projoCars
In Detroit area, loyalty to Big Three is slipping away
01:00 AM EDT on Wednesday, July 16, 2008

Ken Duneske, sales manager at LaFontaine Toyota, surveys the scene at his dealership in Dearborn, Mich. Sales at LaFontaine have increased 31.3 percent this year. By June, Duneske was virtually sold out of Camry, Corolla, Yaris and Prius cars.
MCT / Regina H. Boone
DETROIT — Bob Page, 60, remembers when hatred of Asian cars was so strong that the windows of his suburban Detroit Toyota dealership were shot out.
These days, even in the midst of an industry-wide sales slump of historic proportions, attitudes against Asian vehicles appear to be declining. Page — and some UAW members — say automotive layoffs and wage reductions in Michigan are eroding even metro Detroiters’ powerful loyalty to domestic brands.
“We are now on the radar screen of a whole group of people that in the past, because of those family pressures and the purchase plans, would never consider us,” said Page, a dealer since 1970.
From April through June, Toyota’s 10 dealerships in metro Detroit sold 3,063 vehicles, an increase of about 4 percent from last year. During that period, sales declined by 1 percent in Toyota’s Midwest region, which includes Michigan, Ohio, Kentucky and Tennessee.
Many factors are driving Toyota’s local surge. They include gas prices that have topped $4 a gallon and Toyota’s fuel-efficient cars, its reputation for durability and easy comparisons with its historically tiny market share.
But this year, Page said he has noticed an increase in customers who no longer qualify for the domestic automakers’ family and friends discount plans, which he speculates is tied to recent job cuts.
From 1999 to 2006, Michigan lost 108,200 motor vehicle and parts manufacturing jobs, according to the Bureau of Labor Statistics. And just since 2005, General Motors Corp. reduced its work force by 34,410 hourly workers, and Ford Motor Co. has cut 32,800.
“I believe that we should buy American, and we should support each other,” said UAW member Tiffany Gardner, 33, of Detroit. “Then again, look at all the American companies. They are saying it’s American-made, but they are taking their companies overseas. They are not supporting us.”
Three or four years ago, Gardner said, she noticed an increase in UAW members buying foreign cars and driving them to work at American Axle & Manufacturing Inc.
There, she also dealt with the three-month strike that resulted in lower wages after the company threatened to move production to Mexico.
“We’re loyal, but I don’t see where they are being loyal,” Gardner said.
UAW Local 235 President Bill Alford marveled at Honda Motor Co., which makes lawn mowers and motorcycles. He said domestic automakers missed opportunities to diversify — and are paying the price.
“They are downsizing and sending jobs overseas,” Alford said. “You can’t basically dump on your employees and then expect them to have loyalty to a company that is not loyal to them.”
There is also the issue of defining American-made vehicles in an era where Toyota, Honda, Nissan Motor Co. and Hyundai Motor Co. all operate assembly plants in the United States.
On July 1, Cars.com unveiled its semiannual American-Made Index, which ranks the most-American vehicles based on the percentage of parts made domestically, location of vehicle assembly and how popular each car is with U.S. buyers. While the Ford F-150 pickup was ranked first for the fifth time in a row, the Toyota Tundra pickup ranked fifth, and the Toyota Sienna minivan ranked sixth.
The UAW has a Web site, UAW Made, that lists vehicles produced by its workers.
The Toyota Corolla, the best-selling vehicle in the United States in June, is made by UAW members at a GM-Toyota joint venture plant in California. It is also made at a nonunion plant in Canada and other foreign locations.
While attitudes are easing for some, opinions continue to run deep for many.
“It still is sensitive, and we have to be careful what we say, especially here in Detroit,” said Jim Tuohy, general manager of Serra Toyota in nearby Farmington Hills.
In April, dealers sold 1,062 Toyota and Scion vehicles, a 36 percent increase from last year. In May and June, dealers say they probably could have kept up that pace, but inventories of small cars were depleted. Sales declined 6.7 percent in June.
Ken Duneske, sales manager at LaFontaine Toyota in Dearborn, said sales at his dealership have increased 31.3 percent this year. LaFontaine sold 466 vehicles through June 24, up from 355 last year. By June, Duneske was virtually sold out of Camry, Corolla, Yaris and Prius cars.
“What’s left is anything that is V6 and anything that gets 12 miles per gallon,” Duneske said.
Carl Galeana, president of Galeana Automotive Group, said he is not surprised that Toyota is growing locally.
“They have fuel-efficient vehicles. They don’t have excess SUVs,” said Galeana, whose company sells Saturn and Dodge vehicles in Michigan.
Other Asian automakers are also thriving in metro Detroit. At Fischer Honda in Ypsilanti, sales increased 30 percent in June compared with last year.
“For years, people wanted to know about interest rates,” when car-shopping, said owner Rick Fischer. “Now, they come in and they want to know about gas mileage.”
Collectively, Honda’s 13 dealers in metro Detroit sold 1,374 Hondas and Acuras in June, a 1.3 percent increase. That increase almost mirrored Honda’s national sales, which increased 1.1 percent in June.
Doug Fox, owner of Ann Arbor Automotive, said sales at four of his dealerships have easily outpaced last year’s sales.
Sales at his Mitsubishi dealership sales are up 30 percent, Hyundai is up 20 percent, Kia is up 17 percent and Nissan is up 15 percent.
“There is a definite shift occurring away from pickup trucks and larger sport utility vehicles, and the shift is coming our way,” Fox said.
Page said Toyota dealers struggled for years to move the sales needle in Detroit.
Nationwide, Toyota’s sales more than doubled, from about 1 million vehicles in 1995 to 2.3 million in 2005. But during that time, sales at Detroit’s Toyota dealers were stuck between 8,000 and 9,000 vehicles annually.
“We have been at about 2.5 percent market share for ages,” Page said.
Toyota’s market share in Detroit pales in comparison, for example, to what it is in Cleveland, where Japan’s No. 1 automaker commands 12.8 percent of the market. This year, Toyota’s Detroit market share hit 3 percent, and Page predicted Toyota dealers will break 10,000 vehicles for the year.
“It’s always been an uphill battle here in Detroit,” Page said. “Dealers in other parts of the country — I don’t want to say they are on autopilot — but it has been easier for them.”
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