Guaranteed Stupid

The failure of the American auto industry is well reported as Toyota has overtaken GM in one category after another. To me, when you look at this industry the startling revelation is what has lead to their downfall is exactly what they’ve been fighting for, in other words, it isn’t as if the world changed without them knowing, the reality is they pushed to be allowed to remain obsolete. The auto industry pours millions each year to keep destroy any legislation that regulates emissions or fuel efficiency. The cited reason is always cost.

Now the cost is even greater.

The auto industry is word renowned for creating gimmicks to move inventory whether it is employee pricing, cash back or 0% interest deals. Dodge/Chrysler/Jeep recently came out with a $2.99 gas guarantee. The promotion goes something like: They will insure you pay no more for $2.99 for gas for three years up to 12,000 miles each year. As consumers are being pinched at the pump this certainly appeals to one of their ever increasing expenditures, one that seems to continue to rise. The promotion goes straight at the fear that inflation, gas and consumer good prices are on the rise. It plays to the idea that the economy is uncertain and so why not be assured that your gas price will remain constant for at least 3 years. The fact is Americans aren’t making the large purchases at the rate they were only two years ago. I suppose it is smart promotion to move current inventory but something about it just makes me angry.

Perhaps it is that behind the promotion is the idea that American automakers would not have to subsidize fuel cost if they made more efficient vehicles. Automakers claim increasing efficiency would be too costly. Could it be much more costly than having to subsidize the cost of fuel in addition to offering $2000-$3000 in incentives? For years automakers along with their lobbyist have fought increased efficiency standards and now their fight has turned against them. I can’t imagine that all the money spent on fighting increased efficiency in combination with incentives now being offered because of poor efficiency is less than the cost of increasing efficiency. Now automakers are stuck with vehicles they can’t sell.

Something about this promotion says to me, “we know our fuel economy sucks so we are going to offer a price discount because of our disgracefully poor engineering.”