California Dreamin'? Potential buyers check out the 2010 Chevrolet Camaro, parked here by a San Diego beach.

California Dreamin'? Passersby check out a 2010 Chevrolet Camaro, parked by a San Diego beach.

“Why would I even consider buying a car from Detroit,” says Leslie Hamilton, a successful author living in Seattle, “when I’ve been completely happy with my Toyota – and the one I had before and the one before that?”

It’s the same sort of question millions of other motorists keep asking themselves, nowhere more frequently than along the import-friendly East and West Coasts.  Unless and until Detroit’s Big Three automakers can come up with the right answer, their ability to stage a significant comeback will be limited, industry analysts warn.

“How to get through to people in those markets is our number one challenge,” says Bob Lutz, the 77-year-old General Motors vice chairman who recently decided to postpone retirement but shift his duties from product development to marketing.  “If I had the answer, I’d probably have done it yesterday.

The car crazy culture of California once openly embraced Detroit iron.  For decades, Cadillac was the ultimate symbol of success, both on and off the silver screen.  But these days, it’s an also-ran in a market that now thumbs its nose at even the most exclusive domestic-made models.

Significantly, Southern California alone accounts for 25% of all the high-performance AMG models sold worldwide by Mercedes-Benz.  And where only one in seven potential buyers along the West Coast would even consider a Cadillac, according to data from the consulting firm, AutoPacific, Inc., BMW is on the shopping list of one in three potential customers.

It’s not just high-line buyers who’ve shifted their purchases to the imports.  AutoPacific research reveals that nearly twice as many West Coast buyers – 57.8% compared to 30.2% — would shop for a Toyota rather than a Chevrolet.  Ford doesn’t do much better, with a consideration factor of 32.9%, and Chrysler is on the shopping list of just 10.1% of Pacific Coast car shoppers.

Data reveal that the Big Three have lost their appeal in much of the country outside the domestically-oriented Midwest.  That’s particularly true on the coasts.  European imports are particularly strong along the eastern seabord, while Japanese brands dominate from Seattle to San Diego.  But nowhere do Detroit makers face more problems than in California, the country’s single largest car market, where they have steadily lost ground for decades.

Exactly what triggered the shift is a matter of debate.  “Hippie-mobiles,” like the Volkswagen Beetle, were already gaining ground by the 1960s, especially in counter-culture communities like San Francisco.  The twin oil shocks of the 1970s put the emphasis on high-mileage Asian products.  And the Japanese firmed up their grip on the Golden State, in the 1980s, with their emphasis on quality and reliability, notes analyst Art Spinella, of CNW Marketing.

In 1987, only about 41% of California new car buyers would even consider a Big Three offering,according to CNW research.  By the end of the millennium, that had dropped to barely 30%, “as their traditional buyers died off,” said Spinella, collectively less than for Toyota alone.

“The bad quality of Detroit products, from 20 and 30 years ago, left a bad taste, and getting people back is going to be difficult,” adds Ed Kim, an analyst with AutoPacific.  The problem is all the more difficult, he says, because buyers like author Hamilton “have gone through generations of super-reliable Japanese cars…and don’t see a reason to switch.”

At least not yet, insist domestic auto industry officials, who hope to change minds by focusing on the improvements their products have made in recent years.  And those have been significant, particularly on the quality front.  The latest Initial Quality Survey, from J.D. Power and Associates, is one indication.  The various brands of Chrysler, Ford and General Motors scored a collective 10% improvement on the closely-watched quality study, which “outpaced (the) industry-wide improvement,” according to Power’s automotive research director, Dave Sargent.

That’s been echoed in a variety of other studies by Power and other firms, suggesting to CNW’s Spinella that, “There’s an opening in California and other coastal markets that Detroit hasn’t seen since the early 1970s.”

Indeed, his latest data show that Big Three consideration levels in California are now approaching the 40% mark, once again – though Spinella cautions that just because potential buyers might be looking at Detroit products, once again, doesn’t mean they’re going to buy them.

A challenge, he and other analysts warn, is getting shoppers to believe that recent improvements in quality are not temporary.  It will also require Detroit to “deliver products that are uniquely styled.”

For years, domestic makers seemed to underestimate the challenge, admits Fritz Henderson, GM’s CEO.  Big Three product planners seemed to believe that “good enough” was an acceptable mantra.  “We’re going to ban the word, ‘competitive’ from our product development vocabulary,” the executive declared, earlier this month, and focus on delivering vehicles that are “better than” the competition.

That’s the strategy taken by Hyundai, which has rebounded remarkably from its near-collapse during the 1990s.  The South Korean carmaker has posted huge improvements in product quality, over the last five years, backing those gains with a 10-year warranty.  It has also launched a series of models designed to overcome its reputation for cheap-and-cheerful products – the new Genesis luxury sedan earlier this year earning kudos as North American Car of the Year.

But it takes years to overcome a bad reputation, concedes GM’s Lutz.  And it doesn’t help to have your company go through a much-publicized bankruptcy, something that industry analysts contend has been a serious setback for both General Motors and Chrysler.

Initially, the vast majority (of California car buyers) fled from considering a brand considering bankruptcy,” Spinella says CNW surveys revealed.

Things are improving, the researcher adds, now that the two domestic makers have successfully made it through the bankruptcy process.  And, if anything, Ford has actually benefitted from the headlines of recent months by publically proclaiming its ability to survive without a federal bailout.

“I hear really good things about Ford,” says Joe Garcia, a manager at a hotel in Laguna Beach, California.  “And I’m hoping that GM will be able to turn things around, too.”

There are a few signs of success.  The new Chevrolet Camaro, for one, is sold out, nationwide, and demand has been unusually strong in California.  Ford is hoping to score a similar hit when it launches its Fiesta subcompact, in 2010.

But few observers expect the coastal markets, California in particular, to abandon the imports any time soon.  The gains are likely to be slow and incremental, warns AutoPacific’s Kim.  But they’ll be critical nonetheless.  Detroit can’t survive, long-term, simply by holding onto its Midwest fortress.

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