Buying a new car ? What’s best ?
Quality: Toyota and Honda vs GM, Ford, and the rest of the pack
The decades long debate about quality and profits in American cars is over. The Japanese built cars that last a long time without repair, so they won the game on quality. At great cost and expense, American and European manufacturers have improved their cars greatly in an attempt to catch up, and have largely succeeded. A plateau has been reached. Most modern cars are good enough that other than warranty work, all new car buyers can look forward to years of trouble free motoring, irregardless of brand.
While it was inevitable the big three would eventually lose their monopoly position in the US, their failure to adapt their production methods and meet changing consumer tastes meant that US firms failed to innovate in the design of cars, preferring to make money by increasing the size and weight of their vehicles by adding extras like air conditioning, power steering, and fancy sound systems.It was left to European manufacturers to develop disc brakes, rack-and-pinion steering, air-cooled and diesel engines, fuel injection system, and most of the modern electronics; since Henry’s mass production system discouraged innovation.
Toyota encouraged innovation - changing its production system to become leaner and more efficient than its rivals. But, it was the oil crisis in the 1970s that first illuminated the problems of US automakers. For the first time, smaller cars were the rage, and US consumers found that cars like the Toyota Corolla were an attractive alternative to big American cars.
Imports of Japanese cars soared in the 1980s, to the chagrin of the US companies and the unions alike. And when the domestic US car companies pressured the US government into limiting imports from Japan, Toyota and Nissan just started building car plants in the US. The Japanese located their plants in low-wage, non-union areas of the US and brought new, more flexible production methods as well. As a result, they could make money on smaller cars and change models more frequently. By 2005, these Japanese “transplants” were producing 4 million cars a years, one-quarter of US output, and more than GM.
While the US companies focused on getting their quality up to the Japanese standards, and European companies focused on innovative gadgets, world events (Climate change, Pollution, & especially the End of Cheap Oil) probably mean the life cycle of the fossil fueled automobile is over. The world will run out of oil anyway. And probably sooner than we can build all new infrastructure to switch to something better.
The auto executives can see this scenario very clearly - it’s part of their job. If you need convincing, look at oil prices through the last three decades and check out Hubbard’s Peak Oil bell curve and the very similar bell curve called product life cycle taught in every marketing class. The cheap oil is gone, from now on gasoline just keeps getting more difficult to obtain and expensive.
Research and Development
Now what? Toyota, Honda, GM, and rest can all build cool new cars. Go to a car show and you’ll see lots of hybrids, some all electric cars, and an occasional hydrogen fuel cell powered car. You’ll see transformer-like fold out body panels, and lots of electronic systems – from the very common cruise controls and gps systems to futuristic systems that basically do the driving for you. It seems like they can design anything except a marketing plan and production schedule for these show cars.
Real World Infrastructure
The problem is all the existing infrastructure and sunk costs: factories and leases and pensions for workers who built the cars for the companies. And we who drive the cars have sunk costs too: the gas stations and shopping malls, roads and traffic lights, banks and burger joints that depend on customers with cars. Every American city has a commercial strip that would look like a third world country without customers in their cars.
So for the next few decades, public transportation (like buses, trains, and taxis) is only an option for the most committed big city dweller. The infrastructure just doesn’t exist and won’t get built anywhere else. You’ll need a car. And your choices at the showroom are limited to cars with conventional gasoline engines, hybrid gasoline electrics, and an occasional all electric powered vehicle.