By E. Layton Dorey
Recently I spent some time with a friend’s four year old Mitsubishi Galant. This poor car has not had an easy time of it. Not only has it accumulated more that 165,000 miles in its four years, it has had “altercations” with snow plows, one or two other vehicles and myriad potholes of a severity sufficient to dislodge wheel covers.
I was surprised to find that, even in its “depreciated” condition, it still drives pretty much as it did when it was new. I recall how it drove when new because I had recommended this particular vehicle to my friend, and had accompanied him while shopping for a car (and test driving various makes).
Many will be aware that these are dark days for Mitsubishi. The Japanese parent has been plagued with scandals, and here in the U.S. the company has experienced a dramatic sales decline over the past 18 months. Their financial services division is only just showing signs of recovery after a spate of underperforming loans.
This car, however, is a testament to quality. My own “premium brand” vehicles, with fewer than 50,000 miles, have experienced recurring quality issues and do not convince me that they will hold together the way this Galant has. I even have one (German) car – still brand new with less than 5,000 miles – that already has a little squeak from the dashboard area.
Now, I don’t want this column to be seen as an endorsement of every Mitsubishi, or every high mileage older Galant (or even this one car, in case my friend decides to sell it). The experience did serve, however, to make me question “value” (maybe because at the time so many politicians were questioning my “values”!?!).
From a cost of ownership perspective, this Galant has already achieved a dollar per mile rating that is hard to beat. Nothing has needed repair or replacement outside of accident repair (which would have been incurred with any car) and regular maintenance/ service. Amortizing the depreciation only over the mileage yields a figure of about $0.12 per mile. Allowing for fuel, maintenance and depreciation, my friend has incurred driving costs of about $0.18 per mile! This is a staggeringly low number.
I think this illustrates a leading reason that U.S. auto sales are in the doldrums. Cars just don’t wear out like they used to (we can thank Honda and Toyota for dragging others up to their standards) but perhaps more to the point, there’s been a dearth of exciting new product.
We’ve heard several (domestic) automakers say things like “this will be our year of the car” to highlight their belief that exciting new product is coming out of their factories. It doesn’t seem to wash with the market, however.
When your current vehicle is still running fine, when the president is turning the economy into a total mess (Congress just voted to raise the debt ceiling!) making you unsure of your own economic future and when there’s nothing “to die for” that’s new – why trade in your current vehicle?
Many people cannot tell the difference between one make of car and another on a quick glimpse. The basic shape and format of a typical sedan hasn’t really changed much, and SUV’s are “old hat” now. What’s new and exciting?
The answer to the sagging auto market is to create a reason for people to want something new. Few automakers, however, seem to be getting it “right.”
For many who treat their vehicle as a “transportation appliance” there just isn’t the need or desire to change. Even what seemed like fantastic incentives – thousands of dollars in rebates, free financing or both – get old.
Financing deals are like the B.S. “false issues” that Karl Rove used to re-install his idiot friends. They can distract for a while, but they are only ever an unsubstantive distraction, and don’t diminish the weight of the real issues.
The auto industry justifiably receives a lot of credit for saving the economy from a potential collapse after 9/11 (when “0% financing” was launched and boosted consumer spending dramatically). Now they need to focus on what really matters – making exciting product. Think outside the box – the MINI is one of the few cars that is really “hot.”
Perhaps this will be the ultimate downfall of the “neo-con” trend. Boring doesn’t sell – in the long run (though as Cadillac has demonstrated with its Escalade, tacky seems to do quite well).