Are American Cars Obsolete?
It used to be that savage competition was the norm for popular-priced cars, but the luxury field enjoyed more genteel conditions. Those days are gone.
Until the 1970s, Cadillac owned the majority share of high-priced car sales. American brands Lincoln and Imperial struggled to compete. Foreign brands, as we called them then (mainstream now), such as Mercedes-Benz, BMW, Jaguar, sold a few cars to “motorhead” customers. Japanese brands were still busy dethroning Volkswagen and didn’t even dream of attacking the luxury sector.
Fast forward to 2005. Brands contesting the luxury field include Acura, Audi, BMW, Cadillac, Infiniti, Lexus, Lincoln, Land Rover, and Porsche. Best seller: Lexus. Second: BMW. Acura, Mercedes and Cadillac are well behind the first two, but comfortably ahead of the other four.
I’ve been driving the new Mercedes-Benz R-class, a blend of sedan, station wagon, SUV and van. It’s big, it’s expensive, and it’s very, very capable. It seeks to redefine comfortable seating for six, with three rows of two bucket-seats. Either a V-6 or V-8 engine is available. Depending on equipment, the R costs $50-70,000. The price made me recall the early ’60s, when I was sales manager for the local Mercedes-Benz dealer. Mercedes-Benz then made the unquestioned best cars in the world the biggest difference between then and now is that now they face plenty of competition for that “best car” position.
Back in 1963, Mercedes-Benz sent us a new sports car, the 230SL. The 230SL became the 250SL and finally the 280SL (bigger engines each time) in its nine-year life. But when my boss and I looked over that first one, priced at $6300, we wondered how we’d ever sell one. As you may know, that car sold very, very well, and even today is valuable and sought-after.
One wonders how this R-class will fare as well. It turned out that the 230SL really had no competition. Jaguars were a totally different type of car. So were Thunderbirds and Porsches.
But the R-class isn’t that much better than several cheaper but similar vehicles. DaimlerChrysler’s own Chrysler Pacifica makes a handsome and able alternative, of more-or-less equal quality, for less than half the money. The Ford Freestyle, similar in size and capacity, is a car I liked a lot earlier this year. Consumers didn’t agree with me, and the Freestyle will soon be dropped.
An especially worthy alternative to the R-class Mercedes is the FX from Infiniti, which costs about 25 percent less. They’re only five-seaters, rather than six, come with V6 or V8 power, and are really handsome.
There’s another way to look at this Mercedes-Benz. See it as a reasonably-sized, owner-driven limousine. It has very generous seating for four, plus two extra seats, not unlike “jump-seats” in a limo. The difference is that in the Mercedes the jump-seats are the rearmost, rather than between the rows of “good” seats. In this personal limo perspective, the Mercedes could also be used by a luxury resort to carry guests.
The truth is that these are all very fine vehicles. The problem for high-priced cars today is that most of the excellence has migrated down-market. In other words, much lower priced cars have virtually the same features and qualities as luxury brands. And, as Toyota repeatedly proves, low price doesn’t preclude high quality. Consumers get the deal of a lifetime, while manufacturers struggle to remain profitable.
GM and Ford are unlikely to survive in their present form. Here’s why. Over the last 50 years, importers have been offering what Detroit didn’t.
There’ve been three phases: 1946-55 sports cars like MG and Jaguar offered a thrill that was new to America; 1955-70 the VW period. Volkswagen taught us about cheap, economical, reliable small cars; 1970-present the age of Toyota. The Asian producers gave us the same economy as VW, but with performance, style and variety, and even better quality.
Concurrently, during each of these phases, luxury makes such as Jaguar, Mercedes-Benz, BMW, Audi, then Acura, Infiniti, and Lexus, were reshaping that market, too.
In every case, the importers offered something not available from Detroit. It was fairly easy, because Detroit was smug. They underestimated the appeal of the competition until it was too late. Customers were dissatisfied with domestic cars, so they switched.
Now, Detroit falls short again. They’re seeking parity with the imports. That won’t work because Toyota, BMW and Infiniti owners are happy with their cars. They’d only go back to a domestic car to obtain some advantage, not merely parity.
All the foregoing doesn’t mean the end of the American-built car. Overseas producers have built at least two dozen plants here, producing Toyota, Nissan, Mazda, Isuzu, Subaru, Honda, Hyundai, Mercedes-Benz and BMW. These plants are located in Michigan, Tennessee, Kentucky, Alabama, Mississippi, Indiana, California, and soon, Texas. Twenty-six percent of the cars built in North America come from Japanese owned plants. That’s more cars than GM makes.
The big difference: no United Auto Workers union, with their stifling work rules. The Japanese plants pay good wages, provide health care that is competitive, have happy employees (and no unions).
So enjoy your German-American, Japanese-American or Korean-American car with a clear conscience.
Best Car of the Year
The truly brilliant designs are always pure and simple. They do a lot with a little. Think VW Beetle, Fiat Topolino, Citroen 2CV, MiniCooper. For me, a car needs to be fun as well. So you won’t be surprised to learn that the 2006 Mazda Miata, costing under $25,000, fitting into almost any parking space in San Francisco, offering economical, top-down driving, in a simple, attractive, durable package, was my favorite drive in 2005.
As a free service to Gazette readers, Martin will gladly offer suggestions on how to dispose of a cherished car. Call him at 415-479-9950.