It’s a well reasoned argument, but if it were true, the Japanese (and Koreans) wouldn’t be lobbying to prevent the CAFE increases as well as the Americans. Hell, they’d be all for it. They’re not stupid; they realize that the Americans have equaled them in quality, have equaled them in fuel economy (not CAFE, but apples-apples), and need to be free to compete on design alone. Tying their hands to micro-cars for the US market scares them just as much as it scare the American manufacturers.
Would it be true to say that in Continental Europe cars are regarded as a vital national industry and benefit from government intervention and patriotic customers to keep their profits up, instead of such things as a more reliable product?
This is my obsevation as well (several of my customers are Japanese manufactuers). As an example, Nissan makes cars in North America and imports cars into North America from Japan. The imported ones are badged as Infiniti and are a class above the US brand in quality and accessories. There is a marked differance in customer perception of quality between the two brands in North America. In Japan, they don’t bother to use the Infiniti brand because the name Nissan is recoginized as a high quality product.
When I have meetings with Japanese engineers it is quite different than meeting with their US counterparts. The Japanese engineers stick by the book at every step of the way, even when it is obvious that they could bypass a step because we have done this before on other programs. I would say that 98% of the time this results in extra BS work that could have been negotiated out with a US based engineer. The thing is 2% of the time they catch something that may have been missed before. In their minds it’s that 2% that makes the differance in quality between the two brands.
A co-worker and I were discussing buying new cars last week. We both agreed that the new Altima 2 door coupe was sweet ride and that we would both most likely be getting one. Then we both admitted that we would prefer to get a G35 coupe (or wait for the G37) but could not afford the upgrade in price and quality. 
Well, Buick tied for the top spot in the latest J.D. Power quality survey.
At the end of the day though, you’d still be driving a Buick, the epitome of senescent fat-assed dullness.
The majority of American cars continue to look badly and/or non-creatively designed. If U.S. carmakers can fix that, they’ll have it made.
In the case of GM and Ford, they do have well-designed vehicles … for the European and Australian markets. Why not North America? Why do the marketing executives think the Ford Fusion would better appeal to American buyers than the Ford Mondeo?
Another possible factor, at least back when Japanese cars were being built in Japan, was the tax code there. From what I understand, the tax rate on corporate profits is extremely high (higher than the tax rate for personal income), so it’s not greatly to a company’s advantage to show high profits at the end of the year. For this reason, many manufacturers will reinvest their annual profits by buying new equipment (thus eliminating their taxable income), which leads to a lot of factories having nothing but the most cutting-edge technology, even though on paper it looks like they’re just barely breaking even.
I wholeheartedly approve of this practice, since I work in a company that doesn’t rely on expensive machinery. All our profits, therefore, have to be eliminated by giving everyone year-end bonuses ;).
It so happens that a Ford Mondeo was my company car while launching the Ford Fusion. Trust me, the Fusion is the superior of the two. The Mondeo was tiny little econobox by American standards. You couldn’t push the little European-style V6 to do much of anything other than whine at you – even the I4 automatic Fusion was quicker. It felt cramped; you could feel every little bump (granted, Mexican roads, but we went to Lake Tahoe in it on US roads). I spend a year hating that fucking little car, but at least feeling good that I wasn’t one of the schlubs assigned a Focus (and having since driven many Focuses, regretting that I didn’t).
In my loathing for that POS, I actually found out that it was a very highly regarded car in Europe and renowned for its spaciousness, good drivability, and other characteristics! Just goes to show that different markets really, really do have completely different expectations!
I spent most of last year driving a Zephyr (basically the same drive train as a Fusion, and exactly the same size). I loved that car, and the day my Continental finally dies I’ll probably pick one up. They’re called the MKZ now with the added benefit of an extra 0.5L of displacement, they’re bound to be even more fun.
We mustn’t forget that the real bane of the US auto industry isn’t bad design or lack of acceptance – after all they collectively own 50% of the US market, and it takes at least 10 others manufacuters to meet the other 50%. The problem is they’re big and bloated, and can’t support themselves on their “fair share” (let’s say proportional share) of the US market, and have to right size themselves. You can see that this has been GM’s and Ford’s strategy of late – bring their capacity in line with their demand rather than artificially increase demand (rebates, fire sales) to meet their production capacity. This results in obvious market share decline, but it will boost net margins significantly, which is really more important. Kind of like Apple being quite profitable with only 5% of the PC market.
One reason the expectations are differant between US and European drivers is the type of roads.
Over here, its something of an old truism that US cars can’t do corners, they go all sloppy and wallowy.
We need cars that can pull into small gaps fast, manooevarable, can take corners, high gas mileage.
We want cars that can handle, brake well.
The stereotypical US car would be seen by most Euorpeans as an old bus, whose size is simply unsuitable for our roads, towns, car parks etc.
The quality of the interiors of US cars tends to be cheap and tacky, the plastics flimsy, which is fine in a market that has high turnover, but in Europeland we tend to keep out cars much longer, and cars hold their value for longer, so it isn’t unusual to see ten year old cars or more being sold at significant prices, when US cars of that age would be getting toward worthless for anyone except the absolutely impoverished.
The Mondeo in Europe when compared to its competitors handles well, holds its value, its cheaper to run and maintain, and for our roads its a medium sized car.
Try driving a US car around a city like York, London, etc and you would soon wish you were in something about half the length.
I’m not sure the Mondeo is “renowned for its spaciousness”. That class of car is the standard family car/repmobile size. Below that you have hatchbacks like the Focus, and below that superminis. It is true that non-premium brands like Ford and GM no longer make larger cars than the Mondeo, because they have given up competing against BMW and Mercedes in that sector (or rather, they have bought into upmarket brands like Jaguar, Volvo and SAAB).
As for the performance of the V6 Mondeo, the figures for the 2.5 litre are 0-60: 8.3 seconds; top speed: 140mph. Not performance car numbers by any means, but are you saying that in the US that would be considered poor performance?
Thanks!
I accept your statement that Japan is against raising the CAFE, I certainly am in no position to dispute that. I still argue that the present situation simply means that the Japanese and American automakers are aligned, not that politicians are clueless. Perhaps Japan believes they can win in the large car market as well as in the small car market so they want a market that maximizes profit and consumer choice. Politicians may want to reduce total oil consumption without burdening small car owners. Whether raising the CAFE would do that I don’t know. But one can contend that it will. Automakers are obligated to push for the option that maximizes profits, not minimizes oil consumption. If they can get both I am sure they would be happy, but if not they must push for profit.
Yes. Honda ranked #5 (Buick, Lexus, Cadillac, Mercury), Toyota #6.
But: Mitsubishi ranked 9 places under “industry averge”, one step below Hyundai. Nissan was #9 from the bottom. (Land Rover was dead last by a long gap.)
So, of 39 places, we have Honda #5, Toyota #6, Mitsubishi #23, and Nissan #30. (Acura #12, and Infiniti #14, at Average)
So, it is* not *that “Japanese cars are better” it is that Honda and Toyota place quality very high. The other big Japanese car companies are significantly below average, worse than Chevy (21) and Ford (19).
We need to ask what Honda and Toyota are doing so consistently well, not Japanese car companies in general.
And let me add this- you pay extra for that quality. The Accord is around $28K (I am using CR’s figures for the model they reviewed, and am choosing 6cyl to compare). The Camry is $30K, the Ford Fusion is $26K, Hyundai Sonata= $23K, Impala= $27k, Saturn Aura = $21K. Other than the Saturn, anyone with half a brain can get $2000 off the American cars (and the Hyundai) with bargaining. Maybe $500 on the Camry and Accord.
So, is the extra quality worth up to $9000, one third the cost of the car?
Here’s a link to that list. Keep in mind this list is for vehicles with three years in service, which measures different things than initial quality studies. In many ways, it’s more significant because things have had three years to go wrong! Also, you notice the top four cars are “premium” cars (and I’m really only including the Mercury in that category as you’ve got to go to a Lincoln dealer if you want one). I wonder how much of quality survey reflects the treatment of the customer when handling problems? If I lose a vaccum switch during the warranty period, I’ll either be (1) super happy if I’m treated like a king and loaned a car while they fix mine, or (2) slam the hell out of them on the survey when they make me wait two days for the repair, give me the number for Enterprise to call myself, and express no sympathy while they also try to upsell me on uneccessary services. I realize that they’re reporting “problems per 100 vehicles” and so I’m not sure if this particular survey is generated from service reports or by the customers themselves.
Just a reminder that Lexus is part of Toyota (and Infiniti is Nissan and Acura is Honda). So like you said in your later post, higher quality comes at a price.
The University of Michigan just released its annual consumer satisfaction survey. Overall, domestic models compaired pretty well. Top spot went to Lexus, with 87% satisfaction, but Buick, Cadillac, Lincoln, Mercury, and BMW all scored 86%. Toyota and Honda got 84% The worst brand was Jeep, with 75% satisfaction.
Perhaps more significant is that the domestic brands have all improved, but the Japanese brands, except for Lexus and KIA, all fell from last year.
Well, back in the day (say, early 90’s), all of the American cars in my price range were just as you describe, plus not all that reliable. I went through two crappy Ford Escorts before a friend turned me on to his Honda CRX. So, I went out and bought an '88 Honda Civic Si after a huge repair bill for electronics that I didn’t understand at the time. It has a whopping 125 hp versus the 93 of my last Escort. It has a 16-Valve, overhead cam engine versus an 8-valve push-rod job. It handled well, nice and tight, versus the slop in both Escorts (these were the first gen, non-Mazda Escorts, which were really excellent improvements). The interior was like the inside of a space shuttle, and it just looked really, really good compared to either of the Escorts. Before buying the second Civic, I looked at Neon, the current Escorts, and some other subcompacts, but there was nothing better than the '95 Civic EX for many of the same reasons I mentioned. Back then, they really were better (at least that market segment).
Very not true. I have some Brazilian and Peruvian friends who work in factories here and they’ve said that some of the Japanese on the line are the biggest slackers and corner-cutters. Let me say that a different way: the stereotypically “lazy” South Americans badmouth the Japanese they work with for not busting their asses at work.
Things that other people have pointed out in this thread already are the keys, in my opinion: quality control, process management. (By the way, this guy thinks that Deming stole credit for ideas other people came up with, and makes an argument for competition in one particular area unrelated to car manufacturing for forcing Japanese companies to actually implement them.)
Multinational corporations might operate in dozens of countries to make parts for one item. There’s no way that cultural ideals at the worker level will make a positive difference, because the workers are so varied, and as has been pointed out, most of them are not Japanese. What is consistent is that Japanese companies concentrate on figuring out the best ways to make the parts they need for their products. Good design leads to good results. Making the process clean and robust enough to prevent or correct for worker error is undoubtedly an important part of Japan’s success in this aspect of business.
Management has a role, of course. Managers traditionally get moved around a lot as they progress in their career. They see how different divisions and different processes are run. That helps to get a broad, rather than a deep (and therefore sometimes narrow) view of how things should run. That probably also keeps them from thinking that they’re know-it-alls since they’re constantly exposed to unfamiliar situations and have to learn how to do their jobs all over again.
Another thing that helps is that, while Japanese society can be very hierarchical, consensus is also considered necessary. That means that memos on what the company is going to do get circulated to everyone involved, and that all those people have to sign off on it. That doesn’t mean that a dissenting peon will actually be able to make a change, but it probably helps to bring things to notice that might otherwise remain unnoticed until it’s too late. In this case, consensus supports hierarchy in that employees are encouraged to see themselves as part of the group. So, for example, if recruit Sato sees that something is going to get screwed up, even if he hates his boss he’ll probably say something, just because he doesn’t want his group to suffer for a mistake section chief Takahashi missed.
It’s not all roses and sunshine though. One of the not-so-nice things that big businesses here do is to take huge advantage of smaller suppliers. The costs of maintaining inventories is usually foisted off on those suppliers. The big guys will refuse to buy production overruns, so that has to get eaten by the supplier too. Dai-Mega Corp. doesn’t care, because those costs aren’t on their books, and those little guys will scrabble around in the dung for the coins the lords of industry fling them. Okay, I’m over-dramatizing a bit, but you get the idea.
There are some drawbacks to the way the Japanese do things too. The guy who made the breakthrough in developing blue laser diodes was paid a paltry ¥20,000 (about US$180) as a bonus. That’s nothing considering that regular biannual bonuses (which are so common that loan repayment schedules often take them into account) typically run up to 2 month’s pay for each bonus, and it’s downright insulting when the potential profit for licensing the technology is estimated to run to the* hundreds of billions* of dollars. That kind of thing is why Japanese companies have a reputation for polishing instead of innovating; a lot of the good people go overseas for work or study, and some of them don’t come back.
Their custom of mandatory (usually unpaid) massive overtime for salaried workers tends to burn people out. Another problem is that it’s not a good idea in Japanese society to stand out too much. Driven, brilliant people end up either getting stifled or disillusioned because their contributions are credited to the team, and there are few personal rewards for excelling. Actually, they are often actively discouraged from being too good or too ambitious. This is a cultural value that I think sucks ass. Any complaints you might have about the US encouraging mediocrity apply even more to Japan.
So, anyway, I think it’s all about engineering good processes and encouraging attention to detail and excellence in whatever workforce the company uses. Very little of it is connected directly to Japanese culture. Heck, some of their success is in spite of their culture.