Tag Archives: American

America Needs A Cheap Car

Domestic car manufacturers were handed a big helping hand a few weeks ago, when Toyota announced the recall of 2.3million vehicles.  Toyota has already been fighting back the consumer backlash, spending a fortune on recall fixes, advertising, and supporting their local dealers to gain back trust.  So, as expected, domestic manufacturers have seen a slight up tic in sales, but will it last?

I suspect the disdain for Toyota won’t last and with the money Honda spent on Super Bowl ads we should expect them to gain a larger portion of market share.  Now I have to ask myself, what does America need, to compete in this economy and against steep competition from imports?  I believe the answer lies in a budget friendly car and by that, I mean cheap.

Cheap means different things to different people.  To some, cheap means value, how much they get for the money they spend.  However,  in this situation, when I say cheap, I mean a brand new car, decent equipped for less than $10,000.  We don’t need a Toyota Scion knock off and we don’t need another throw away car, what we need is a cheap car that is easy to work on, a vehicle built by Americans for Americans.

Originally when Toyota announced the release of a Scion branded small car, I believe it was intended to fill this niche market.  Perhaps the niche proved too profitable and the demand for their go-kart style cars became too much, so like any good Capitalist they raised their prices.  Now it’s not unusual to see Scions go for $17,000+, still a good deal in comparison to $25,000 cars, but not cheap enough.

Americans need a reliable vehicle they can purchase for under $10k, which is roomy enough to appeal to families.  This car needs to be serviceable, meaning drop all the bells and whistles, roll back the technology to a decade ago…or even further.  I understand the need for smog equipment, but lets leave off the equipment that takes millions of dollars worth or research and development.  Give me an engine bay that has enough room to turn a wrench and less electronics and I’ll show you a happy consumer willing to get dirty, rather than go deeper in debt.

A car serves a purpose, get from point A to point B.  The problem comes when manufacturers decide that it’s not profitable enough to fill that need, so they create a need in the mind of the consumer.  I need power windows, I need advanced engine computer controls, I need power seats.  These things are not needs, but they are all too soon becoming standard equipment, driving that inexpensive car price tag, to that of a luxury car just a few short years ago.  We need a company that can get this ideal across and sell it well.

The company, ideally a spin off from one of the Big 3, should embrace the culture of do-it-yourselfers and those wanting to live a lifestyle away from status symbols.  This company should spend marketing dollars on showing the value of having a reliable mid-size car capable of fulfilling a need and show what the money wasted on other products can now pay for.  A better life, away from debt, away from worry if it breaks down, and away from the stigma of a throwaway car.

This new market niche can be created, it can be exploited, and can be profitable based on volume.  We can have nice cars built for less than $10k, but as Americans we have to be taught that the most important aspect of a car is its ability to reach point B.  This new market won’t care about $1 million prototypes or how shiny the concept model looked at the Detroit Auto Show.  This new market will fall in love with a car they can repair in their drive way and be proud to take the kids to school in.

It’s a bold and brave endeavor, if only somebody would step up to the task.

Ford Posts $2.3 Billion Profit


So Ford posts a $2.3 billion dollar profit today for the 2nd quarter of 2009 and already the official industry experts are chiming in.  I already have  a view point on why Ford managed to get in the black for the second quarter and it has nothing to do with vehicle offerings.  That’s right, I don’t think hybrids and fuel economy had anything to do with the recent numbers published by Ford.

In my opinion Ford manged to turn $2.3 billion in profit because they received the support of the American consumer.  The regular Joe blows saw that this corporation was not taking a hand out and decided to show their support through their wallets.  The American consumer, when faced with countless options on car lots, decided to choose a Ford vehicle over GM, Chrysler, or Toyota.  It’s a sign that the majority of Americans don’t support the bail out plans in Washington.

Another driving force in sales will be whether or not the vehicle you buy now will be supported 5 or more years from now.  If you have a major component go out on your car after the warranty has expired, will parts be radically expensive, or supported by the manufacturer.  Vehicles that are discontinued generally see higher replacement parts in generic and OEM form, why put yourself in that kind of a position.

I thoroughly realize that $2.3 billion in profits is a far cry from where a company this size needs to be, especially to keep the stock holders happy.  However, in this economic environment every ray of sunshine helps to swallow the negative news around every corner.  It’s a move in the right direction and I hope Ford can prove themselves again next quarter and the American people continue to voice their opinions with their wallets.