Actually, they can pull the dealership from a dealer if they don't make
quality standards. One Caddy dealership closed up near where I used to live
(Crea Caddy - maybe Mike knows these people). The new dealer was required to
increase the size of the showroom within a certain amount of time.
If a McDonald's gets a lot of complaints about a particular independent
francise, they will investigate. If there are problems with the way the
restaurant is run (other than the restaurant sells lots of unhealthful
food), McDonalds will either pull the francise or take over the restaurant
if the problems aren't fixed. Likewise, if a dealer refuses to repair cars
with complicated problems (I know of one dealer who was known to try to get
complicated problems sent to another dealer) or gives a really poor costumer
service experience, the car makers should be able to step in.
My dad used to sell and repair Kohler, Tecomsah and B&S engines. If he
didn't meet the quality standards (mostly for training), he would not have
been a dealer for them.
I would be surprised to learn that if a dealer doesn't do an adeqaute job,
that the maker can't pull the francise. I think the Japanese excercise these
rights more often than the big 3.
It is not as easy to pull a franchise as you might think. Remember
Ford and the "Blue Oval Certified Dealer" fiasco? Ford wanted to
identify dealers that met certain minimal standards. A group of
dealers in Texas sued Ford saying this wasn't fair - and won. States
have very restrictive laws that favor the automobile franchise owners
over the manufacturers. State legislatures are a lot more likely to
favor local dealers than far off manufacturers. The Japanese
manufacturers often have better franchise agreements (from the
manufacturer's standpoint) than US manufacturers. They arrived much
later and avoided many of the bad ideas in the much older US
manufacturer's franchise agreements. The newer brands (Acura, Lexus,
even Saturn) have even more restrictive agreements. I was surprised
that GM got away with creating the Saturn brand. If I had been running
a Chevrolet dealership when Saturn was created, I'd have been very
upset if GM granted a Saturn franchise that competed with me. I
suppose this is why GM originally set Saturn up as a completely
different (but wholly owned) corporation.
GM originally set Saturn up as a completely different corporation determine
if a small vehicle could be built in the US at a completive price, rather
than relying on GM economies of scale to subsides the selling price.
The MSRP prices for smaller vehicles are indeed subsidized a by the much
higher profit margins on larger cars and trucks. You would be surprise to
know just how little more it costs a vehicle manufacture to build a vehicle
that sells for 35K, over one that sells for 20K
When Ford introduced the FWD Escort, it cost nearly twice as much to
manufacture as the RWD vehicle it replaced.. The Escort was sold to dealers
at a loss of several hundred dollars for several years before economies of
scale succeed in greatly reducing the build cost. Why was it sold at a
loss? Because it was needed to meet the CAFE.
The Taurus, which came to market six years later, was also much more
expensive to build than the RWD car it replaced, as well. The selling rate
for the Taurus the first year, at over 400K, as well as the higher profit
MSRP, made for a quicker cost recovery
Before you ask my source, I worked at Ford on the Escort and Taurus design
teams at the time.
You, as you are prone to, are free to believe whatever you chose. ;)
Ford and GM had to spend bullions to change several of their assembly plants
from building less expensive RWDs to start building FWD vehicles. The 500
was not comparably expensive to bring to market since it was built in the
new FWD plants, off a previous Ford chassis on which it build Volvos.
No import builds or assembles small car in the US, they are all imported or
assembled in Canada of imported parts. Honda, Nissan and Toyota builds
MIDSIZE cars in the US and Nissan builds trucks. In the case of Toyota,
with the exception of those built in the GM/Toyota plant, only assembles
them of mostly imported parts, which greatly reduces the build costs Honda
does not really build trucks, they make their trucks on car chassis and are
more like crossovers than real trucks
Actually, Civics are produced in Ohio and of domestic and globally sourced
parts. Corollas are built in the US.
> Honda, Nissan and Toyota builds
I think that you are missing the point that Toyota and other imports use a
lot parts made in the US. Whether or not it is more than half differs on
model and manufacturer. Toyota spends something like $28,000,000,000 on
parts and supplies in the US. Toyota has two US design facilities, one near
Detroit and the other in California. Car makers want to make their vehicles
with mostly local parts near where they sell their vehicles. For example, VW
was making the old Beetle for years (going into the 90s, I think) in Mexico
and Brasil. Likewise, Ford makes a lot of vehicles for sale in Latin America
in Brasil and Mexico. And it builds cars for Europe mostly in Europe. And
Ford and GM are getting into make cars in India and other parts of Asia.
And, when they do that, that want to get parts made locally, if possible. It
builds goodwill. And it is cheaper than shipping completed parts overseas,
in most cases.
Most of the parts that Toyota uses for their cars and trucks in the US come
from American and Canadian plants. When they first starting building cars
in the US, they used mostly important parts, but most of the parts they use
in US-built cars and trucks are domestic, now. (Nearly 1/2 of all Toyota
parts on its new cars and trucks come from the US; very few Toyota parts
come from the US on cars built outside the US; so that means that most of
the parts on its US-built cars have to come from the US.)
Overall, domestic brands have a higher proportion of their parts built
domestically, though, around 75-80% for US makes vs. 50% to 66% Toyota
(different source give different numbers).
(Do not tell me anything about VINs and domestic content unless you are able
to back your claims with real evidence.)
Yet they get the job done in a manner that suits their buyers. Just because
you don't think that the construction is the best construction technique
doesn't mean they're not trucks. They get the job done. And in the case of
Toyotas, they get to stop on ramps, right in the middle of the Superbowl.
And, Toyotas will run in a few weeks at Daytona! You don't get more American
than that, except, of course, for Ford and GM.
If you don't like the way they are built, buy a different truck.
Toyota has only around 5% of the full size truck market, Nissan around 3%..
Honda does not even offer a full size truck. Ford has more than 35% and GM
has nearly 30%, Dodge nearly 20%. Corollas are assembled in Canada of mostly
Naturally you are free to believe whatever you wish but even Toyota does not
agree with you. Their ads say assembled in the US of world sourced parts.
I always thought the first number in a VIN meant that country the car was
built in. Nothing to do with content, but where the car was actually built.
My Bonnie has a '1', as it was built in the US. Trans Am's and Impala's have
a '2' cause they are built in Canada.
Some US built cars have a 4 or 5. Mike keeps saying that those with 4 have
40-70% US content and those with less than 40% have a 5. He said a retired
engineer friend of his said this was so. Yet, Mike has never been able to
provide any evidence that this is so. Nothing I have found is consistent
with his view. The truth is, it used to be only 1's, but they had to add 4's
and 5's when there were not enough IDs for manufacturers left in the 1
My US assembled Sonata has a 5. It is 25% US, 75% Korean parts. Of course,
it still may be just a new series of numbers as you point out.
This has some information, but not correct.
They state the first digit is the country, but 5 is not listed. They then
state the second digit is the manufacturer, buy my Hyundai has an "N", they
say is for Nissan.
This shows a 5 as US
The first 3 characters indicate what is called the "world manufacturer ID,"
or WMI. The first digit indicates the country or region of manufacture. For
example, 1, 4 and 5 are US, 2 is Canada, 3 is the rest of North America, and
J is Japan. However, it is all three characters that identify a
manufacturer, not just the 2nd one. For example, 1ME is a WMI for Mercury,
while 1M1, 1M2, 1M3 is one for Mach Trucks. The reason why 5 was not listed
is probably that 5 was added last as a US VIN, because it needed more
numbers than was possible with just 1 and 4 as the first digits, because so
many different companies make trucks, cars, motocycles, off-road vehicles
(off-road vehicles have their own VIN system, but it shared VINs with
on-road vehicles until a few years ago), construction equipment, fire
trucks, buses, etc. Usually, the type of vehicle is identified as well, like
pickup, SUV, sedan, motor cycle, etc. That is why there are more than one
VIN for Mack.
So it is a combination of all three characters, not just the first two that
identify the maker (and the type of vehicle), including the country it was
The reason for the '5' is that vehicle has less than 40% US content, not to
be confused with the NA parts label that applies only to parts.
I'm not sure of the meaning of the 'N' designation without doing more
research, but the Mustang since 2005 is currently being built in the former
Mazda Flat Rock plant and the manufactures assembly plant designation is
"ZVF" not 'FBP' as was the 2004, built in Ford Rouge plant that now building
the 2008 Taurus
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