Auto sales figures were all positive at the end of 2011. There must have been something in the candy canes dealers were passing out in December because Chrysler’s sales were up 37% when compared to the final month of 2010 and a similar comparison of Ford numbers showed a 10% uptick.
Vehicles sold at times this year at a 13 million annual pace, so 12.8 million units sold doesn’t seem unexpected and looks good next to last year’s 11.6 million performance. So why would anyone offer advice on how the automotive industry can remain a positive economic force in the future?
Well since January is a month of renewal and resolve and since there is always room for improvement, here are some suggestions to pass along to the Mulally’s and Inaba’s of the world.
Automotive engineering failures are always going to be problems for the owners who are unfortunate enough to pick a loser. Some examples are the brakes on some Dodge Journeys, rear control arms on late 90’s and early 2000 Ford Explorers and nearly everything about the vehicle called the Caliber. So we need the car makers to man-up, admit to their shortcomings, stop the silent recalls and resolve to make their customers whole again.
Although it may sound contradictory, we also need more of the same. Think about the vehicle that you are driving right now, most likely the odometer is reading over 100,000 miles, but you expect to have the option to drive it for 100,000 more miles. Cars and trucks are simply better made than they were in the 1980’s and for this the engineers and production workers from Georgetown, Kentucky to Seoul, South Korea need to be congratulated. Since the national fleet is aging, the car makers need to have a long life perspective in the development of their products so they can reach their dotage gracefully.
Certainly, 2011 was more like a stroll in a minefield than a cake walk. For eight months of the year the American jobless rate was 9% or higher. The Spring was marked by the Fukushima earthquake/tsunami which badly hampered Toyota and Nissan production and supply channels and restrained Honda’s performance as well, but to a lesser degree.
So if the car makers can achieve their best sales year since 2008 in the midst of this adversity, it must be a sign of the pent up demand for new cars. Unfortunately, it also means that the walking wounded and the top earners in this economy are the ones who are buying cars. That same urge certainly exists in those who are casualties of the downturn, which brings us to another opportunity for the car companies.
It just might be time to move away from the longstanding practice of selling the “experience” of owning a car and instead pitching the utility. In a worldwide environment of economic duress the future holds promise for the car makers who can produce and promote vehicles which provide dependable transportation which can be sustained on incomes that may continue to be at risk. By necessity, consumer preferences may be moving away from the era of the Expedition and the Pilot to the age of the Fiesta and Fit.
National Conference of State Legislatures, www.ncsl.org
The Wall Street Journal, www.wsj.com