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Retailers, consumers and prices

Auto show-Consumer Reports analyst talks Toyota, other issues

January 13, 2010

toyota1Consumer Reports magazine’s senior director for automotive testing, Dave Champion, sat down with correspondents Bernie Woodall and Ben Klayman at the Detroit auto show to discuss the U.S. auto industry, including Toyota’s future, the changing nature of the show, small cars and Chrysler.

About Toyota:

“Toyota’s grown incredibly quickly; not only in the number of vehicles that they sell but also in the number of vehicles that they produce. They have a range of vehicles now that’s extremely wide. What Toyota used to have was a great attention to detail on every single part that went into the car and a real focus, very tightly, on the product. Now, with so many different variants and iterations and models, it was very difficult to keep that same focus and that same attention to detail on all the products.”

“The quality of the materials they’ve been using seems to have dropped off and the overall reliability of some of their cars has also not been the stellar (level) that it was in the past.”

“It comes from the top. Look what Alan Mulally’s done at Ford, very focused, one direction, everybody working in that direction. I think the recent changes at Toyota will bring that back, where they focus less on being the biggest, the best, the most stylish or whatever, going back more to their roots, ‘Let’s build something that people will want’ and that will be reliable and bring customers back year after year after year.” 
About the Detroit show:

“It’s a much quieter show and much more sensible show. Gone are the phenomenal, thousand-horsepower, biggest in class, best of this, concept vehicles that are just absolutely pie in the sky. This is a much more sensible show, really gearing to what people are going to buy.”

About small cars and gas prices:

“If gas prices stay low, it’s going to be quite difficult to sell a small car at a premium price. If a customer goes in to look at a (Ford) Focus (at) $19,500 or a low-line (Ford) Fusion 4-cylinder at $19,500, what are they going to buy? They’re going to get an extra maybe three or four miles per gallon overall out of the Focus or they can drive the bigger car, which looks more upscale in their garage.”

“Europe has a lot of downsides to having a big car. There’s nowhere to park it, the roads are smaller, the garages connected to the houses are so much smaller, the taxes are higher, it’s more of a pain. Here in the U.S., you can drive a Suburban and park it anywhere.”

“The quality of the small car is going to be paramount. When we look at small cars in the past, they’re really just econoboxes, noisy, uncomfortable … you really didn’t want to be in them. What we’re seeing now with some of these small cars is they’re very refined.”

About electric vehicles:

“It’s going to be a tough sell on electric vehicles.”

On what will drive consumer decisions:

“I think there’s going to be a lot more sensible decisions about what people buy in terms of reliability, fuel economy.”

About who will be winners in this market:

“The winners surprisingly in some ways are going to be Hyundai and Kia, good-value cars that offer a lot, their reliability has improved.”

About Chrysler:

“Chrysler’s got to weather a three-year storm of ever-diminishing sales until they get new product. The problem is their current product range is poor across the board.”

(Reuters photo of Toyota hybrid electric concept car)

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