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April 15, 2005

Bottom Line on Detroit Automobile Corporations « Car Issues »

It's not that GM and Ford aren't improving. They are. They put out far better cars now than 10 years ago. It's just that the automobile manufacturing world is amazingly competitive these days. The internet is creating an extremely savvy, sophisticated, and demanding customer who won't get bamboozled into a sub-par car as easily.

Look at all the reaching that BMW has done to maintain their market share. It looks like they miscalculated. Even Toyota, Honda, and Nissan are taking some risks to try and increase sales; and then Hyundai, Kia, and Suzuki are trying to gobble up customers/market share from the opposite end. VW is trying to explode on the market and turn a 4-car line into a best-seller of affordable-level performance/style/luxury ("affordable" being relative to the market demographic, of course).

Detroit had the chance to fix things 10 years ago, when SUVs were getting to be a big deal. They should have anticipated that relatively cheap gas wouldn't be around forever, and that things come full circle, bringing more and more people out of the truck/SUV market. But instead of plowing profits into entry- and family-sedans, they just expanded their SUV lines in a move toward short-term profits. In the end, they all chased after the same market demographic and totally lost the bulk of the car market to the Japanese and the Germans.

To those who might think I'm kicking GM when they're down: how many posts have I made worrying about BMW's mistakes and offering my thoughts on how they could fix it? Zero.

I'm upset, yes, that GM didn't want to make the car I love so much that I'm 90% a Suzuki customer for life.*

*based on current circumstances, I'm 100%. However, there are two aspects that remain to be seen and will make the difference, and two possible follow-on influencing factors:

1) What maintenance problems do I encounter in the 5 years I plan to own the car? If it's none, I'm a Suzuki customer for life. If it's more than 10, I'll tell everyone to avoid them. 1-2, I'll consider buying another one based on how well they improve reliability over the next 5 years. I'll also move on to the second tier of importance.

2) Theyshould have a car with a better engine. Actually, they already do, but it's only in the Aerio. And it's only a little better, to tell the truth. But with five years to improve technology, I'd hope they can have one that retains the smoothness and quiet torque but improves fuel economy. Heck, I don't see any reason they couldn't have a button connected to the computer control module that allows you to choose a more sporty, economical, or luxurious (smooth) shifting/acceleration profile. A 5th gear in the automatic would probably help, too.

3) Price. If they accomplish the first two, I'll buy a Suzuki even if they raise the price to be just as high as a Camry or Accord. If they make no improvements at all, I'll still buy if the price remains just as good a value, i.e., $4k-$10k cheaper. Something in-between those limits, and I'll consider.

4) The car line itself. In 5 years, I should be higher rank and making significantly more money, and may want an even nicer car. If Suzuki doesn't add anything above the Verona and I decide I really want a Lexus or Audi A8 level car, well, I'd have to leave Suzuki, even if they have met my demands on the first 3 aspects. This one is hardly a sure thing, though, because I do like inexpensive things, especially big purchases like cars. I don't think I could imagine wanting a bigger and more expensive car than a Verona.

Posted by Nathan at 01:30 PM | Comments (3)

based on current circumstances, I'm 100%. However, there are two aspects that remain to be seen and will make the difference, and two possible follow-on influencing factors

You missed #5. That's "when GM slaps a bowtie on a Verona". ;)

Happened many a time before, easily could again.

Posted by: Jo at April 15, 2005 02:18 PM

Sure...except that GM only owns 25% of Suzuki, so I expect they should be independent enough to refuse that.
Because Suzuki is in the middle of an ambitious 3-5-7 drive, and I don't think it would help those plans at all to allow their top-of-the-line car to be sold as a GM car.

Not to mention that GM would probably have different pricing, incentives, maintenance shops. I'd probably still go with Suzuki, even if I had to drop down to the Forenza (which I liked only infinitestimally less).

Posted by: Nathan at April 15, 2005 02:27 PM

I have owned a Forenza for a year now, Its my 2nd, the first one was ass packed by a Chevy conversion van. 60 mph hit on a stopped car and all 3 of us 1-f 2-rear walked with out a scratch. I have spent about $1000 to correct the short comings of my s model which still puts me $8000 under a compareably equiped Honda. I am over 200 hp and have replaced the springs with Apex lowering springs. I have no complaint. I have had 0 problems and if suzuki never updated or changed this car I would keep buying them.

Posted by: possert at July 15, 2005 11:35 AM
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