Detroit's orphan cars
NEW YORK (Fortune) -- "Ford looks to Europe for new U.S. products" reads the
headline in last week's issue of Automotive News. "CEO Mulally eyes Mondeo,
Seems to make sense. Ford (Charts) is a global company, after all. Why not
use all its global resources to fill holes in its U.S. product line?
Overweighted in trucks and SUVs, Ford could use some car-based vehicles to
raise its corporate fuel economy average. Cars designed for Europe, where
gas costs twice as much as it does here, would fit the bill.
Analysts have applauded Ford's move as a sensible one. "Why Ford has waited
this long to bring some of its better products over here remains one of the
mysteries of the universe," reads the influential Detroit blog
AutoExtremist. "The fact that Ford can jump-start its U.S. portfolio with
some of the stellar performers from its European portfolio is the
quintessential no-brainer of the year."
So you would think. But cooler heads with longer memories may recall that
earlier efforts by Ford, as well as General Motors and Chrysler, to import
cars made elsewhere have ended badly for the companies, their dealers and
especially the customers.
Want some examples? Consider:
GM's Opel-based Cadillac Catera catastophe. Despite being reengineered for
the American market, "the Caddy that zigs" was overweight, underpowered and
undistinguished, and was withdrawn in 2001 after a four-year run. Cadillac
replaced it with the far more successful made-in-America CTS.
Ford's misadventure with the Merkur line of European sport-luxury cars.
Derived from European Fords, the Merkur line was supposed to revive
Lincoln-Mercury dealers by giving them a line of sportier cars. But the
Merkur XR4Ti coupe was sold half-heartedly from 1985 to 1989 before its plug
was pulled and the four-door Merkur Scorpio hung around for only two years
before it was dropped in 1990.
Chrysler's Mitsubishi madness. Chrysler (Charts) started selling Mitsubishi
cars badged as Dodges, Plymouths and Chryslers as a desperation measure in
the 1970s and got the volume up to as high as 110,000 vehicles by 1982. But
some of the cars were money-losers and few did anything to build brand
equity. Chrysler pulled back from the arrangement as it expanded its own
product line and Mitsubishi became more aggressive about distributing its
What killed all these ventures, besides the quality of the vehicles, was the
unfamiliarity of the merchandise. American manufacturers and dealers don't
know how to sell cars designed for overseas markets.
The big loser, in every case, is the customer. Once cars are no longer
imported, their resale value drops precipitously. Parts become hard to find
and the cars are treated as orphans - unwanted and unloved.
Ford isn't the only manufacturer who wants to borrow from Europe. GM
(Charts) has already started. To save money, it has decided to infuse its
Saturn product line with cars developed by Germany's Opel. The Saturn Aura
sedan is all but identical to the Opel Vectra, the current Saturn Vue SUV
will be replaced in 2008 by the Opel Antara, and the Saturn Ion small car
will be supplanted by Opel's Astra.
Figuring out country of origin for each model may leave customers confused.
The Aura is assembled in the United States but the Antara, which hits U.S.
showrooms this fall, is being made in Belgium, while the Vue will be put
together in Mexico.
GM has a lot invested in Saturn, so it should show patience. Ford's record
on that score is mixed. Take the car known as the Capri. When it was sold in
the United States in 1970, the sporty two-door was built in Cologne,
Germany. That car was discontinued in 1977 and replaced by the Mercury
Capri, basically a rebadged Mustang and made in America, which was sold
until 1986. That in turn was succeeded by another Mercury Capri - this one
built in Australia. A four-seat convertible with rather clunky styling, it
lost money and only lasted until 1994.
I'm partial to Capris because I owned one of the German ones. It had a
sporty layout with a long hood, short deck and slick manual gearbox, but,
like many cars of that era, it rusted up and wouldn't start in damp weather.
These days you hardly see Capris on the road - like most of the rest of
these orphans. No brainer indeed.
Rule of thumb - Never attribute to malice that which can be adequately
explained by stupidity