LAST MONTH MARKED THE 23RD YEAR I'VE WRITTEN this column. Before that, my column appeared in the NADA magazine for five years. I have served under three publishers and as many editors.
My current editor, Steve Finlay, requested I write this month on significant changes in vehicle marketing I've seen as a new-car dealer, an NADA director, and an auto columnist.
The most dramatic changes in the U.S. retail automobile marketplace during the past quarter-century have been:
The tremendous growth of light-duty truck sales among American consumers.
The infiltration of Japanese vehicles into the U.S. marketplace.
The reason for the increase in light truck sales appears to be mainly price. Passenger vehicles have become so expensive, consumers looking for basic relatively inexpensive transportation have turned to trucks to satisfy basic transportation needs.
In response to this market niche, auto manufacturers added exciting design and performance options that further attracted buyers. Also, consumer desire for these vehicles increased with the addition of increased passenger capacity in extended cabs and four-door models.
In some cases, first car purchases for family teenagers have been pick-up trucks replacing high-mileage used cars.
Time was, “Made in Japan” meant poor quality and shoddy products. How that has changed!
American consumers were turned on to Japanese vehicles by a set of circumstances beyond any traditional marketing strategy. It happened this way:
In 1973, the OPEC nations restricted oil shipments to the U.S. creating an embargo which seriously threatened the use of gas-guzzling full-size cars.
Fuel efficient Japanese cars had not captured much of volume among American buyers. In fact, thousands of unsold Japanese fuel-efficient cars were sitting on the docks waiting for owners. American consumers, dealers, and automakers did not take this embargo very seriously. They were still enamored with the gas-guzzlers.
In 1979 the Iranians turned off the oil spigot. Gas shortages hit America like feathers blown into a fan! There was panic among fuel-deficient car owners as consumers formed long lines at gas stations, especially in the Northeastern U.S.
The term, “gas guzzler” became a synonym for negative patriotism among all Americans.
Domestic automakers had minimal success designing and marketing fuel efficiency in their products. Suddenly, heretofore unsold Japanese vehicles became more attractive to gasoline-starved Americans car owners. Owners of full-size domestic vehicles began shopping for fuel-efficient compact cars.
In the process, they discovered Japanese quality was a reality, and that the theories of W. Edwards Deming, the American quality guru, paid big dividends among Japanese automobile manufacturers.
Deming had earlier made countless quality proposals to American auto manufacturers. But they were not interested in sacrificing the highly profitable full-size cars for less profitable compacts that would have addressed America's gas shortage of the time.
Another reason for Japan's successful entry into the U.S. automobile market was their attitude toward the domestic dealers.
Domestic manufacturers had not treated their dealers with much fairness or respect. General Motors prevented dealers from significantly marketing any of the GM compacts. These dealers enthusiastically sought out Japanese compact nameplates to compete in the fuel-starved marketplace.
Dealers who signed on with Japanese manufacturers were pleasantly surprised at the respectful treatment and courtesy they were accorded by the Japanesemanagement and staff.
Currently the most valued dealer franchises in the U.S. are Japanese: Toyota, Honda, and Lexus.
Domestic manufacturers have done a reasonably good job in addressing the current oil and gas shortages. However, Japanese imports are still leading the fuel conservation pack by a substantial margin.
After a half century as a new car and truck dealer I can attest to the dramatic improved changes in factory/dealer relations.
Several of these improvements were the result of franchise protective governmental regulations. However, the Japanese presence in the industry was certainly responsible for much of the domestic manufacturers' improved behavior toward their dealers.
Nat Shulman was owner of Best Chevrolet in Hingham, MA for many years.