American-Made Cars Continue to Rise in Value
In these tough economic times, the share of the American car market held by foreign manufacturers has taken on a sense of national urgency. Foreign firms hold 36% of the American new car market, because consumers have increasingly decided they offer the best buys.
But Detroit’s Big Three are clearly getting better, according to several respected surveys.
The surveys, by J. D. Powers and IntelliChoice, show that American car producers have sharply narrowed the gap in value and quality, although public perception has not yet caught up.
The IntelliChoice 1992 “Best Value” ratings, published earlier this month by the San Jose company, showed that cars produced by American manufacturers won more of the best value spots than ever before. American cars are now rated by IntelliChoice among the best values in virtually every market segment.
Moreover, the most recent issue of the Power Report, published by the market research firm J. D. Power, says domestic models produced by Ford, Chevrolet, Dodge, Buick and Oldsmobile “showed healthy improvement” in Power’s consumer satisfaction index in 1991, compared to the year earlier. Among Japanese producers, only Honda showed an increase in consumer satisfaction, while Nissan, Mazda and Mitsubishi declined. Toyota was unchanged.
The IntelliChoice survey found that even among low-cost compact cars, the Dodge Dynasty was rated a best value, along with the Acura Integra, the Toyota Camry and the Mazda 626.
The large car field was swept by Big Three cars: the Mercury Grand Marquis, the Ford Crown Victoria and the Buick Le Sabre/Oldsmobile 88 Royal. Big Three cars also swept the field in passenger vans, a category in which Toyota, Mazda and other foreign firms compete.
Almost every car buyer is familiar with the legendary value of the Toyota Camry. But the IntelliChoice rating found that the Ford Taurus has virtually the same five-year cost as a Camry. The Camry, equipped with a six-cylinder engine, has a projected five-year cost of $26,632, and the Taurus’ projected cost is $26,650.
Unlike other ratings, particularly the Consumer Reports quality rating, IntelliChoice rates cars on seven factors: depreciation, insurance, financing, taxes and fees, fuel, maintenance and repairs. The firm publishes cost data in its Complete Car Cost Guide. (The $39 book can be ordered by calling (800) CAR-BOOK.)
Although most consumers consider repairs to be their most important consideration in choosing a new car, the cost of repairs is the least important part of car ownership over a five-year period.
IntelliChoice estimates repair costs by using data from insurance firms that sell extended service contracts through dealerships. One interesting note: the car with the worst repair record was Jaguar, IntelliChoice said.
Although Big Three cars don’t always perform best in the repair category, they perform fairly well, and they perform even better in such key areas as low insurance rates and good fuel economy, said Peter Levy, president of IntelliChoice.
In the past, ratings on American cars have been dragged down by higher depreciation than foreign competition, a result of poor resale value. As American consumers “feel better” about American cars, they will tend to retain their value, Levy said. Also, American cars values tend to be depressed by fleet sales from auto rental companies.
So what’s the point? The Big Three has come a long way, though admittedly the American producers must go much further to regain the confidence Americans who now buy from foreign producers. Even though the Big Three had a record number of entries in the IntelliChoice survey, 62% of best buys were foreign-made. Even though the progress is good, the overall rating still leaves a lot to be desired.
Vartabedian cannot answer mail personally but will attempt to respond in this column to automotive questions of general interest. Do not telephone. Write to Your Wheels, Times Mirror Square, Los Angeles, CA. 90053.
