I was wondering, just where will they find customers for all the $200,000+ cars, the Maybachs and Rolls Royces and Cunninghams and SLRs and Lamborghinis and Bentleys and Bugattis?
Then my friend Wayne called. He sells real estate and got a listing for the house right above ours. This really is a small house in bad condition. Wife Kate calls it “a complete teardown.” The owners wanted $350,000. This isn't Beverly Hills or even Bloomfield Hills. It's Columbia County in upstate New York. I had figured maybe $100,000 max.
Wayne had hinted that $350,000 was a bit much, and Doris, the seller, said, “You only have to catch one fish swimming upriver.”
I think that explains the market for these super-expensive cars.
Now to something completely different: Product seems to be the key success element in the auto industry these days, and the other guys are able to get out more product than the Detroit team (, and ).
Take crossovers. Quoting from a Merrill Lynch study, for '02 new models, the Japanese had three (CRV, Highlander, Subaru Forester) and Detroit two (Buick Rendezvous, Saturn Vue). For '03 the score was 6-3, and the American trio included the Toyota-built Pontiac Vibe; the other two entries were just wrong.
For '04 the Japanese had five (Infiniti FX45,PSU, Nextourer, Scion SUV, Acura SUV) compared to two domestics (Cadillac SRV and Pacifica.)
This listing's not perfect, but it shows that importers pump out more new stuff.
Sure, there are only three Detroit companies, while there are eight Japanese and four German companies, so of course, 12 companies will bring out more models.
But Detroit still seems terribly slow in creating product. After all, a crossover isn't a terribly hard feat; you need a front-wheel-drive car and a 4-wheel-drive system.
I think we lack imagination and speed. Example:'s then-CEO told me they couldn't build a crossover from the existing Taurus because Ford couldn't get a 4WD system into the car. I accepted that then, but not now. If you can get all-wheel drive in an Audi TT (and that is one small car), why can't you get it in a Taurus?
Let's name a few things that could have been done earlier:
Chrysler: The PT could have offered 4WD or DC could have built a small, closed Jeep with a desert warrior look. In fact, Chrysler showed both, but never built them.
Ford: Why not an AWD off the Focus wagon or an Escape for Mercury, possibly with design distinction, like a woodie look.
: Why didn't GM move faster with a small-but-distinct SUV for Chevy and build it at 's Canadian CAMI plant?
But this is a game, conjuring up vehicles that could have been built. This is a job for the companies themselves, to create vehicles built off existing platforms for modest cost.
It is what the other guys do.
They say that product is king. Then let's have more.
Jerry Flint is a columnist for and former senior editor of Forbes magazine.