From: miklg@acuson.com (Michael Goldman )
Subject: Re: Honda: America's choice!
Organization: Acuson; Mountain View, California
Date: Fri, 22 Jan 1993 14:33:52 GMT

speednut@werple.apana.org.au (Mark Jose) writes:


>G'day Rikiya Asano <ra01+@andrew.cmu.edu>,
> 
>>As Mr. Yanagisawa has just pointed out. If we were to discount the sale
>>of Ford
>>Taruses to car rental agencies than Honda would have lead the Honda vs
>>Ford competition by a wide margin. This is a great point! The America
>>consumer has spoken! Honda number one!
> 
>I would take the counter point that if the cars were of poorer quality
>then the car rental companies would be ill-advised to purchase them. In
>this case I would say that the purchase of American cars further
>verifies that the American car is number 1.

	The newspaper reports on this said that Ford virtually gave
	their cars to the agencies at a loss of $2,000/car to get those
	extra sales that would put them over the Accord.  They mounted
	a big push in the closing months of '92 to get #1 position.

	This is all pretty silly.  We're talking about 1 model name
	Taurus vs another model name, Accord.  Ford still has 27% of
	the US market (and gaining), and Honda has 10% of the US
	market.

	On the subject, a reprint of a post from last year, when
	this topic came up at roughly the same time:

	From the San Francisco Chronicle, 1/31/92, page B2

	"Ken Brown, an international public-affairs consultant with
	Ford, notes that his company was the largest auto producer in
	Japan in the 1930s, with 75% of total sales, and that it
	assembled most of the vehicles for the Japanese market in
	Japan.  Then the market was closed to foreign firms and foreign
	imports.  Although the market re-opened in the 1950s, high
	tariffs and commodity taxes kept it effectively closed until 3
	years ago.

	"Brown said that Ford exported English-built, right-hand-drive
	Cortina models to Japan in the 1970s, until the market
	barriers, high labor costs in England and lack of sales made
	the vehicle's cost prohibitive.  Ford then went to shipping
	left-hand-drive cars from the US.

	"Ironically, whne Honda of America grabbed headlines in 1988 by
	exporting US-built Accord coupes to Japan, the company shipped
	left-hand-drive cars.  Honda explained that the quantities were
	so small that it was not worth the investment to retool its
	Marysville, Ohio plant to build righ-hand-drives.  Yet that
	same argument has helped make the Big 3 a laughingstock in
	Japan.

	[Then follows some complaints that every item of every imported
	American car gets inspected, while the US accepts manufacturers
	certificate of compliance. No US car that passed US emissions
	test ever failed Japanese tests.]

	"Brown rebuts Japanese charges that, unlike European
	automakers, the Big 3 won't spend the money required to build
	sales in Japan.  He notes that Ford, wiht its Japanese partner
	Mazda, has spent heavily to build an independent network of 115
	dealers wirth 320 outlets exclusively selling Ford vehicles.
	The Autorama dealer network sells 90,000 Ford cars annually,
	although all but about 5,000 are built by Mazda in Japan.

	"Ford also opened a center in Hiroshima, to design cars
	appropriate for the Asia-Pacific market.

	"'But after decades of total or virtual exclusion, there
	remains almost total resistance to imports," Brown contends.
	"It began as a structural barrier, and now it's almost
	impossible to counter."

	End of quote.  Mr. Brown is obviously biased, and I have noted
	that cars in Japan with Ford on their front are sold in the US
	with Mazda on their front, so I don't know how serious the Ford
	effort is.

	As for the quality of US cars, Consumer's Reports had an interesting
	article last April wherein they compared the quality of US autos
	(GM, Ford, Chrysler) vs Toyota and Honda.  They found that based on
	absolute numbers rather than relative rankings, the best US maker
	(Ford) was now on a par with the Toyotas of a few years ago, but that
	the 2 Japanese brands had continually improved their quality.  The
	trend was clear - showing that all three US manufacturers were
	continually improving their quality, and that Toyota seemed at
	a point of diminishing returns.  It is not therfore inconceivable that
	all the automakers will reach the same plateau of quality, beyond which
	further improvements are impossible to achieve.

	People have often noted that the Japanese prize for quality is
	named after an American named Demming, who introduced most of
	the current methods to Japan.  Well, Ford has hired Demming's
	acolytes and is improving their quality rapidly.

	Demming is still alive and will consult for $10,000/day.  The
	first thing he does when he comes into a company is tell the
	President that its his responsibility to see to quality, and
	that his main duty is to see that his employees are happy with
	their work.

	- Michael Goldman

-- 
"History teaches us that men and nations behave wisely once they have
exhausted all other alternatives." - Abba Eban
	Disclaimer:  All views are solely my own & not the views of Acuson.
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