I'm not even sure what an American car is.
Nissan: Smyrna, Tennessee; Canton, Mississippi; Decherd, Tennessee
It is very very difficult to import a truly foreign built car. There are many many obstacles in the way. The "Made in Japan" cars are leaps and bounds ahead of anything built "for" North America. If we were actually able to buy them here, the prices for cars from South East Asia would totally disrupt the North American car market -- maybe there are some startup ideas in this!
Of course it's not the "patriotic" thing because it would collapse a good chunk of the economy built around Detroit if no-one bought a new car for a year.
I don't expect everyone to drive a 15 year old car like I do, but I simply do not understand why people buy brand new cars when the previous year model with only a few thousand miles will be thousands of dollars cheaper.
Buying used (or coming off lease) is generally a wise choice, but sometimes there really is a qualitative feature difference between this year's model and previous ones. If you are selecting a vehicle with mediocre milage in the first place, getting a new model could mean a 15-20% difference in mpg and that will probably pay off the price differential between the new car and a used car.
For the reason why this would actually be a good thing, I recommend (to everyone who will listen!) to read How an Economy Grows http://freedom-school.com/money/how-an-economy-grows.pdf
Its kind of long, but its a very entertaining read.
The smart money keeps the car they have until the market settles.
05 GTI turbo new? ~$18,000
05 GTI turbo when I bought it with 97k miles, all dealer maintained? $9k
Environmental reasons aside, buying used vehicles in good shape is an excellent way to judge reliability. The 5 year break in period not only provides a prospective used car buyer with a good idea of reliability, but it also allows you a great gap of time for TSB's and recalls to pop up, so you know exactly what you're getting.
I'm glad we have them, so I can buy a barely used car at a 30-50% discount.
A person less likely to sell his/her used car if it's running great.
Thus the "used car discount" adds in some % reduction due to it's selection being amongst a less healthy population of vehicles... probably not as much as 30-50%, but probably at least half that.
What am I missing?
If you plot any piece of random data, and then sort by frequency you'll get a graph that looks more or less like this.
I think you should verify your data in two ways:
1: Plot the graph for each year separately, and see how correlated the years are. If the rankings are the same year after year then you have something, otherwise it's just random.
2: A second thing is randomly divide American and non-American each into two groups by model (just randomly assign each model into american 1, american 2, non 1, non 2). Then plot the data for each group in each place, and see if the rankings are the same - if they are, then the American vs not distinction is valid. Otherwise, again, you just have random data.
I'm sure there's some noise here, but the above strongly confirms conventional wisdom.
"American" small cars have a reputation that is not so good.
And indeed I think a commentator has remarked that the focus is on the consumer behavior, not the car industry per se. If the distinction is ignored by the main body of the customers, it can be not too important for the researchers as well.
what's the fundamental difference?
Car companies have massive discount plans for workers, friends and family, supply chain workers, previous customers, etc.
Detroit has lots of automotive industry workers, and thus for many people around Detroit, it's silly not to buy the car that you can get at a huge discount. This isn't necessarily an American vs non-American choice, since workers are typically eligible for a steep discount with only one car company.
Around the time that Japanese automakers began producing quality products, automotive execs in Detroit looked out their office windows and saw an increasing number of competitors' cars in the parking lot and it scared them. What kind of statement is it when a worker buys the competitor's product. So they offered steep discounts, which are pretty much guaranteed to result in workers buying their employers' product.
In more recent years, this has also been used to boost sales numbers in times of crisis. US automakers have had miles of unused tarmac near Detroit Metro airport filled with cars that they couldn't sell. At some point they just offer a steep employee discount and now a bunch of dud product that is losing money can be turned into a few months of strong sales. By using employee discounts for this, the firm is not seen to be succumbing to massive widespread discounting, and so the technique stays off the radar fairly effectively.
When you consider the cities that have automotive plants, supplier manufacturing plants, etc. and all the discounting going on in these areas, the chart starts to make a lot more sense.
Now for a small rant: Ironically, preventing workers from experiencing competitive products seems to have created tremendous myopia in Detroit and may be responsible for the decline of the US auto industry. Detroit is still using cheapo vinyl and plastic on midrange and even low end luxury cars, far inferior to the materials used on low trim-level Honda and Hyundai models.
One can imagine that if more workers had needed to think carefully about what they wanted to drive, the handwriting would have been on the wall and something could have been done about it before it was too late.
Note to business owners. If you have to discount your product by over 20% to get your own employees to buy it, take a closer look at what they prefer about your competitor's product.
In the Detroit area, there was tremendous pressure to buy American. I observed this both from friends and coworkers. There was definitely at attitude that you should support the local economy, especially if you're employed by one of the Big Three. If company X is employed you, then you need to buy company X's product. It's almost as if you owed it to your employer, that your paycheck somehow has strings attached, that the proceeds should never be used to purchase a foreign car.
Chrysler took it a step further and forced non-Chrysler cars to park in the "competitive vehicle parking area" of the employee parking lot - which happens to be the farthest few rows.
The mid 90s was also toward the early edge of the use of the technique to generate sales.
To give you an example, a vehicle that the typical person would lease for around $400 per month would be available to an employee for about $275 per month. Chrysler executives get a new free lease every year, even after they retire.
Imagine Google engineers NOT using GMail --or, rather, avoiding GMail. Exceptions for studying the competition and all.
Imagine the pressure form colleagues. "Yeah, I work at Google, of course, but I prefer to use Hotmail. I don't even have a GMail account".
It's their version of dog-fooding it. Albeit, one with greater bottom line involved.
I believe that as an employee, I am free to purchase any product or service without any obligation to my employer.
For the rest of us who don't get discounts.... the world is our overpriced oyster.
I feel a particular affinity between D.C., SF and NYC, I wonder if it's the similar mix of cars that do it?
More importantly, I see sales figures for some American cars, and find them unbelievable. I see way more Hondas, Toyotas and Hyundais these days then just about anything else. Stop at a stop light and I guarantee there will be on of the above three cars one car away from you.
Then I travel to the midwest, lets say Ohio. And boom, American cars everywhere. Those three brands above are almost nowhere in sight. And suddenly the sales figures make sense. I can't remember the last time I've seen a a Ford Fusion, but they move around 20,000 a month. In Ohio, I can't remember not seeing a Ford Fusion.
1. Most American cars are NOT world cars, I'm a big guy, 6'3 300 lbs, I dont fit well in a world car, so I'm always looking at vehicles designed for the North American market, plus I do a whole lot of long distance driving.
2. Less intensive maintenance schedule, my town car will never need its timing belt changed, nor a valve adjustment, the primary services done, are simply to change fluids.
3. While is sounds jingoistic, its patriotic, I prefer to buy something made here.
What's worse, the Lincoln Town Car got the worst score possible for expected ownership costs (1 out of 5) and had a 55/100 overall score. (http://www.consumerreports.org/cro/lincoln/town-car.htm)
Compare to a Camry's score of 93 or the Accord's score of 90, with 5 and 4 points for ownership costs respectively.
Lots of foreign cars are made in America, several of them are far more American-made than American cars are.
Check your own car here:
Or see the Consumer Reports article on it here:
I am hopeful that Ford, at least, is on the path to making a car I would buy.
#2 is bizarre. I'm not even aware of a modern car that requires this as regular maintenance.
More importantly, until fairly recently, American cars have a long history of requiring aggressive maintenance. They aren't as bad as say, German electrical systems, but they've been pretty darn bad.
#1 is also strange as many foreign cars make specific American versions of their cars for the larger Americans. Or their world cars are sized for the large U.S. market.
Which is also the reason it gets terrible mileage and is horrible for the environment. It's an unsophisticated hunk of junk, basically.
Keep up the great work, always a pleasure to read one of your articles.
Hang out at a gas station 8 miles away, however, and you see maybe 50% American cars.
Also, why is Salt Lake so high in used-car prices? Large Mormon families?