Wednesday, October 30, 2013

Maybe its time to consider an American car…

American automobile producers are making a comeback.  GM, Ford, and Chrysler have made tremendous strides since the government bailout.  GM paid back its bailout with interest included.  In September more than half of the top selling cars in the US were produced here at home.   Globally, GM is the second highest producer of cars.  Ford is the forth largest.  Many American producers are reporting profits even in a sluggish economy. 

Less than ten years ago people thought that the American Car was dead.  Mitt Romney famously said “Let Detroit Go Bankrupt.”  Today these same companies are doing great.  The reason:  a shift in strategy.  Fuel efficient, safe, and reliable are the marching orders.  New models are being introduced that have both domestic and international marketability.  The Ford Fiesta is one of the top five selling cars in the world because it is marketed in the US and international market.

Moving forward, many of these producers are prioritizing the international market.  Ford expects 70% of their growth to come from China and India.  As part of this new focus, manufacturers are changing the entire manufacturing process.  Ford opened new factories in Thailand to accommodate Asian demand.  Cars are being produced differently.  Instead of having parts for each model, Ford and GM are shifting to “Shared Platforms.”  This means that parts and fabrications will be universalized among all their car models.  Ford is creating five common platforms to deliver sales of more than six million vehicles.  Toyota and Volkswagen have been doing this for years.  Adapting the manufacturing process to fit best practices in the industry means American producers are becoming more nimble and flexible.

Reliability is still an issue.  American cars are ranked lowest in this category.  JD Power looks at 18 types of cars each year, from compact to full sized pickup.  Only four American models are ranked top in their class.  Overall, domestic cars average 133 problems per 100 vehicles, while import cars average 123.  On the flip side, things are getting better.  This year every domestic producer rose in dependability rankings. 

So will you buy an American car?  The way that things are going, it seems like a good idea.  I wont be trading in my Subaru anytime soon.  By the time my car finally dies, I expect American producers to have a dependent and fuel-efficient car for me to purchase.  Hopefully other consumers feel the same way.


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