For international automakers, selling cars in the U.S. is like an actress heading to Broadway: Either you make it here, or you go home penniless and strung out.
The U.S. market is enticing because it is so big,(second only to China) and so potentially profitable (we spend a lot of money on our wheels.) But we are also a picky crowd.
Japanese carmaker Suzuki announced earlier this week that it’s leaving the U.S. and putting its U.S. operations into Chapter 11 bankruptcy. The news came as a surprise to almost no one, because Suzuki’s cars haven’t fared well in the U.S. They do fine in Japan, China and India, but here they are underpowered, oddly marketed and come with a spotty safety record.
Here are some other brands, foreign and domestic, which, if they’re not careful, could also find they’ve bought a ticket to the U.S. auto industry graveyard.
The brand started in 1993 as a partnership between Daimler-Benz and the Swatch watch brand. It became a hit in Europe, where people don’t seem to mind driving around in sardine cans, especially in tight cities where parking places are scarce.
But here in the U.S., where people tend to drive on highways next to roaring 18-wheelers quite a bit, the smart brand has been slow to take off. Smart arrived in 2008, and we’re wondering if it will make it to 2015.
The automaker is trying to turn things around. Smart, operated by Mercedes-Benz, is working on a new line of cars, and attempting to convince Americans they don’t need as much space in their vehicles as they think with the marketing slogan, "Unbig. Uncar."
Sales perked up a bit this year, doubling from last year. But that’s just a tiny slice of the overall market: smart has only sold 8,309 vehicles in the U.S. this year, making up just 0.1 percent of the overall market.
Have you driven a Mitsubishi lately? No? Neither have we, or anyone else we know with a credit rating above..well...prison. Sales are down nearly 30-percent this year, and there's little hope for improvement.
After Suzuki leaves, Mitsubishi will be the smallest Japanese automaker in the U.S. But that doesn’t mean the company plans on leaving. "We have no intention whatsoever of withdrawing from the U.S. market," president Osamu Masuko told Automotive News after the Suzuki news broke. That every auto reporter covering the industry called Mitsubishi to ask is not a good sign.
Out of the six models Mitsubishi sells in the U.S., only one gets good reviews: The Lancer Evolution. Outside the U.S., Mitsubishi offers a number of models we never see here, so it is more competitive globally. But with some reviewers calling Mitsubishi's Galant sedan "quite simply the worst sedan money can buy," it's going to be a long time before Mitsubishi turns things around here.
The Scion brand was born out of Toyota's need to get some younger buyers into its cars. The brand was meant to be inexpensive, hip, and fun to drive.
Some of its cars are fun to drive. And they’re also affordable, if you have a job and can swing paying $16,000 to $24,000 for a car. But given that college grads make up a big chunk of the unemployed, that may be asking too much.
And figuring out if the cars are really "hip," as the marketing wants us to believe, is a conundrum. A lot of people liked the boxy styles of the early xD, but a lot of those people were moms and Baby Boomers--the exact opposite group of people Toyota was attempting to attract. Nothing says unhip more clearly that your Mom driving the car you are supposed to think is cool.
Sales peaked in 2006 at around 173,000 vehicles sold, and are down now to 62,377 year to date. In a head-scratching move, Scion has paired up with heavy metal artists to try to market its new cars.
After all, who is likely to be at the Led Zeppelin or Kiss reunion concerts--the Scion target's folks.
At one point, Ford Motor Co. had a separate division for its luxury brands, which included Land Rover, Jaguar and Volvo. The Lincoln brand became a low priority as the automaker poured money into the elite brands trying to make them work. Seriously, Fiord execs had given up on the idea of Lincolns ever competing against BMW, Mercedes and Lexus.
But now Ford is down to just two brands: Ford and Lincoln. Lincoln is like the last surviving son to take over the family business after all the other smarter and more promising kids went onto other careers.
Lincoln is struggling. How much? Ford has sold more Econoline vans so far this year than the entire Lincoln brand has sold (81,000 Econoline vans versus 69,000 Lincoln brand).
Ford is working hard to improve Lincoln's image as a premium brand. The automaker recently opened a Lincoln-centric design center where designers will work solely on Lincoln vehicles (and the fact they hadn't had one of these before might be part of the problem.) The new Lincoln MKZ looks classy and handles well, and could get some folks interested in the brand again.
There is a new head of Lincoln at Ford after years of trying to run it by committee. It has a new ad agency. But it's going to be a long uphill battle to get consumers under age-60 to seriously consider the brand named after an assassinated President.
“I think we have a wonderful opportunity to rewrite the story for Lincoln,” Mark Fields, Ford’s chief operating officer, recently told AOL Autos.
Time will tell.
This Californian hybrid plug-in car maker has some celebrity street cred, with Justin Bieber owning a shiny chrome Fisker Karma that the paparazzi love to photograph.
But the company also has a host of problems. The Department of Energy had promised Fisker it would give them $529 million in loans, but then froze the loans after Fisker had taken $200 million, saying the automaker had failed to meet some milestones set in the loan agreement.
Then the company had to conduct a costly recall to fix a cooling fan after two of its Karma cars caught fire. That was the third recall in nine months.
And most recently, the automaker lost 300 Karma plug-ins, valued at around $100,000 each, in Hurricane Sandy while parked at the PortNewark in New Jersey. The company was insured, but it’s another challenge the automaker didn't need in an already troublesome year.
The jury is very much out on extended-range plug-in cars like Fisker, Chevy Volt, the new Ford C-Max Energi. But getting already skeptical consumers to take a flyer on them with an unknown company seems like a real reach to us.
In odd it-only-makes-sense-on-Wall-Street news, shares of electric carmaker Tesla recently went up after it reported a dismal third quarter. It had a net loss of $110 million that quarter, bringing its year-to-date net loss to $306.2 million.
But those losses were less than what Wall Street analysts predicted, so traders bought more shares. Go figure. Given that, we can start to really understand how Wall Street sunk us into financial ruin in 2008.
Tesla does show some promise. Its new Model S sedan appears to be selling well. The automaker plans to ramp up production to make 400 per week in December, which is a lot for the startup company and way up from the 100 a week it produced in September. People seem to like the cars, and they don't seem to catch on fire like the Fisker cars.
But how long can one company go losing hundreds of millions of dollars in a year? The smart money says founder Elon Musk doesn;t care that much any more, and figures either Toyota or Mercedes-Benz will buy the company's technology out when things get too financially dicey.
It also may be time for Musk to go focus on his other hobby, heading into space.