Posted: 10/02/07 03:07 PM
Detroit’s products have changed. Whether you credit government intervention, consumer activism or foreign competition, there are no more rusting Vegas, exploding Pintos and 8-6-4 Cadillacs that can’t do math on the fly. As this website has pointed out on numerous occasions, product quality data says pretty much everything offered to American car buyers is mechanically reliable. Even if that salient fact hasn’t yet reached American consumer’s ears, reliability is not as important as it once was. Car choice often descends into pointless arguments over interior plastics, comparative depreciation and social acceptability.
This is why American manufacturers haven’t enjoyed the sales resurgence their new, improved products deserve: prejudice. American consumers share an irrational belief that American-made goods are inherently inferior to those produced by Japanese, German and even Korean manufacturers. A VW may find its way into the repair shop twice as often as a Chevrolet, but the German-branded car is still perceived as a higher quality product simply because it’s German.
A recent study by J.D. Power revealed that 80 percent of America's new car intenders won’t actively cross-shop either domestic or foreign, depending on their preference. While you can blame this horrific statistic on Detroit’s previous sins, it’s still a blanket condemnation of the Americans consumer’s idea of fair play. “You gotta put Mercury on your list,” the ad practically begs. And so it should be. Again, it may be unfashionable to suggest, but there is a penalty to pay for this blind bias against home-grown (or at least sold) products.
The United States is the only First World country projected to be substantially larger in population at the end of this century than it is today. The theory of comparative advantage says we should let our uncompetitive industries die. But of course, economists always neglect the human factor of politics. We have global responsibilities. We will continue to be a magnet for those with hope, and must accommodate an expanding, diverse population. We need a full-spectrum economy, not one divided between wealthy and struggling.