Guilt by association? Maybe, but I don’t care!!

I couple of weeks ago my family started the process of looking for a car for my daughter.    The problems with the braking systems on several Toyota models was already well know.   Because of the braking problems we decided not to look at Toyota, even though they were starting to make some nice deals.   Not including Toyota did not affect other  car company choices.  Two of the auto dealerships we went two where Honda and Ford.

The reason why I mention these two dealers specifically is because I asked them both the same question and got two different answers.  When I asked him if the problems at Toyota lead to increase in their foot traffic and sales I was told “no” by the Honda sales person, and “yes” by the Ford salesperson.  I admit my survey’s sampling size was small, but I thought their respective business would have definitely risen. 

 So why would Ford see an increase and Honda not?  I can think of a few explanations;  First, more Americans are reading my blog and are making a patriotic choice with their purchases.  Second, some consumer lump Honda, and other Japanese manufacturers, in with Toyota concerning safety.   Lastly, this is just a continuation of the sales momentum domestic manufacturers, lead by Ford, have been enjoying for the past several months. 

So is there any proof of an actual sales shift consistent with my two person survey?   Numbers from January show the U.S. trade deficit dropped.  A major reason, beside less oil imports, was a reduction in auto imports.   The trade deficit with both the European Union and Japan saw a significant drop, 56.3% and 27.3% respectively, in the monthly deficit.  Both drops were mostly attributed  to lower auto imports.

Overall, U.S. automobile sales have been mediocre at best, even for domestic brands.  What is good is that the domestic manufacturers are doing relatively better.  The surge in domestic sale comes at a good time for both the U.S. manufacturers and the economy.   The comparative quality of the domestic nameplates has improve a great deal over the past decade.  From initial quality to cost of ownership, domestic brands have, in many cases, overtaken their international competitors.  This has a twofold impact on sales.  First, there is great word of mouth for domestic nameplates.  When my daughter mentioned that she was looking for a car, one of her friends told her how much he loved his Ford Focus.  These factors will greatly increase the number of customers who return to Ford and GM for their next auto.   Another more important reason that this surge is important is that our economy needs it.  The increase domestic production needs has already started to add ten’s of thousand of manufacturing jobs back into our economy.  In addition, the reinstatement of over 600 “to be close” GM dealerships keeps thousands of more jobs which would have been lost.

There is a significant chance that we will have a double dip recession.   Just look at January’s trade numbers: As our imports dropped so did our exports.  It seems that only a few countries are producing more and/or consuming more in any significant way.  China continues undeterred with their global economic game playing, which will artificially improve their growth while subtracting growth from the rest of the world.   The financial crisis in Greece, even though their economy is relatively small, will drag overall growth in Europe down.   Although the worst might be over, there are still significant problems to solve.  As with the first recession, and even if there is no double dip, it is imperative that we re-double our efforts to buy American.  Our country’s standard of living depends on it.