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The Price Is Right

Thu, 04/29/2010 - 9:36am
by Amanda Earing, News Editor, Manufacturing.Net

I’m the proud owner of a 2010 Honda CR-V.  I bought the car back in December—before Toyota’s problems had surfaced. When Toyota’s issues came to light a month later, I was even happier with my choice.

But every now and then, I feel some guilt.

See, I grew up in a rural town where every vehicle was American made. But over the years, U.S. automakers started letting me down, and I shifted my focus to vehicles with better reliability ratings—and a price that fit my budget.

But when I bought my Honda, I did ask the dealer for one request: Could I get the car from a U.S. factory?

I might have been hesitant to buy a car from a U.S. manufacturer, but I still wanted to support American jobs—even if the company itself was foreign. Quality and safety reports were only just starting to improve for domestic automakers, and I wasn’t quite there yet in my belief they were getting the job done.

But in the last few months, I’ve been wondering if I made the right choice. As gas prices continued to rise, I asked myself why I didn’t go for a more fuel-efficient SUV from an American manufacturer. The answer: They were out of my price range.

And that’s where U.S. automakers just might be falling short.

As the economy recovers consumers need affordable, fuel efficient cars—and as of right now, those vehicles are few and far between.

As more consumers regain their shaky financial footing, will they really be willing to pay more for an alternative-fuel car that costs more than its gasoline counterpart?

U.S. vehicle manufacturers seem to have a lot to celebrate lately as plenty of reports indicate they are gearing up for a turnaround. The signs are there, but is it really what it seems?

  • GM recently repaid its $8.1 billion in loans from the U.S. and Canadian governments and plans to invest $257 million to expand production at plants in Kansas and Michigan. But is there really enough demand for their vehicles?
  • Ford reported sales jumped 37 percent in the first thee months of this year—more than double the industry increase of 15 percent. But how much of this was due to Toyota’s bad luck and managing to avoid government loans? They can’t ride on Toyota’s ill fate forever.
  • Chrysler improved its net loss from a year earlier, citing cost cuts, new pricing and manufacturing efficiency. But they are still struggling and their make-or-break vehicle happens to be an SUV—a choice many experts question as fuel prices continue rising.
  • An AP poll shows Americans are steadily gaining confidence in the quality of American-made vehicles, with more saying U.S. autos are better made than vehicles from Asian countries. But quality only won’t revive the Big Three.

I want to believe the Big Three are ready for a comeback, but like all manufacturers, the global market will bring more challenges than solutions.

It’s expected that we will see more foreign automakers enter the U.S. in the next few years. Ford, General Motors and Chrysler will have to step up their game to stay competitive—and make sure the price is right.

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