Plot Summary
The End of Detroit
Micheline Maynard
The End of Detroit
Nonfiction | Book | Adult | Published in 2003
Plot Summary
In The End of Detroit: How the Big Three Lost Their Grip on the American Car Market (2003), The New York Times automotive writer Micheline Maynard analyses how America’s Big Three car manufacturers have lost nearly 50% of the market share to German, Japanese and Korean brands. Critics received Maynard’s book as “an intriguing if somewhat gloomy view of the American car business” (Publishers’ Weekly).
Maynard surveys the state of the US car industry. It is clear even to the average driver that the dominance of the Big Three—Ford, Chrysler, and General Motors—is over. In California, imports make up a majority of the cars on the roads. In Texas, where Ford and Chevrolet trucks used to dominate, younger drivers are turning to imports. Even in Michigan, the home of the US car industry, large dealerships sell imported cars.
By 2003, statistics emerged supporting the driver’s-eye view of an American collapse. It was the first year Toyota outsold Chrysler (now owned by German-American company Daimler-Chrysler in any case). Despite two years of desperate rearguard measures by American car manufacturers, their market share dropped to 57%, the lowest ever.
Maynard zeroes in on the rise of Toyota, examining the failures on the part of Big Three companies, which made way for the Japanese brand to triumph. Toyota’s rise began in the 1970s, when the Japanese car brand found a niche in fuel-efficient, cheap-to-run cars. Maynard praises Toyota’s innovative and strategic efforts to gradually win over a larger American consumer base. For example, the company built plants in the US and trained local employees. Many Spanish-speaking employees were later able to work in Toyota plants across Latin America.
Today, Toyota competes in every niche, from trucks to SUVs, offering the same power and performance as American cars. The company’s vision is to become the world’s largest car manufacturer, and Maynard argues that this outcome seems inevitable.
Toyota is far from being the only threat to the US car industry, however. “With the exception of Toyota and its expansive lineup, none of the import companies has designs on meeting Detroit head-on in every segment where it competes…They can be successful by fixing their targets and taking away markets, one by one."
Although Toyota and Honda are often "mentioned in the same breath—Toyota-and-Honda, all run together—as if they were one big company instead of two,” Maynard points out that they are actually very different companies with very different strategies. Rather than compete for every corner of the US consumer base, Honda builds cars for a small but fanatically loyal group of customers. One of these customers is General Motors, which uses Honda engines in its own cars.
Korean brand Hyundai has captured the lower end of the market with small, inexpensive cars, and Nissan—another Japanese brand—addresses yet another niche with its attractive, high-performance vehicles.
Meanwhile, the Big Three’s response has been slow and lumbering. Across the board, the Big Three continued to produce unreliable and inefficient cars, failing to change as consumers’ needs changed and as competitors outflanked them. Maynard traces this failure to a corporate culture of insularity and hubris. Arrogantly believing that their dominance could never be challenged, the Big Three manufacturers doubled down on macho looks and powerful performance. Their trucks and SUVs offered them a high-profit margin, but they didn’t offer anything new to American consumers. Rather than improve their products, the Big Three tried to innovate through marketing gimmicks like rebates and 0% financing. When it didn’t work, they blamed regulation and foul play by competitors—in short, everyone but themselves. As a case study, Maynard focuses on Ford’s failures to update its Taurus, which caused the company to lose the no.1 sales position to Toyota’s Camry.
Throughout the book, Maynard reinforces her case with interviews, including discussions with Toyota’s Fujio Cho, Nissan’s Carlos Ghosn, Chrysler’s Dieter Zetsche, BMW’s Helmut Panke, car designers, engineers, test drivers, and owners. At the end of the book, Maynard draws on one of these interviews to look ahead into the future. She recounts a recent lunch she had with Robert Lutz, a GM executive poached from Chrysler with a specific mission to reignite consumer passion for GM’s products. Maynard asked Lutz which car he wanted buyers most to associate with GM: "Lutz unhesitatingly chose the Chevrolet Corvette." The Corvette—a low-slung, powerful sports car most popular with retired people—is unlikely, Maynard points out, to outsell the Toyota Camry.
By 2010, Maynard predicts, the US car manufacturers’ share of the domestic market will have dropped to just 50%. That would equate to a loss of 40% market share since the 1960s. She wonders whether all three of the Big Three will even survive. Either way, the marketplace will resemble Europe’s, with more than ten strong companies competing for smaller slices of the consumer base.
Maynard surveys the state of the US car industry. It is clear even to the average driver that the dominance of the Big Three—Ford, Chrysler, and General Motors—is over. In California, imports make up a majority of the cars on the roads. In Texas, where Ford and Chevrolet trucks used to dominate, younger drivers are turning to imports. Even in Michigan, the home of the US car industry, large dealerships sell imported cars.
By 2003, statistics emerged supporting the driver’s-eye view of an American collapse. It was the first year Toyota outsold Chrysler (now owned by German-American company Daimler-Chrysler in any case). Despite two years of desperate rearguard measures by American car manufacturers, their market share dropped to 57%, the lowest ever.
Maynard zeroes in on the rise of Toyota, examining the failures on the part of Big Three companies, which made way for the Japanese brand to triumph. Toyota’s rise began in the 1970s, when the Japanese car brand found a niche in fuel-efficient, cheap-to-run cars. Maynard praises Toyota’s innovative and strategic efforts to gradually win over a larger American consumer base. For example, the company built plants in the US and trained local employees. Many Spanish-speaking employees were later able to work in Toyota plants across Latin America.
Today, Toyota competes in every niche, from trucks to SUVs, offering the same power and performance as American cars. The company’s vision is to become the world’s largest car manufacturer, and Maynard argues that this outcome seems inevitable.
Toyota is far from being the only threat to the US car industry, however. “With the exception of Toyota and its expansive lineup, none of the import companies has designs on meeting Detroit head-on in every segment where it competes…They can be successful by fixing their targets and taking away markets, one by one."
Although Toyota and Honda are often "mentioned in the same breath—Toyota-and-Honda, all run together—as if they were one big company instead of two,” Maynard points out that they are actually very different companies with very different strategies. Rather than compete for every corner of the US consumer base, Honda builds cars for a small but fanatically loyal group of customers. One of these customers is General Motors, which uses Honda engines in its own cars.
Korean brand Hyundai has captured the lower end of the market with small, inexpensive cars, and Nissan—another Japanese brand—addresses yet another niche with its attractive, high-performance vehicles.
Meanwhile, the Big Three’s response has been slow and lumbering. Across the board, the Big Three continued to produce unreliable and inefficient cars, failing to change as consumers’ needs changed and as competitors outflanked them. Maynard traces this failure to a corporate culture of insularity and hubris. Arrogantly believing that their dominance could never be challenged, the Big Three manufacturers doubled down on macho looks and powerful performance. Their trucks and SUVs offered them a high-profit margin, but they didn’t offer anything new to American consumers. Rather than improve their products, the Big Three tried to innovate through marketing gimmicks like rebates and 0% financing. When it didn’t work, they blamed regulation and foul play by competitors—in short, everyone but themselves. As a case study, Maynard focuses on Ford’s failures to update its Taurus, which caused the company to lose the no.1 sales position to Toyota’s Camry.
Throughout the book, Maynard reinforces her case with interviews, including discussions with Toyota’s Fujio Cho, Nissan’s Carlos Ghosn, Chrysler’s Dieter Zetsche, BMW’s Helmut Panke, car designers, engineers, test drivers, and owners. At the end of the book, Maynard draws on one of these interviews to look ahead into the future. She recounts a recent lunch she had with Robert Lutz, a GM executive poached from Chrysler with a specific mission to reignite consumer passion for GM’s products. Maynard asked Lutz which car he wanted buyers most to associate with GM: "Lutz unhesitatingly chose the Chevrolet Corvette." The Corvette—a low-slung, powerful sports car most popular with retired people—is unlikely, Maynard points out, to outsell the Toyota Camry.
By 2010, Maynard predicts, the US car manufacturers’ share of the domestic market will have dropped to just 50%. That would equate to a loss of 40% market share since the 1960s. She wonders whether all three of the Big Three will even survive. Either way, the marketplace will resemble Europe’s, with more than ten strong companies competing for smaller slices of the consumer base.