2009 Chicago Auto Show: Calling on the industry to embrace change

With sales way down and several automakers struggling for survival, the mood at this year’s Chicago Auto Show was somber. So appropriately, the tone of the keynote speech by Hyundai president and CEO John Krafcik was sobering. The banter on the show floor later showed many critics found it highly controversial. Others found it inspirational. 

Either way, Krafcik clearly hit some chords in the industry – and promised some benefits for consumers, if those in attendance take Krafcik’s suggestions to heart.

Among the key points:

• The auto industry – indeed America – is on the cusp of a revolution, bred as most revolutions are, of hard times. But also stemming from new public demands for better fuel efficiency and more corporate accountability.
• Automakers have done long-term damage to their reputations by fighting environmental, safety, and fuel economy regulations that the public – their own customers – see as beneficial to society.
• Automakers have put too much focus on meeting cost targets. “Any car company can meet a cost target and deliver a terrible vehicle,” he says. But missing the target by $100 per vehicle and putting the money into better features and higher quality would generate higher consumer satisfaction than extra rebates that drive the perceived value of a car down, he said.
• Automakers aren’t really competing for consumers’ dollars against each other as much as they’re competing with often perfectly good used cars already sitting in consumers’ driveways. The only way to win that competition is to innovate with must have new features, such as improved safety and fuel economy.
• Automakers must embrace safety and fuel economy as unquestionable good things. Saving lives is good. “There’s really no point in arguing about the veracity of climate change when you stop to consider the finite supply of oil and the turmoil that our consumption habit is fueling in the Middle East,” he said.

I couldn’t agree more. And our Ratings and advice have always reflected the importance of safety and fuel economy to consumers and society.

It seems to me that on all of these points, the problem is more than insularity. It’s cynicism. Cynicism that increased demands for fuel economy can’t be met; cynicism that consumers are more interested in short-term rebates than in buying good long-term car; and cynicism that the public doesn’t know what’s good for the country.

Other analysts at the show share Krafcik’s prescription for curing cynicism: listening. Specifically, listening more to customers and responding to their answers in a tangible way, even if that means change.

I hope automakers respond to Krafcik. We’re all for listening to consumers. What would you like to tell us – or the automakers? Use the comments below, or the forums.

—Eric Evarts

Comments

[Brandon]

Chicago got voted the 3rd most miserable city in the Country according for forbes! Ive never lived there but here are some reasons I found by someone who has lived before. Pretty interesting.

http://www.gotoguy.com/2009/02/12/my-miserable-hometown/

[Andy]

I don't agree with Krafcik's comments that American consumers were/are demanding better fuel efficiency. That was only for a very brief period last year when gas was well over $3/gallon.

And that is exactly the problem for the American car industry. What they need - and what the whole country needs - is a gas tax that reminds consumers every day how important it is to conserve fuel.

The European fleet of vehicles isn't radically more efficient because Europeans are better, more socially conscious people, it's because gas, when it's "cheap" like it is now, still costs around €4/gallon.

[B. Good]

I've never understood why ANY car or truck should make it through testing and into mass production and then score a POOR or MARGINAL crash test rating. Shouldn't creating a safe vehicle be more important than the number of cup holders? Yes, we have ourselves to blame because if we stopped buying unsafe vehicles....

[Mark]

"What they need - and what the whole country needs - is a gas tax that reminds consumers every day how important it is to conserve fuel. "

The price of gasoline already reflects its supply (and demand) and reminds us of this every time we pull up to the pump. Remember high school economics? Why would we need to tax it further and then hand this money over to the government? Are they going to use this tax money more wisely than the private sector?

Take a look around at the condition of our roads and this will give you a good idea of what would be done with that money. In Illinois we just spent tens of thousands of dollars removing the governor’s name from road signs that cost hundreds of thousands to install. All paid for with our hard earned money. Please, no extra gas taxes. Bad idea.