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Come Home – The Right Time for American Carmakers?

February 6, 2010 View Comments by madia

americancars

With everything going on with Toyota, I’m wondering will this help American car makers win some market share back from foreign carmakers.  It does get a little grey since foreign cars are manufactured in the U.S.  I’m not speaking from a protectionist stand point.  I just wonder if American car makers are not capitalizing on the opportunities presented them.

Before, American car makers didn’t seem ‘incentivised’ to improve the quality of their product.  It was common knowledge that other cars had higher resale value, less mechanical issues, and overall longer running time.  In the past 3-5 years though it seems that those same car makers have to innovate or risk becoming non-existent brands in the future.

From a strategy perspective I would see an advantage in American car makers doing something to capitalize on the opportunity. Thoughts?

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  • Lawrence Tu

    What Toyota's problems have done for American car makers is entice car shoppers to revisit their opinions of American automobiles. Since there are still plenty of options in the likes of Honda, Nissan, and VW, etc, the market is far from a gimme for American car makers. Ford and GM are best positioned to capitalize from Toyota's malaise because they have been revamping their product line with cars that look better, drive better, and will probably last longer than anything they have built in a long time. While they still have a ways to go to, now presents the perfect opportunity to prove to the market that they can do better than ugly cars with cheap interiors and shoddy reliability. It would be foolish to let the opportunity pass by.

  • madia

    Interesting point Lawrence. All the messaging I'm seeing is that Ford and GM haven't capitalized on the opportunity. They haven't done anything that seems different. I checked out their YouTube pages and they have some interesting messaging but nothing that seems very competitive.

    Buick had a billboard in 2009 for the LaCrosse that said “Something else for Lexus to relentlessly pursue.” Now that was head to head.

    What things seem to me is grey though. I went to Ford's site and they were selling Volvos. The Toyotas recalled were actually built here in the U.S.

    So my new question is… is there really still a such thing as an American car company? Do American carmakers have a more significant contribution to the U.S. than their counterparts that are not headquartered here, but build their vehicles here? They create jobs just like American carmakers.

    hmm…

  • Lawrence Tu

    American carmakers have been taking advantage of the opportunity albeit in a somewhat stealthy manner. Both Ford and GM have offered additional incentives for customers to trade in their Toyotas to get them into showrooms but you're right I have not really seen ads that communicate this message. Rather, I have heard it through every news source and seen a one off dealer ad that said “Our Pedals Don't Stick”. Perhaps it is because the carmakers don't want to appear like they are kicking in Toyotas teeth while they are down, or to appear insensitive because of the deaths/injuries that occurred because of the problems with Toyota cars. Maybe its not even part of their communications and just happened to be out there. Nevertheless, January sales for Ford and GM are up over 20 percent.

    I agree that the car companies in general are global. Ford purchased Volvo a few years ago (and are now selling it). Toyota has factories in the US and Buick sells more units in China than in the US. But at the end of the day, every car company brings their profits home and whatever additional contribution results from that may be where the only difference lies.

  • hondababe

    Are American carmakers sabotaging the foreign brand cars with all these recalls? Honda announced a recall about a week ago. I guess if Ford, etc. are not capitalizing on the opportunity to take the market back, then it just may not be a sabotage. Make your appointment, get your Toyotas and Hondas in for repair – the recall is for real.

  • madia

    Toyota has been announcing more recalls and I'm wondering. I think they've been reading that case study on Tylenol a lot. Maybe they're just clearing it up and since they have built up some trust, there may not be much love lost from their faithful customers.

  • madia

    Toyota has been announcing more recalls and I'm wondering. I think they've been reading that case study on Tylenol a lot. Maybe they're just clearing it up and since they have built up some trust, there may not be much love lost from their faithful customers.

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