, though agreeing with me that the Enclave has a nicely styled exterior.

Not for Me

The phenomenon of shoppers that turn their noses up at venerable U.S. automotive brands has been growing for at least two decades, propelled by poor quality, reliability, durability and resale values of many domestic nameplates. Import makes, meanwhile, have made steady improvements.

Dan Bonawitz, vice president of planning and logistics for Honda Motor Co. in the U.S., summed it up at a June preview for the new Honda Accord, scheduled for introduction this fall.

``Very few Accord buyers cross-shop domestic brands,'' he said, though ``they do look at the Toyota Camry and Nissan Altima.'' In other words, shoppers considering the Accord rarely bother with cars built by Dodge, Chevrolet or other homegrown brands that once dominated the U.S. market.

Car brands and nameplates that don't make enough shopping lists can quickly flounder. When that has happened, GM, Ford and Chrysler have tried new names.

Strange Ring

But unfamiliar names can bring new headaches. Ford dropped the well-known Taurus name and introduced a new similarly sized sedan called Five Hundred. The undistinguished Five Hundred flopped in part because few shoppers knew what it was. Ford recently jazzed up the Five Hundred's appearance and changed its name back to Taurus.

Ford and other Detroit automakers inflicted most of these wounds on themselves. They chose in the 1990s to spend an overwhelming majority of their capital, talent and energy designing new and better pickup trucks, large sport-utility vehicles and minivans. These were product categories in which Honda, Toyota, BMW and other overseas rivals offered less competition.

GM, Ford and Chrysler skimped on new car development, figuring they could earn more profit on truck-like models. In the short-term the strategy worked. Highways filled with more pickups and big SUVs, as well as more Honda Civics and Toyota Corollas.

In the end, Detroit's game plan backfired, as higher gasoline prices and changing fashion drove consumers away from larger vehicles.

Top Grade

The new cars from GM, Ford and Chrysler unquestionably are better than ever. Some, like the Ford Fusion, are reasonable alternatives to Camry and other foreign brands. But if consumers withhold what marketers call purchase consideration it doesn't matter: new U.S. models won't make shopping lists.

Starting in January, Ford began advertising results of the ``Fusion Challenge,'' a consumer comparison of its sedan to Camry and Accord, sponsored by Car & Driver and Road & Track magazines. Ford said those who test drove the cars rated Fusion higher in categories such as ``fun to drive,'' performance and styling.

A truism of advertising is that half is wasted, though no one yet has figured out which half. This time Ford's gambit seems to have worked, since Fusion sales are running about 10 percent ahead of last year, albeit with bigger discounts.

Jason Vines, a Chrysler spokesman said Chrysler is using pop-up ads on the Internet to intercept shoppers for Japanese models and make them aware of Chrysler's cars. ``A lot of buyer behavior isn't as linear as it used to be,'' he said.

Better Reviews

Rather than cheaper prices, Detroit needs to figure out how to earn better reviews from rating services. David Champion, director of automobile testing for Consumer Reports, an influential shopping guide, said Detroit's cars can get back in the game. But first, they must surmount doubts about reliability and durability.

``A friend traded her Chevy Venture minivan, which had numerous problems, for a Honda Pilot,'' he said. ``After three years and 126,000 miles the Pilot hasn't needed anything but new brakes and tires.''

When Champion's friend trades her Pilot, she'll likely consider buying another one or maybe a Toyota, he said. Chevrolet, even with its industry-leading 100,000-mile warranty, won't have a chance.

My hunch is that GM, Ford and Chrysler can only win back shoppers as each successive new model proves that it will withstand the normal wear, tear and abuse of ownership as well as the best of the foreign competition. Warranties are fine, though better still when they aren't needed.

(Doron Levin is a Bloomberg News columnist. The opinions expressed are his own.)
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