Friday, December 5, 2008

Things for Auto Industry to Thing About Before Asking for Our Money

Now it is the auto industry's turn to ask Congress for a bailout (or loan). In all honesty, I really haven't given enough thought to whether I think this is a good idea or a bad idea (I'm leaning toward good but I could be swayed) and I'll readily admit that I do not have anywhere near enough information to make a truly informed decision on the issue. Having said that, there are a few things that I think that the auto industry ought to think about as part of their survival plans.


Let me preface this discussion by asking two semi-rhetorical questions: 1) Do you enjoy the process of buying a car? 2) When I say "car salesman" what words come to mind?


Retailers like Best Buy have made shopping for technology fun. Borders and Barnes & Noble make book shopping a pleasant experience (although I do miss some of the quality independent bookstores). And most retailers of other products have endeavored to make their own shopping experience a happy one. But not the auto industry. I don't know about you, but I absolutely dread the process of shopping for a new car, so much so, in fact, that I will put it off as long as possible. If the auto industry really wants to sell more cars -- and let's face it, at the end of the day, that is really what the industry is all about -- then they have to find a way to get people like me excited about the actual process of shopping for and buying the car. It should be pleasant, not painful. (And note that there is a distinction between excitement for the car itself and excitement in the process of shopping for the car.)


When I buy a widget at Target, I know that I'm paying the same price as everyone else. Sure, the item may have been on sale last week or might go on sale next week, but for the most part, everyone buying that widget that week will have paid the same price for it. My widget will have come with the same warranty as your widget (unless I paid for some kind of "protection plan"). In a lot of cases, I can even return my widget if it doesn't live up to its advertised qualities. I can even make a rough guess about what the retailer paid for the widget before selling it to me.


Of course, none of that holds true when buying a car. I have no idea whether the price that I'm paying bears any resemblance to the price that you're paying. Perhaps I'm a better negotiator than you are; then again, maybe I'm a miserable negotiator. In either event, neither one of us really knows if we are paying the "best" price for that car; instead, we are at the mercy of our respective "skills" in negotiating matched against the skills of the particular salesman that happens to shake our hands when we first walk onto the car lot. I don't begrudge the salesman and dealer making a living from selling the cars, but I don't ever want to feel as if I might have been cheated or taken advantage of and that, all too often, is precisely how I feel after buying a new car. I may have gotten the absolutely best possible deal and yet I still feel is if I've been played and worry that someone got a better deal.


Factor on to that the fact that certain people are treated differently by the salesperson (I seem to recall readings studies about how women and certain minorities are treated at car dealerships) and the problem is magnified. I know that my wife would not be amused to learn that she paid more for the widget at Target simply because the salesperson knew that she didn't know as much about the product and could, therefore, be "taken for a ride".


Besides a house, a car is just about the largest purchase that most people will ever make. So why should we be put in a position where we feel bad about that purchase? And if we do feel bad about that purchase (even without real reason), why would we look forward to our next purchase?


Maybe there is something that I fundamentally don't understand about the auto industry. But I don't see why the car can't simply have a price tag on it that tells me the price that I and everyone else must pay for that car. And I don't see why that price tag has to have "extras" that are nothing more than thin disguises for the dealer to steal a few more dollars from my wallet. I guess what I'm saying is that I don't want to negotiate the price of my car and I don't want to worry that someone else was able to negotiate a better deal. I want to decide which car I want, be able to compare one to another on the basis of features and the known price, and then make my decision. I don't want to have to play games with the dealers. The mere fact that there are so many services available (CARFAX and Consumer Reports, for example) who offer services to help a consumer try to learn the "right" price to pay for a car illustrates the problem.


And speaking of games, does anybody else go absolutely berserk when the salesman says, "Gee, let me go talk to my sales manager," before disappearing for 20 minutes? What's that all about? And how many times have you watched the salesman and sales manager stand around and laugh during that time. Are they laughing at a good joke or are they laughing at us? I'm sorry, but that just isn't the way to make me feel good about the process of shopping for and buying a car.

One more quick point on the subject. When you take your car in for warranty work, do you trust that you are getting the best service work? And when you ask a question of the service department, do you trust that you are getting the correct answer? If you are anything like me, I suspect that you did not answer either of the foregoing questions with an unqualified "yes" and that, of course, is demonstrative of yet another problem in the auto industry. A car is a complicated machine and most of us are at the mercy of the mechanic to tell us what is wrong and how to fix it. The fact that many people don't trust what the mechanic tells them but are, essentially, powerless to do anything but act on the basis of that mistrusted information is yet further illustration of the problem and of the disconnect between the auto manufacturers and the car-buying public.

So, by all means, the car manufacturers should rethink their approaches to automotive design and fuel efficiency and employee benefits and a whole host of other corporate business decisions. But I think that they will be doing themselves an enormous disservice if they don't use their bailout request as a chance to rethink their relationship with their intended customers to try to find a way to make us want to buy cars.

And why can't I buy a car on Sunday in Indiana?

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