Great article on the problems the American auto makers are facing today, epitomized by the new Chevy Malibu.

http://online.wsj.com/article/SB123854495134475899.html


[QUOTE]KANSAS CITY, Kan. -- With his teenage daughter needing a car, Robert Neighbour expects to buy a Toyota Camry. Never mind that the new Chevy Malibu -- built just a few miles from his home -- bested the Camry in a recent reliability survey.

"Toyota has just more consistently done a good job," says Mr. Neighbour, a suburban Kansas City computer-systems analyst.
Timeline

http://online.wsj.com/article/SB1238...34475899.html#

Track the history of the Chevy Malibu with key dates and photos.

His skepticism about Chevys represents one of the biggest issues facing General Motors Corp.: Even when GM builds a prizewinner, many Americans still favor a Toyota or Honda. As the latest Malibu collected honor after honor -- including a recommendation from Consumer Reports -- the Toyota Camry outsold it 437,000 to 177,000 last year in the U.S., according to Autodata Corp.

"A perception of inferior quality is the most serious problem facing GM," aside from its financial predicament, says David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.

This week, the Obama administration cited the redesigned Malibu, which hit showrooms in late 2007, as evidence that GM is making higher-quality cars. Under President Barack Obama's restructuring proposal, the government would negotiate or impose severe cost cuts and debt reductions on GM, enabling cars such as the Malibu to pave a new path to profitability.

But the government can't impose upon car buyers a belief that GM makes worthy vehicles, even as the company prepares to roll out a host of new designs. In the next few days, GM plans to introduce a new Camaro also refashioned in hopes of reviving Chevy's lost mojo.


Here in Kansas City, GM's problem is especially evident. The largest taxpayer in Kansas City, Kan., is the GM assembly plant that makes the Malibu. It employs about 2,500 workers and supports at least twice that many jobs at local suppliers.

The Malibu is also a source of local pride: Among auto-assembly plants in North America (including Toyota Motor Corp. and Honda Motor Co. factories), the Kansas City GM plant consistently ranks among the most efficient, according to the Harbour Report, a highly followed analysis of auto-making efficiency. Last year the plant ranked third in overall quality among 67 auto-assembly plants in North and South America, according to the most recent J.D. Powers & Associates quality report. It was bested by two Toyota plants.

Yet even buyers here remain unconvinced. Last year, shoppers in metropolitan Kansas City bought nearly twice as many Camrys as Malibus -- 2,185 to 1,262, according to R.L. Polk & Co.

Despite the local economy's stake in the Malibu, Terry Ruby, a retired Kansas City investment adviser, didn't even consider buying one before opting for a new Toyota sedan last year. "I'm satisfied with Toyota, and I don't think the American cars are equal yet," Mr. Ruby says.

This problem can't be fixed overnight. It took decades for Toyota and Honda to steal big chunks of the market from GM, and it would require years for GM to steal it back -- as rival Ford Motor Co. has learned. The percentage of Ford vehicles on the recommended list of Consumer Reports rose to 70% in 2009 from just 26% in 2002. But Ford has yet to witness any dramatic gain in market share.

"It takes word of mouth," says Bennie Fowler, vice president of global quality for Ford. Still, he predicts: "It won't be long before a Ford vehicle takes its rightful place in the customer's garage."

The problem is, the U.S. auto industry is in no condition to wait very long for buyers to come back. Auto makers are on pace to sell just a little over nine million vehicles in the U.S. this year, a steep decline from the 16 million cars and light trucks they sold in 2007. The sales decline represents the output of roughly 24 auto plants.
Discuss

 

I tried to steer my dad towards one (and he ended up buying another GM product about 3 months ago). He went to all the local dealers and all they had were 4 bangers. He wanted to drive a six but not one of the dozen or so metro dealer had a V6. He got bored and moved on.

This was in about November when sales were slow and they should have had one somewhere, but dealers were so scared to order and carry more inventory that nobody would get one in. He did like the ones ha drove, but not enough to live with the four cylinder.

 

I agree with the OP. It takes generations to lose the funk. It dosent matter how much you've changed in a short time. A buddy of mine bought one last year. Its a solid car. I would definitely pick one over a Camry. I'd pick the Accord first though.

 

What's crazy is that it took them THIS long to finally start making good cars. Hopefully they remember this if they ever get tempted to start making crap again.

 

The plain fact is GM has burned customers for decades. Here they come again with

 

Even if GM hadn't pissed off previous customers they have an uphill fight. It's hard to pull satisfied Camry and Accord customers away simply because they see no reason to switch. Mazda and Nissan who don't have a legacy of poor quality have the same problem. Also while GM did burn customers in the past, consider that any more many potential buyers have simply never owned a GM car. We are now dealing with a generation of buyers who, like me, basically don't remember a time before Japanese cars. My parents have had Japanese cars since 1984. The domestics never burned my parents it was simply they bought a Toyota, liked it and never really looked back.

Even if people know the GM car is every bit as good, they really need to pull a VW to make clear headway. VW's reputation was lousy in the 90s. They pulled out the stops with the B5 Passat and delivered a killer car for Camry money. That got people back into VW showrooms. Of course I'm not sure they made much money on that car and the Domestics are not in a position to dump extra cost into the cars in order to gain sales. Their labor cost advantage isn't as bad as it was in the 1990s but it isn't on par yet either.

Please note that as the cost disadvantage has been improved, the quality of the cars has gone up. I remember people 10 years ago saying GM and Ford just needed to build better cars while not understanding that their labor costs prevented them from simply adding the extra content (cost) needed to make the interiors as nice as the Japanese. Now that the labor costs are finally coming down we can see GM and Ford are catching up on the interiors (and other areas). Of course this begs the question what took so long. I suspect it took so long in part because it took that long to convince the unions that they really needed to REALLY give in or they really would be out of a job. I don't think it was easy to get concessions from labor when the doom and glum scenarios were seemed to be 10+ years out.

 

[QUOTE=ElTianti,Apr 2 2009, 06:31 AM] The plain fact is GM has burned customers for decades. Here they come again with

 

They say a GM car will run poorly longer than most cars will run period.

I don't think it was so much that GM cars were unreliable in the 90s, it was that they were styled by drunk chimps, had horrible ergonomics, and used cheap materials. If you look at a 2000 Malibu and a 2000 Accord, there's just no competition - Japanese cars blew American cars out of the water.

I have one friend, for example, with a Saturn SL2. 130,000 miles and going strong, its had one serpentine belt replaced, and it consumes some oil now, but has had no mechanical problems. It does however look ugly, its seats are uncomfortable, the engine is buzzy and rough, and the interior looks cheap.

Now, we're finally seeing the fruits of quality design and engineering, but the public opinion that dictates car sales will take much longer to turn around. Its the same mentality that took 30 years for people to accept japanese cars.

I think Japan built more reliable cars in the 80s, and used better materials in the 90s, and got its reputation for both in each decade.

 

Why can't GM and Chrysler just die. Imagine the new companies that would spring up in their place, using Japanese technology, European designs, and good ol fashioned American muscle (albeit in slightly smaller, more efficient doses. ). Who would lament the death of those unions and the disappearance of the vast majority of both their product line-ups. Nobody who likes cars, that's for sure.

 

Good read, but I think the new Malibu is a pretty good car, I would have picked it over my '07 Camry if it was out sooner