The Prestige Payoff

In 1973 I bought a Plymouth Duster, a coupe, for $2,650. Today you can still find a strippo of some kind for under $15,000, but a well-equipped family sedan is in the low $20,000s, and many of those have 4-cyl. engines. I'm looking at a sticker of a loaded Nissan Altima with a four: $24,564.

We bought a 1997 GMC pick-up, the big V-8, with three doors, extended cab, CD, leather, 4-wheel drive, the works, and the sticker price was $29,000. Today an absolutely loaded GMC pickup can go to $40,000.

And a decently equipped 4-wheeler — the Ford Explorer, the Jeep Grand Cherokee, the Chevy Trailblazer — starts at $30,000 and runs past $35,000. The bigger stuff, the Tahoe/Yukon/Suburban/Expedition 4-wheelers run $35,000 and up. I have a friend who paid more than $40,000 for a Yukon, and he loves it, too.

The Toyota Highlander is in the $30,000 range and the Acura MDX and Lexus RX 300 are closer to $40,000.

The Chevy Avalanche is in the $35,000 class, and the Hummer H2 will march in the army of $50,000 and up. Most of the low-end Mercedes and BMWs are really $35,000 to $40,000. A Mercedes E-Class AWD wagon is $59,000. I'm looking at the sticker of an Audi A4 Quattro with a 6-cyl.: $37,960. And $40,000 to $50,000 is common on the bigger-engined “near luxury” models like the Jaguar S Type.

I even recall driving a $20,000 Ford Focus, and there was nothing fancy about the car.

The point is, cars and trucks are terribly expensive nowadays. The manufacturers try to fill the gaps at $20,000 with sporty SUVs like the new Saturn Vue, Suzuki XL7 and the coming Pontiac Vibe and Toyota Matrix, but the trend is still upscale.

It's too bad that prices are high, but there is nothing to be done about it. Yes, folks take advantage of bargains, and GM's 0% financing was the ultimate bargain. But it doesn't change the situation.

Technical advances are expensive: DOHC engines, electronic stability control, dual mode — no-clutch manual and automatic — transmissions, the audio systems, navigation systems. The costs of government regulation are huge: for emissions, fuel economy, safety and bumpers, air bags, tire-pressure monitors.

The costs of putting in systems the government doesn't demand yet but competition does: side air bags, keyless entry, lighted vanity mirrors. (If Bob Lutz put on lipstick three times a day, he wouldn't complain about lighted vanity mirrors.)

The cheap car is history. No one can build a cheap car for this country today.

The Koreans? They don't build cheap cars. They have a cheap currency that keeps the export prices down. The dollar is strong against the euro and the Japanese yen, allowing them to keep prices moderate and make more profit.

Often a German or Japanese car costs less here than it does in the home country.

This isn't going to change.

But this country has changed.

First, we're richer. Really richer: Even big-time journalists make $100,000 a year and more, and I mean newsprint people, not the TV anchors who get millions.

These well-to-do people want better cars and trucks. They want luxury and near-luxury and prestige. They are willing to pay; they don't want cheap stuff. If they need a car just for errands, there's a good used car off-lease.

Did you know that the PT Cruiser at $20,000 already outsells its Neon daddy at $15,000?

Despite this upscale shift, the market has soared, 17.4 million sales two years ago, 17 million last year. This year may fall to 15.5, but I believe the general trend won't be reversed: The prestige vehicles: Honda, Toyota, BMW, Mercedes maybe VW and Audi will do well in slow times. Collective sales of these makes are approaching 3 million a year.

If Detroit wants to come back, lower prices won't do it (despite the 0% financing). Prices must be competitive, yes. But what counts today is building vehicles with prestige. The best designs, the best interiors, the smoothest engines, the fastest speeds, the best brakes, the best paint.

In my lifetime, Detroit did build the best vehicles. Maybe, if they put their minds to it, and forget stockholder value (pushing up the price of the stock) and brand marketing (fooling buyers with advertising) it can happen again.

Best car wins.

Jerry Flint is a columnist for, and former senior editor of, Forbes magazine.

What Fools These Mortals Be

On Dec. 27, driving a Subaru Forester test car, I fell asleep at the wheel on a limited access highway with cruise control on 65. The day before I had driven seven hours in a Nissan Infiniti Q45. I drove that back to New York City (2 ½-hour drive) to exchange for the Forester. The night before I had taken a Benadryl plus two blood pressure pills. Driving back I was tired, but kept driving, passed out, hit the guard rail, a 150-ft. granite boulder, ran up an incline, wheeled and rolled down to the road. The Subaru should have rolled, but that all-wheel-drive stability held it. I should have died because of my own foolishness. A great Subaru died protecting me.

What Fools These Mortals Be.