Sunday, August 9, 2009

The Problem with American Cars

I recently test drove a Chevrolet Corvette on a fluke. I found the car impressive and recommend it to anyone who is in the market for a sports car.

By way of comparison, I test drove an Audi S5 and a Porsche 911 4S. The Corvette I drove (3LT) had a nicer interior finish than the S5. Its performance was in the same ballpark as the 911 4S, although not as good. Its price is comparable to the Audi and nearly half of the Porsche. On top of it, Corvette had the most muscular feeling and sound - while delivering the best gas mileage!

But there is a problem: Its image. I have been told by multiple people that a Porsche is more "befitting" of my image than a Corvette. Basically, the wisdom is that if you are an overweight, middle-aged, white guy that sports a mullet, was twice married to a stripper (but the same girl), then the Corvette is for you. So, regardless of the collective impressive feats by GM to create a very good car, the "upper crust" wisdom is that the Corvette is designed for the armpit of the society.

This is a problem for GM; but, as a class, American cars have a bigger problem. To illustrate the point, I will name a few key product categories in the automotive space:
  • Most stylish
  • Highest performance
  • Most economical
  • Most reliable
  • Most luxurious
  • Most innovative
Like it or not, "American car" does not fit any of these attribute unless you die for breathing on NASCAR fumes or are red-white-and-blue-from-the-heartland-American. Revisiting those categories, here are the first product families that come to mind:
  • Most stylish = Italian
  • Highest performance = Italian; maybe German
  • Most economical = Japanese
  • Most reliable = Japanese
  • Most luxurious = German for most people; English and Lexus
  • Most innovative = German; Japanese
For American cars to have a chance of surviving, they need to own at least one of the categories above (hint to auto executives - given the times, it needs to start with most economical and most reliable, but good luck unseating the Japanese).

Consumers should be drawn to American cars because they fall in love with them, or because they think that American cars are emblematic of a key product category. GM and Ford will only get so much mileage out of the die-hard American who buys American out of his patriotic duty.

Addendum: GM's recent announcement of the Volt's 230 MPG rating has generated quite a bit of press, some of which has a skeptical tone. Per the emails that I am monitoring, I clearly get the picture that, no matter what GM's moves or announcements are, the American public (like those in Silicon Valley) will regard it with skepticism. If my GM's observations are also true for Ford, Americas car maker challenges are formidable when trying to acquire the public's confidence in efficiency (and perhaps reliability). On the flip side, Toyota's Prius and Honda's Insight are quite well accepted.

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