Take a Look in the Mirror

As this is the introductory post to this blog, let me start with a quick discussion of the tone for this blog.  I'm trying present an even view of the american auto industry.  I was an industry insider, always a skeptic, and am now an outsider looking in.  I've seen the best and the worst of "Detroit."  I'm not trying to blame one group or the other, I'm not making a stand for any particular company or political group.   This is messy business, and the path that got the car business to this point is not a straight one, and the answers to the problems are not easy.

So lets look at ourselves in the mirror first.

Over and over you read and hear the comment that "Detroit" doesn't build the types of cars (and by cars I mean cars, truck, SUVs, etc) that Americans want to buy.    But in truth, Detroit responded to the consumer demand.  People wanted bigger, taller, faster, roomier, perceivably safer vehicles, and Detroit delivered.   The counter argument is that the Japanese were giving Americans what they wanted, smaller cars, and people flocked to them.  But what the Japanese were really giving was quality and the idea that you as a consumer were making a smart choice.  The reason their cars were small, is that these same cars were sold all over the world, including the home Japanese market, and these countries demanded, and in some cases require by law, smaller cars.  Small is what they built, so small is what the Americans got.  But for as long as the Japanese have been selling cars in America, their cars have been growing bigger, taller, faster, roomier and perceivably safer.  Just like "Detroit" cars.   Toyota now makes the largest pickup truck sold in America and is proud of it.  

Don't blame Detroit for giving consumers the choice to buy a large SUV.  The reason they built so many is that that was where demand was (and still is) and with demand comes the profit margin.  All companies, American, Japanese, German, are in the business of making money, and they are all chasing the most profitable markets.

If in the past consumers had put a high value on efficiency, meaning they were willing to pay a premium price for high gas mileage, all the car companies, "Detroit" included, would have been chasing that market.  But instead consumers demanded space, comfort, speed and luxury.   MPG was not a priority for the large majority of car buyers.  And who could blame them, living in a country with cheap gas.