Big Three raise the bar for US cars

Toyota's safety problems and a buffed-up lineup of offerings from Detroit's Big Three are rubbing the tarnish off car buyers' perceptions of US models.

An Associated Press-GfK Poll shows that 38 per cent favour US vehicles while 33 per cent prefer Asian brands, a significant improvement for US carmakers compared with four years ago.

"Really, the American car industry has opened its eyes," said Jose Nunez, 24, a customer at Planet Dodge Chrysler Jeep in Miami on Wednesday. "And it's really giving the people what they want, what they need. I think after all we've been through, definitely the three big companies are responding to it."

The findings provide fuel for US carmakers who are getting sales and swagger back after a bleak period of huge financial losses, job cuts and market share declines. General Motors Co. and Chrysler LLC needed government help just to survive.

Watching an iconic American industry beaten down amid the Great Recession may be one reason Americans are giving US carmakers a closer look.

"I think Americans are beginning to realise the significance of America's auto industry to its history and to its future, and we're a bit more sensitive now to what will be its fate," said John Heitmann, an auto historian at the University of Dayton.

Veronica Sullivan, 41, typified that approach as she finalised the paperwork at a suburban Buffalo, NY, dealership on her new Ford Focus.

"Keep the wages in the American hand, supplying jobs for Americans. Why not keep the cash flow where we are and benefit for ourselves?" Sullivan said. "And I think also that Ford, for myself, builds a really good car."

The poll results are encouraging to Tom Gill, who owns a Chevrolet dealership just off Interstate 75 in Florence, Kentucky - in the heart of the so-called "Auto Alley" region loaded with auto-related businesses and plants. The veteran dealer often uses the American flag and patriotic pitches in his advertising.

"The General Motors product line, the Ford product line, have just really been producing hit after hit," said Gill, citing the Chevrolet Malibu and Camaro as current hot sellers. He says his sales are up 30 per cent so far this year.

General Motors CEO Ed Whitacre noted the optimism at a factory in Kansas City, where he announced this week that GM was paying US$8.1 billion ($11.3 billion) in US and Canadian government loans early. He also announced that GM will pump US$257 million into expanded production at the Kansas plant and another in Michigan.

Whitacre said the company is "designing, building and selling the best cars and trucks General Motors has produced ever."

Peggy Hyatt, a 52-year-old worker at the Kansas City plant who moved there after being laid off in Georgia, echoed that sentiment.

"We may have had hard times before, but now we're coming back," Hyatt said.

The AP-GfK Poll was conducted in March, as Toyota reeled from the recall of more than 8 million vehicles around the globe and allegations it responded sluggishly to safety concerns.

In a December 2006 AP-AOL poll, 46 per cent said Asian countries made superior cars, while just 29 per cent said American carmakers did.

In both AP polls, Japan - home to brands including Toyota, Honda and Nissan - was by far the dominant Asian nation volunteered as producing the best cars. European vehicles were viewed about the same in both polls; 15 per cent of respondents last month, and 17 per cent of those in 2006, called them top quality.

The safety controversy is hurting Toyota's US market share, which dropped from 16.3 per cent in the first quarter of 2009 to 15.2 per cent for the same period this year, according to industry sales tracking firm Autodata Corp.

Market share for the Detroit Three combined rose from 43.8 per cent in the first quarter of 2009 to 44.7 per cent this year, while Asian carmakers saw a drop from 47.9 per cent to 46.8.

Asian carmakers topped the Big Three in combined market share for the first time last year. US carmakers had a combined US market share of 57 per cent as recently as 2005, but when high gas prices deflated the truck and SUV markets they dominated, they were battered by the long-simmering notion that the Japanese made better cars.

While the US carmakers have revamped their lineups, including with more fuel-efficient vehicles and crossover and hybrid innovations, analysts say Ford Motor Co got an extra boost by not accepting a taxpayer bailout or going into bankruptcy as GM and Chrysler did.

Ford's US sales jumped 37 per cent in the first three months of this year, and its market share saw its biggest increase since 1977. Its reliability ratings, as judged by Consumer Reports, are now on par with the leading Asian makers, though GM has also improved.

Some car buyers continue to have a dim view of the other US carmakers - one of which is arguably not even American anymore. Chrysler is now run by Italy's Fiat Group SpA.

"The reason I don't want any of my kids driving anything but a Ford is because GM and Chrysler had to get bailed out," said Brian Sorell of Johnson County, Kansas, who drives a Ford Flex.

"I'm vocal. I tell them you're not buying any cars that the Government had to pay for. Period."

Martin Zimmerman, a former Ford executive and now a professor at the University of Michigan Ross School of Business, cautioned that Detroit still has to deliver.

"I've always felt that people will feel good buying an American product, but that product has to be quality-competitive and cost-competitive for them to buy it," he said.

Toyota and Honda officials often point out that they are major players in the US economy as employers at major plants on US soil. Honda has been making cars in Ohio for more than 30 years.

"I think most automakers have raised their games in past years, offering Americans an array of solid product offerings," said Curt McAllister, a Toyota spokesman.

"Despite our apparent problems, we are encouraged by the loyalty of our customers, buoyed by the best dealer body in the industry."

The AP-GfK Poll was conducted March 3-8 by GfK Roper Public Affairs and Media. It involved interviews with 1002 adults conducted by landline and cellular telephones. The margin of sampling error was plus or minus 4.2 percentage points.AP