Re: Why is Ford's resale value poor? A Car's resale value depends on its reputation and percieved goodwill.
How long does a car last in years or Kilimeters relatively trouble free.
Cost and availability of spares
The Bata ka Joota comparision theory which is unique to India and a yardstick of measurement so often across products.
Size of the car for sure as mentioned earlier.
Fuel efficiency for sure.
By reputation, the Japanese cars led by Toyota and followed by Nissan, Honda, Mitsubishi, even Mazda, Isuzu and Subaru have shown, Suzuki, which is Maruti included :
Technical superirity in terms of reliablility of engines and drive train systems
Good fuel efficiency
Low break down history
High sales volumes
Mass production hence low production cost
high sales volumes thus easy availability of spares and aftermarket spares
Another factor is that about five years of use what is the condition of the paint, body plates, chassis, interior, electricals, how has it sustained the normal wear and tear.
This is where the Japanese cars top while the American cars fail.
A five year old Toyota Camry will look much better than a Chevorlet Lumina. And if delved deeper will have had a much cheaper maintainance record.
Why this has happened - basic design and sales strategy.
An American car was designed for one owner who bought a new car every three years. Americans thought they are in the business of making cars.
The Japanese thought they are in the business of making cars but they are in the people logistics industry.
So an affordable car, low initial ownership cost, solid built, a wow driving experience, easy on gizmos but accurate functional features would win. This theory believed that a car should serve the first owner for five years and the second owner for another five and perhaps a third for three.
From day one it was a car designed for 13 years, not 3 years.
In 13 years the firm would have sold 3 cars instead of one. One to first owner, second to first owner as new car after five years, and a third in spares over 13 years.
Which business proposition is better ?
Look at a Prado and a Ford explorer. After 3 years the Prado will be shining, all rubber linings perfect, doors closing properly, ac perfect.
Look at the Ford explorer. Headlights absolutely abrazed, engine heating, electrical failures, rubber seals loose and hanging, interior sagged, suspension sqweaking.
The difference is obvious.
If a guy buys a Toyota Corolla and maintains it well. After five years he will sell it for about 50 to 55 % of itspurchase price.
In the five years his income from salary would have gone up by 10 % per annum.
If the Corolla has served him well after five years what will be the replacement car ? Will not a Camry or Landcruiser Prado GX win hands down over the competition or will it not be a Pajero which sells in most market about 10 % higher than a Camry.
This is the logic.
A Ford Ikon, Escort or Fiesta was never quite in the league of a Honda or Toyota or Nissan from day 1 in quality, technology, drive train systems, finesee, electricals, sturdiness, so obviously the resale price of a ford, Jeep, chevvy, chrysler, dodge, lincon, mercury, buick, pontiac, renault, pegueot, citroen, skoda, yugo, fiat, rover, vauxall, opel will obviously be lower.
BMW and Mercedes have maintained very high design and techical standards from day 1 so here too resale is good and there is frequent upgrade from a 3 series to 5 or 7 or from a E230 to an S 350.
In my personal case my first european car a Lancia Delta Intergale went to warranty repairs a record 14 times to the dealership Al Ghandi motors. Who can spare such time and energy.
Look at the luxury segment. Outside of USA Owners of Cadillacs, Crown Victoria, Mercury Grand Marquis, Lincon Navigators, Jaguar never really return to buy the same car again. Once bitten twice shy.
But owners of Lexus, BMW and Mercedes frequently buy a second, third, fourth same car and perhaps leave the prvious one at home as well for the Mrs.
Last edited by desertfox : 23rd July 2013 at 16:15.
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