For Chinese imports, it boils down to quality

[tgagneguam]

Perhaps this is not the appropriate forum to post this, but I wonder if someone who subscribes to Automotive News could post a copy of at least part of Edward Lapham's most recent daily commentary in which he waxes poetic about the impact of the Chinese automakers coming to the US. He seems to suggest, at least in the part to which I had access, that the US automakers may not be the only ones to suffer share losses; it would appear someone has provided objective data to support that the Asian automakers may suffer, too. That's a theory I subscribe, too, so I'd like to read his perspective.

Can anyone oblige with a copy? It'd be much appreciated.

[ricers-shaft-big3]

EDWARD LAPHAM COMMENTARY 10/26/2005: For Chinese imports, it boils down to quality


By Edward Lapham
Automotive News / October 24, 2005

All of the talk about Chinese vehicles eventually coming to the United States makes you wonder whose lunch the Chinese automakers are going to eat.

To some, it's a foregone conclusion that General Motors, Ford Motor Co. and the Chrysler group will be the hapless victims of yet another Asian invasion, like sick moose stalked by a pack of wolves.

But that's not necessarily true, according to a fresh survey by CNW Marketing Research Inc., of Bandon, Ore.

CNW measured consumer willingness to consider a Chinese vehicle based on several variables, including vehicle type, size, quality and whether the shopper intended to buy a North American nameplate or an Asian nameplate.

Assuming comparable quality, 20 percent of consumers who intend to buy a GM, Ford or Chrysler small car said they would consider a Chinese vehicle, while 51 percent of consumers who plan to buy a Japanese- or Korean-brand small car might go for Chinese instead.

In general, consumers were more willing to consider a Chinese vehicle when it was assumed quality would be on a par with other cars and trucks. Likewise, the smaller and less expensive a vehicle the consumer intended to buy, the more likely he or she was to consider a Chinese alternative.

There was one anomaly: Though less than 1 percent of those who said they intended to buy a Big 3 pickup would consider a Chinese alternative, 38 percent of those looking at Asian pickups would shop Chinese trucks, too. That was a higher percentage than any segment except small cars.

This is one instance where brand nationality could work against Toyota, Honda, Nissan, Hyundai and other Asian producers.

As CNW President Art Spinella puts it, Americans aren't real sure where China starts and Japan or Thailand or Korea ends.

Spinella says Japan showed that Asians build good cars and the Koreans proved it. So, logically, the Chinese also will build good stuff. After all, that toaster on the counter was made in China and it doesn't burn the bread.

Maybe the wolves don't have a taste for moose after all.

You may e-mail Edward Lapham at elapham@crain.com

[01cavalier]

Shows how american car buyers are more loyal than those buying japanese cars...

[DuSpinnst]

No it shows that many people who buy Japanese and Korean cars have absolutly no brand loyalty. Which we knew anyway, many of the Japanese car buyers jumped to Korean cars when they came out here.

[tgagneguam]

Thank you, ricers-shaft-big3.

[tgagneguam]

Interesting perspective, and I'm anxious to see how the Chinese entry into this country plays out, though I still think that Detroit should take the Chinese [automakers] quite seriously.

Assuming comparable quality, 20 percent of consumers who intend to buy a GM, Ford or Chrysler small car said they would consider a Chinese vehicle, while 51 percent of consumers who plan to buy a Japanese- or Korean-brand small car might go for Chinese instead.

As CNW President Art Spinella puts it, Americans aren't real sure where China starts and Japan or Thailand or Korea ends.

This is rich... I suppose this is one benefit of the failure of the American education system.

[ricers-shaft-big3]

does it also show that import buyers choose with their "head" rather than with their "heart"? ie make what they perceive are logical decisions about quality, price and performance rather than just a love affair with the brand.

as an aside if you hired someone to do job for you-lets say build a substantial part of your house for ahuge amount of money who would you choose-someone who chose material and product which in his considered opinion were the best in terms of price-quality-performance for your needs or someone who chose his favourite brand of products, merely because he loved the particular company?

[mgescuro]

Originally Posted by ricers-shaft-big3

Assuming comparable quality, 20 percent of consumers who intend to buy a GM, Ford or Chrysler small car said they would consider a Chinese vehicle, while 51 percent of consumers who plan to buy a Japanese- or Korean-brand small car might go for Chinese instead.

In general, consumers were more willing to consider a Chinese vehicle when it was assumed quality would be on a par with other cars and trucks. Likewise, the smaller and less expensive a vehicle the consumer intended to buy, the more likely he or she was to consider a Chinese alternative.

I find that very interesting. That would be, ceteris paribus, an AMerican consumer woudl be more likely to choose a Chinese car over a comparable Japanese/Korean car?
That would assume brand loyalty to the Japanese nameplates is very low; whereas, the total opposite holds true for the American nameplates. This would potentially also mean that if AMerican actually made BETTER cars and changed their perceptions of their own cars, they would be able to gain conquest buyers.
Also means that the more price sensitive the consumer is, the less hold a Japanese nameplate holds.... ceteris paribus.

Of course, not everything is equal. And the Japanese have a stranglehold in teh quality perception arena.

Only time will tell.