Sunday, September 04, 2005

Different Problem, Same Analysis

David Welch wrote this piece for Business Week, in which he argued that Detroit must, somehow rekindled the spirit of love with the American car buyer and while I agreed with the tenure of man, love and automobiles, I think that Mr. Welch has approached the issue of Detroit and dwindling car sales from the wrong end of the stick.

First of all, there IS NOT any lost love affair between man and his car. GM recently proved that with their employee discount sales program. I suspect this may have sold better in other parts of the country than here in Detroit because almost everyone in this place already uses the program. Most people that I know, have two or three family connections within the three car companies and it's only a matter of picking which offer to use when they're buying a new car.

Point: People in America love their cars but THEY ARE NOT IN LOVE WITH THEM!!!

No ANDS, IFS or BUTS: They do...

However, to understand what I am about to say, I must look at an different industry: the personal PC and see what is going on within that business. For a miramid of reasons, the personal PC is known as a "throw-away" item.

This point is made more obvious whenever MicroSOFT releases a new operating system: Vista is no different. Consumers are being told they will have to upgrade the hardware to take advantage of the added features. Dell, HP and the software manufacturers are pushing the same line: Upgrade!

This is just another marketing hype to sell a new PC. Round and round it goes.
Where it stops, no one knows.

Similarily, people love their cars BUT there being seen, more and more, as a "throw-away" item: Drive new for a few years. Trade it in. Drive another. That two year lease agreement has helped this concept along nicely.

Additionally, in their drive to create the perfect closed-loop system, the automobile manufacturer has cut out the one person that should matter most to them: the consumer.

The consumer cannot do anything with his car except take it to a dealer when it breaks. He doesn't have the expensive diagnostic tools to help with the slightest suggestion of what is wrong: so to him, the car has become a "throw-away" item.

The car is no longer useful if it is not working BECAUSE he cannot fix it: he CAN ONLY PAY to have it fix and therefore, like the man contemplating a software upgrade, the car lover's choice has come down to always getting a new one.

When a man cannot put love into something, he soon discards it. We see this play out every Christmas when we give toys to our children.

How long do they play with them?

Yes. People do love their cars BUT only in this sense that they have become tools: shuttle kids around, commute to work or even take a vacation. However, people do not spend weekends fixing their cars in their garages anymore, except the car is an antique and there are very few of thoses.

Yes, sir: Americans still have a love for their cars. We see it all the time. 18 million times annually, in fact. Unfortunately for the bunch, Toyota is the Dell of the automobile.


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