Commentary
We’re always complaining about Detroit’s mistakes, and there are plenty for sure.
But they make them in Wolfsburg and Tokyo and other places, too. To be fair, here’s a list of a few of those.
Honda: Despite the success of the regular Accord sedan, the Accord hybrid-electric vehicle was a failure and has been killed. Before that, the Honda Insight HEV bombed, too. Honda has not been able to figure out what the word “luxury” means to Americans, either. The latest effort, the Acura RL, is another flop-eroo.
Volkswagen: I have a soft spot for VW going back to the original Beetle, but that makes it doubly sad because this auto maker has forgotten who its customers are. In its drive to move upscale with mistakes like the Phaeton ultra-luxury sedan, VW ignored completely what Americans buy: it offers no pickup; no minivan, no small, inexpensive cross/utility vehicle.
The price of VW’s neglect is losing $1 billion a year here in the U.S. Even today, the corrective measures still to come are too little, too late, such as minivan made by Chrysler and a small CUV with another unpronounceable name.
The Americans at VW’s U.S. operations understand the market here, but the Germans back in Wolfsburg are too arrogant to care. And moving its U.S. headquarters to Washington? This will be worse than Nissan’s Nashville mistake.
Speaking of Nissan, overestimating potential is dangerous. Nissan brought out a fullsize pickup and a big minivan, which was fine. But then it expected to wow the market, forgetting its dealers never sold a big pickup before and did not know much about minivans.
They had no customer base for these new vehicles; sales were weak; and with a new factory, new vehicles and new workers, there were inevitable quality problems. Nissan should have expected a slow start and worked harder to build the business from scratch.
Hyundai: Its cars and CUVs are improving all the time, but talk about too much ambition. And whenever an American manager tries to tell the bosses back in Korea their sales goals are too high, he gets fired. That is not the way to win.
Someone should tell Hyundai that trees don’t grow to the sky, and a new plant in Alabama and one going up in Georgia is too much capacity for a slumping U.S. market. What’s more, as smaller competitors such as Hyundai and Kia become more of a threat, Toyota, Honda and Nissan start targeting them.
And yes, even Toyota has missteps. Remember the Previa minivan and the just-too-small T-100 pickup? The launch of the new Toyota Tundra also was clouded with embarrassing quality problems. Another possible mistake: the boring new Corolla.
Toyota claims the Corolla is the No.1 small car in the U.S., but that’s because sales of the Corolla-based Matrix hatchback are lumped into the total. According to Ward’s data, the Honda Civic is the single best-selling compact.
But the main problem isn’t with the numbers; it’s with the car. The ’08 Corolla is all-new, but it’s a rehash, done cheaply to hold the cost down. The latest generation of the Honda Civic has gone decidedly upscale. We’ll see which strategy ultimately is more successful.
Other gaffes: Mercedes’ struggling R-Class CUVs look like minivans; Mitsubishi made that terrible blunder years ago selling cars to people who didn’t have the money to pay for them (the subprime disaster for cars); and Subaru never should have let Australian pitchman Crocodile Dundee get away.
As GM Vice Chairman Bob Lutz likes to say, this isn’t a business for wimps. And nobody’s perfect.
Jerry Flint is a columnist for, and former senior editor of, Forbes magazine.
