Buy American Cars (or Not)

I'm not even sure what an American car is.

Of course it's not the "patriotic" thing because it would collapse a good chunk of the economy built around Detroit if no-one bought a new car for a year.

I don't expect everyone to drive a 15 year old car like I do, but I simply do not understand why people buy brand new cars when the previous year model with only a few thousand miles will be thousands of dollars cheaper.

What am I missing?

If you plot any piece of random data, and then sort by frequency you'll get a graph that looks more or less like this.

I think you should verify your data in two ways:

1: Plot the graph for each year separately, and see how correlated the years are. If the rankings are the same year after year then you have something, otherwise it's just random.

2: A second thing is randomly divide American and non-American each into two groups by model (just randomly assign each model into american 1, american 2, non 1, non 2). Then plot the data for each group in each place, and see if the rankings are the same - if they are, then the American vs not distinction is valid. Otherwise, again, you just have random data.

And indeed I think a commentator has remarked that the focus is on the consumer behavior, not the car industry per se. If the distinction is ignored by the main body of the customers, it can be not too important for the researchers as well.

Car companies have massive discount plans for workers, friends and family, supply chain workers, previous customers, etc.

Detroit has lots of automotive industry workers, and thus for many people around Detroit, it's silly not to buy the car that you can get at a huge discount. This isn't necessarily an American vs non-American choice, since workers are typically eligible for a steep discount with only one car company.

Around the time that Japanese automakers began producing quality products, automotive execs in Detroit looked out their office windows and saw an increasing number of competitors' cars in the parking lot and it scared them. What kind of statement is it when a worker buys the competitor's product. So they offered steep discounts, which are pretty much guaranteed to result in workers buying their employers' product.

In more recent years, this has also been used to boost sales numbers in times of crisis. US automakers have had miles of unused tarmac near Detroit Metro airport filled with cars that they couldn't sell. At some point they just offer a steep employee discount and now a bunch of dud product that is losing money can be turned into a few months of strong sales. By using employee discounts for this, the firm is not seen to be succumbing to massive widespread discounting, and so the technique stays off the radar fairly effectively.

When you consider the cities that have automotive plants, supplier manufacturing plants, etc. and all the discounting going on in these areas, the chart starts to make a lot more sense.

Now for a small rant: Ironically, preventing workers from experiencing competitive products seems to have created tremendous myopia in Detroit and may be responsible for the decline of the US auto industry. Detroit is still using cheapo vinyl and plastic on midrange and even low end luxury cars, far inferior to the materials used on low trim-level Honda and Hyundai models.

One can imagine that if more workers had needed to think carefully about what they wanted to drive, the handwriting would have been on the wall and something could have been done about it before it was too late.

Note to business owners. If you have to discount your product by over 20% to get your own employees to buy it, take a closer look at what they prefer about your competitor's product.

I feel a particular affinity between D.C., SF and NYC, I wonder if it's the similar mix of cars that do it?

More importantly, I see sales figures for some American cars, and find them unbelievable. I see way more Hondas, Toyotas and Hyundais these days then just about anything else. Stop at a stop light and I guarantee there will be on of the above three cars one car away from you.

Then I travel to the midwest, lets say Ohio. And boom, American cars everywhere. Those three brands above are almost nowhere in sight. And suddenly the sales figures make sense. I can't remember the last time I've seen a a Ford Fusion, but they move around 20,000 a month. In Ohio, I can't remember not seeing a Ford Fusion.

1. Most American cars are NOT world cars, I'm a big guy, 6'3 300 lbs, I dont fit well in a world car, so I'm always looking at vehicles designed for the North American market, plus I do a whole lot of long distance driving.

2. Less intensive maintenance schedule, my town car will never need its timing belt changed, nor a valve adjustment, the primary services done, are simply to change fluids.

3. While is sounds jingoistic, its patriotic, I prefer to buy something made here.

Keep up the great work, always a pleasure to read one of your articles.

Hang out at a gas station 8 miles away, however, and you see maybe 50% American cars.

Also, why is Salt Lake so high in used-car prices? Large Mormon families?