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Will Detroit 3 be able to buy some time?
If they get the money, it's still going to take time to change – not their product plans so much, since after years of following others, they're finally near the top of their game – but the overall public perception of their vehicles.
General Motors' PR people are out there with a glint in their eye. "The media will always be drawn to the negatives – that's the reality of our `news' world today," wrote Tony LaRocca this week in an email to Canadian GM dealers.
"But we need to keep our chins up and systematically fight back with the facts in a manner that allows us to maintain positive relationships going forward."
LaRocca is the head of GM's product communications department and, true to his word, he calls me every time we publish something in Wheels about his company that is less than complimentary.
But it's one thing to attempt to influence the media and quite another to attempt to influence a public that's once-bitten and now twice-shy – free to buy, or ignore, any vehicle out there.
As far as buyers are concerned, the choice of their next car comes down to three things:
Can I afford it?
Is it what I want and need?
Is the dealer somebody I want to do business with?
Let's look at each of those. The last is actually the most in Detroit's favour. The GM, Ford and Chrysler dealers are desperate for customers and their sales staff will bend over backwards right now to sell you a car. Of course, any decent dealer will work hard to "be your friend," but I hear tales every week of some staff at some of the currently successful brands who have been arrogant to the point of ignoring potential customers – there'll be another in soon enough.
Whether it's what you want and need is a question only you can answer, but there's such a variety of product available now, from all the major manufacturers, that you should be able to find a suitable vehicle on any of their lots.
After all, the Detroit makers are right up there when it comes to alternative technology: GM with its electric and ethanol cars; Ford with its electric and fuel-cell vehicles; Chrysler with its diesels; all three with their hybrids.
So it comes down to money, and that's the sticking point. Right now, "domestic" cars have less resale value than "imports" because the public isn't prepared to pay as much for them.
Take the Pontiac Vibe and Toyota Matrix, for example. Each has a base list price of about $16,000, but the resale value of the Vibe five years from now will probably be two-thirds that of the Matrix. Yet they're essentially the same vehicle, built on the same platform: the Vibe in California and the Matrix (by my neighbour from three doors down) in Cambridge, Ont.
Right now, the Pontiac resells for less because it's considered by the buying public to be inferior to the Toyota, yet it's not inferior – it's every bit the same vehicle. To make up for this shortfall, the GM dealer must offer incentives on its sale price to counteract the money lost come resale time. This means GM will earn less for the same investment as Toyota, all thanks to reputation.
Yes, the Detroit Three earned their reputations the hard way. Even though they really have moved past the bad old days of crappy vehicles, those reputations are still difficult to shake. It'll take time to gain them back, and regain the income they now deserve.
We'll find out soon enough if they'll get that time.
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