Filed under: Plants/Manufacturing, Celebrities
Jay Leno tells Detroit to make better cars
"It ain't that hard folks -- make better cars." That's the word aimed at Detroit from Jay Leno, the late-night television host and avid hands-on car nut. According to Leno, nobody builds trucks as well as Americans, as he cites the Ford F-150 and Chevy Silverado as examples. Same goes with performance cars. "The Corvette Z06 has 505 horsepower, comes with a big warranty, and can hit 200 miles per hour. It weighs almost exactly the same as a half-million-dollar Porsche Carrera GT and gets higher mileage - 26 miles per gallon," states Leno.
However, Americans just can't seem to build a low-bucks economy car. "In order to make the more expensive car more appealing, U.S. companies feel as though they have to dumb down the cheaper car," the comedian reasons. "When you get into a high-priced, well-made American car today and the key is in the ignition, you hear a melodic bong, bong. But when you get in a cheap American car, like a rental, and the key is left in, it goes plink, plink, plink. It's just horrible. Every time you use the turn signal, it's like breaking a chicken leg."
Leno suggests that Detroit follow the example of Harley-Davidson, which turned around its quality-control problems and re-established itself as a market leader. Leno adds, "I believe that, all things being equal, Americans will buy American. It just has to be as good as the competition; it doesn't have to be better."
[Source: MSNBC]
Reader Comments (Page 1 of 8)
WC 7:12PM (5/24/2008)
Not a fan, but Leno is right. But why? Because American business executives still use cost accounting methods to determine what to build. They therefore falsely believe that smaller cars are not as profitable as bigger ones. We have imbeciles running the country and our corporations for at least the last 15 years or more.
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Dave 7:25PM (5/24/2008)
Smaller cars generally arent very profitable.
Toyota never made much money on Tercels or Echos or Scion Xa's and Scion Xbs. They make big money on Lexus's, pickups, and SUVs. And they make a decent profit on Camrys, no doubt. Note that the Xa and Xb have been replaced by larger cars that get much worse gas mileage.
Even Honda is trying to get into the big vehicle market with the Pilot and the Ridgeline. And today's Civic is far bigger than the Accord of a few years back.
With gas prices going up, small cars will get more profitable, but GM, Ford, and ChryCo will sorely miss SUV and full size pickup profit margins. So will Toyota, Honda, and Nissan.
BTW - I drive a 95 Miata, which is smaller than any car you can buy in the USA today. I'm just stating financial reality.
sw 11:58PM (5/24/2008)
Holy cow Dave. As of 2007 Toyota had sold 30 million corolla's. I don't have the numbers for the Honda Civic but I'm sure it's close. The Mazda 3 seems to have revived Mazda. I'm sure the Sentra's been a big seller for Nissan.
There isn't much of a markup on smaller cars but the manufacturers will make up the profit based on the number of units sold. I don't know for sure about other manufacturers but cars like the Corolla and Tercel were the cars that financially made Toyota, which is now the most profitable car company out there.
hydrogenvodka 12:48AM (5/25/2008)
@ dave
Businesswise, all car markets have to be similarly profitable, at least on the margin. Couldn't say the same about high-end car markets such as sportscars and exotica, where relevant economic phenomena arise (such as Veblen and Giffen demands) that exceed general rules of investment and profit.
You absolutely couldn't back the argument of cheaper cars being less profitable. In fact, see FIAT or Nissan as good examples of the exact opposite.
Dave 1:57AM (5/25/2008)
@hydrogenvodka
Are you braindead?
Nissan almost went bankrupt and was bought out by Renault.
Fiat has long since abandoned the idea of selling cars in the USA because they can't do it profitably.
Dave 1:59AM (5/25/2008)
@sw-
The Civic is no longer a small car.
Tool 3:22AM (5/25/2008)
The interesting thing is that Jay Leno has taken (or earned) a lot of money in endorsements and personal appearances on behalf of automakers.
To say "It ain't that hard folks -- make better cars." Says a lot about his personality, which by most accounts is passive aggressive. I guess we're seeing that here.
WC 6:25AM (5/25/2008)
There are many car companies that are profitable selling small cars. Notice the key difference in thinking. Americans think markup of small cars is small and therefore wanted to sell primarily big cars. That is cost accounting. However, the Japanese threw cost accounting out the window and said instead how can we make overall profit selling small cars, forgot about individual markup per product, but at the bottom line level of all profit made. It is a fine distinction that changes anything. Has anyone read "The Goal".
No offense Dave, but Nissan almost went bankrupt not because of small cars. And the fact that the Civic is technically as big as the old midsize just goes to show how efficient car makers are getting at selling small cars.
America can make a good small car, we just got to change our thinking about them. They are not bad, and they are not unprofitable!!
User 12:26PM (5/25/2008)
@Dave,
Check your facts... The Scion Xb sales fell when they released the bigger version.
Small cars are highly profitable, especially now. Microeconomic theory aside, look at where the market is heading.
Nissan's troubles in the late 90's has little to do with the classification of the products they were selling. Nissan almost went bankrupt because they had problems establishing their brand overseas (beyond Japan), were facing troubles due to the extremely slow growth in the Japanese economy during that time period, and were selling products that were of low quality. (Note that if you change the word "overseas" to "domestically", "Japan" to the good old "USA," and "Nissan" to "The Big 3" you pretty much have the story above us.)
The question is not "do we produce small vehicles or not?" Yes, the Big 3 must produce small vehicles. It's so clear that someone who knows where gas prices are heading and knows nothing about the auto industry should be able to determine that. The thing is that the Big 3 should learn from Mercedes' mistake with trying to establish the C-class as a heavy competitor to the 3 series and IS... When you make an entry-level car you don't have to dumb down the engine, use awful cheap materials, and dumb down the design. They shouldn't fear cannibalism so much. To simplify things and in a monochromatic world their choices are clear: Fear that the small cars are going to cannibalize their more expensive cars (which aren't selling well enough at all), or don't fear cannibalism and sell high quality small cars in bulk.
It's foolish to stand by the auto companies on this. They aren't facing a massive lose-lose situation. C'mon, people... We live in the United States of America. Of course we can get this right. If we can lead the world in the most complex medical sciences and in technological breakthrough, we can definitely lead in the auto industry. Perhaps we just need different, less established, domestic companies to enter the market. But perhaps the Big 3 can just get things going right.
blah 3:17PM (5/25/2008)
Contrary to what you think, the Americans do not lead in the most complex medical sciences and technologies. The medical field is not clearly divided into countries, its a world phenomenon, the Europeans and Asians contribute a lot to medical sciences, even Cananda contributes a lot, in fact if you do a research to population ratio, Canada's is much higher. As for technological breakthroughs, sadly, those occur less and less in the states nowadays, Japan and Taiwan is stealing a lot of the limelight.
REALITYCHECK 7:52PM (5/25/2008)
Both Ford and GM have been meeting or beating the competition with the last generation of cars! I say he should have said this 5 years ago and not now when they seem to have turned the corner. What I really think is he wants the fifth gear job and this is his way of showing that he will say whatever it takes to get the job, either right or wrong.
MikeW 9:10PM (5/25/2008)
The Accord hasn't been as small as the civic any time in the last fifteen years.
More like twenty years ago.
Rocketboy 2:31PM (5/26/2008)
@Dave... "maller cars generally arent very profitable" ya, boy that BMW is sure taking a loss on MINI..
Oh wait, they're not... The whole freakin line is very profitable... why? Becaue it's not a dumbed down small car.
Max Fun 4:39AM (5/27/2008)
@Dave,
For a manufacturer that specializes in making small cars, is it any wonder that Fiat doesn't sell well in the US?
In case you don't know this, but the maker of the humble 500 and cute Pandas own Alfa Romeo, Meserati and Ferrari.
ugg.tryptophan 7:14PM (5/24/2008)
amen, mr.leno, amen
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Johnny 7:14PM (5/24/2008)
Yes Yes Yes. I know. All the fanbois will says Detroit is maijg better cars. And I DO AGREE with that assumption. I do think they are 5 times better than 10 years ago.
But believe me they shouldnt just catch up to everyone else, they should pass them and be leaders. Why not? US makes the best planes in Boeing. Best crafts like NASA and so on. Best computers like Intel and AMD. Best of so many things but not cars. I dont know why it was like that for 40 years. Upto 1955-1960 we were great then the bottom fell out of detroit. Innovation ended and now finaly its coming back.
There is no excuse to make a craptastic V6 in the Fseries, RAM and Silverado to push people into the V8s. I would love to get the 4.2 straight 6 in a Silverado. Puts out 291 in the Envoy and can be tuned to an even 300. Thats great. But no, I have to either get the crap 190hp 4.3 from 30 years ago or move into the big engines.
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Dan 12:16AM (5/25/2008)
The reason those ancient sixes are still sold as base engines is because fleets want them.
When you have a service department trained and experienced in keeping one drivetrain going, and baselines for part replacement, and a warehouse full of parts, throwing all that away to get better throttle response for some employee whose job isn't 'enjoy driving' doesn't make sense.
Justin 1:47AM (5/25/2008)
Johnny what are you talking about? The 4.2 atlas 6 is as big as a small black 5.3 that you're saying is too big. And it puts out less power and torque than the 5.3. And it gets the same mileage (aka in the Trailblazer).
If you don't want to move up to a small block, why would you want to move up to a big atlas motor?
MikeW 9:22PM (5/25/2008)
GM could easily get 300hp from their inline6. (variable intake valve timing, bigger pistons from I4/5 4.4 liters 300hp, 300ft-lbs)
Or GM could make a new V6 derived from the LS3. A 4.6 liter V6, add VCT 330hp on regular.
Where is the 6 speed automatic for the half-ton, 1500, 6L50?
Heck for fleets, GM could install their inline 5 cylinder engine. 250hp 250ft-lbs & a 6 speed automatic would be very capable
Matt 7:17PM (5/24/2008)
yes, finally, its about time someone needs to be capt. obvious... American automakers just dont get it.
i'm american myself, and love to support america, but i just couldnt stand the products that the american auto companies were making, so what did i do? i bought an american made japanese car: Subaru Legacy GT, and i'm still probably supporting more of america than i would have if i bought an "american" car
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