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First in a series about the Detroit Three’s growing incursions in the California auto market.
California has emerged as a top target for some of the newest and most important vehicles in the Detroit Three’s product portfolio these days, and the Golden State has been returning the favor: General Motors, Ford and Chrysler have picked up notable shares of the California market lately. Now the Detroit Three are trying to make sure the state remains golden for them for years to come.
Ford has led the way by increasing Ford brand market share three years in a row, to more than 9 percent last year from 7 percent in 2008. Chevrolet boosted its California retail-market share for three years in a row, to more than 6 percent last year, and posted a nearly-6-percent share this year through May. Even Chrysler — whose efforts, one of its executives admitted last year, were “flipping terrible” there — has gotten up off the mat in California: After bottoming out at a less-than-4-percent share there in 2010, Chrysler boosted its take to nearly 5 percent last year and nearly 6 percent in this year’s first quarter.
These numbers remain far below national market shares for each auto maker. But their executives are focusing on the new direction they’re headed in California.
“It’s the biggest market in the U.S. but one where we’ve been under-performing for years compared with nationally,” Alan Batey, GM’s newly promoted vice president of U.S. sales and service after heading up Chevrolet sales for a few years, told me. “So the word that sums it up is ‘opportunity.’”
Jason Stoicevich, director of Chrysler’s California business center, said that the “edict came from the top on this that we have to do well” in California. “It’s a trend-setting state with a lot of early adopters, so our products need to take off.”
It’s been a half-century since the Beach Boys first sang about Chevrolets and since the free-wheeling image of big-finned domestic automobiles fit perfectly with the carefree, larger-than-life-style embodied by California — and the combination resonated with American culture at large. For 30 years, wave after wave of Japanese and then Korean imports landed on America’s nearest shore and pummeled the Detroit Three, making U.S.-based brands essentially irrelevant in the state that was always defining and redefining national tastes.
Superior Japanese engine technology and quality were the wedges at a time when California had to take the lead in boosting mileage and cutting emissions out of sheer self-preservation, and demanding West Coast consumers had no patience for poor manufacturing quality coming out of Detroit. An entertainment and news industry based in large part in Hollywood piled on the plight of Detroit brands by talking them down for decades.
The key in the recent significant shift back in a positive direction, of course, has been a stream of new products collectively offered by Detroit that Californians finally consider significantly worthy of their consideration again: the Chevrolet Cruze and Volt, for example; Ford Fiesta and Focus; Chrysler 300 and Fiat 500. They offer new takes from the Motor City on fuel economy, features, styling and quality.
“They’re good, quality cars and people seem to like them — they’re not the cheap econoboxes of old,” said Jessica Caldwell, senior U.S. industry analyst for Edmunds.com. “They carry lots more amenities, and that helps too. Californians are being surprised in a good way by these products, which will help [the Detroit Three] get on their radar even more.”
Source: www.forbes.com
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