The "legacy" of entry level [SIZE=-1]
Considering the state of the economic climate (and the peaks and valleys of gas prices), it's possible we'll see a resurgence of buyers interested in entry level cars. The good news: There are many models available that are reliable, get 25+ overall mpg, have good safety records, and cost less than $20,000. The bad news: Except for the Ford Focus, almost none come from the Detroit Three.
With all the automotive-type news that's dominated my in-box over the several months, the reoccurring theme I kept seeing was "legacy costs." To keep this in its proper context, these costs apply to the challenges the Detroit Three are having fulfilling the promises they made to their retired workers' healthcare and pension obligations. I think it?s a fair argument that these cost have hamstrung Detroit by adding extra costs to their cars.
However, for this blog, I'd like to put a different spin on the term. For me, looking back to the early 1970s to today, Detroit has a woeful track record (or "legacy") of building decent entry level cars. And to rebuild the trust these companies so desperately need in 2009 and going forward, you can argue that they have to start at the bottom: that is, make a really great inexpensive car. This is something the Japanese manufacturers have done very well for a long time. Detroit?s "legacy" in this regard, reads like a who's who of automotive infamy. Google "worst cars" and you'll find these models on just about every auto writer's list: Ford Pinto; Chevrolet Chevette and Vega; Dodge Aspen; AMC Gremlin.
Not that there haven't been stinkers from foreign manufacturers (who can forget the Yugo, the first Hyundais, or the Daihatsu Rocky). Even the first few Toyotas, Datsuns and Hondas were a little dodgy. But here is where the comparisons end, because the aforementioned companies kept making even their cheapest cars better. That's the "legacy" that is now paying dividends.
Consumer Reports data has shown for many years that most Japanese manufacturers made even their entry-level products rock-solid reliable. These cars were usually the most affordable in the product line up, and were sold to people just getting out of college or entering the world of full-time work. But once you convince a buyer that even your cheapest car is well made, it doesn?t take much to sell him/her another model.
Consider, even, that Detroit?s "value leaders" (another term used to market entry level cars) from the late-1980s and 90s were pretty weak: Chevrolet Cavalier; Dodge Omni and Neon; Ford Aspire.
I understand that Detroit has always had a price disadvantage in with these cars in that Japan car companies don?t pay for their workers? health care costs. Fair point. Plus, Japan can sell its small cars all around the globe with minor changes. This also helps cut costs.
But I think one way Detroit can win back a new generation of buyers is to make its least expensive models great. Look at the low-cost Honda Fit, Hyundai Elantra, Honda Civic, Mazda3 and Subaru Impreza, for examples. To convince a newly-minted college graduate to hop on the GM bandwagon, the company needs to build something better than the Chevrolet Cobalt or Aveo. Perhaps that?s coming with the new Cruze.* And the cheapest Chrysler product, the Dodge Caliber, needs a total redo--it?s not close to being competitive.
To get a customer for life--a buyer that every business covets--these inexpensive models need to be designed and built to deliver competitive performance, good fuel economy, high levels of standard safety equipment and reliability that convinces the driver to tell his/her neighbor "Got it right out of college and it's never failed me...I'm sold on this brand." If Detroit can do this, it will rebuild its reputation--one customer at a time.
That?s a legacy they can be proud of.
--Mike Quincy
[/SIZE] [SIZE=-1]Subscribe now![/SIZE]
Subscribe to [SIZE=-1]ConsumerReports.org[/SIZE] for expert Ratings, buying advice and reliability on hundreds of products. [SIZE=-1]Update your feed preferences[/SIZE]