Perhaps the biggest factor that’s propelled foreign automakers ahead of Detroit’s dynamic duo is the overall value that foreign autos offer. Gas mileage is one factor that goes into a female buyers’ purchase decision, and in 2012, foreign companies selling cars in the U.S. didn’t disappoint. The annual corporate average fuel economy, or CAFE, index which measures fuel efficiency across a brands’ entire line of vehicles and is compiled by the U.S. government revealed that Honda Motor Co Ltd (ADR) (NYSE:HMC), Toyota Motor Corporation (ADR) (NYSE:TM), and Nissan all came in well ahead of Ford and GM. Point No. 3: Female buyers want good value for their money.
Is Detroit taking the right steps?
Don’t get me wrong, Ford Motor Company (NYSE:F) and GM aren’t twiddling their thumbs when it comes to female buyers, but they aren’t doing nearly enough to target this potentially multibillion-dollar audience.
Domestically Ford has had success with the reintroduction of the subcompact Fiesta while GM’s Chevy line has reengineered its Malibu to target a growing population of female buyers. Still, much is left to be done domestically and globally to target female car buyers.
I feel advertising is one area where Detroit has to resonate with female buyers. Focusing on practicality and fuel efficiency and less on power would be one way Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) can better connect with prospective buyers.
Another key point — and this rings especially true for Ford which is growing like a weed in China — is that the middle class in emerging market regions like Southeast Asia, Eastern Europe, and in parts of South America are still rapidly growing, even if Western Europe and the U.S. have mostly stalled. Although men are the predominant buyers in these countries, we’re also seeing more women than ever rise into the middle class. It’s just a matter of time before these women become core customers such as they’ve become in the U.S. marketplace.
Finally, Detroit automakers need to regain the trust of the female buyer. American cars are often viewed as less reliable than foreign cars. It maybe that General Motors Company (NYSE:GM)’s recent bankruptcy still looms in buyers’ minds, or the fact that U.S. auto warranties aren’t up to par, but female buyers are skeptical of purchasing American-made automobiles. Whether it’s by beefing up their warranties or beating foreign car companies on a combination of price and fuel efficiency, Ford and GM are going to need to step up their game even more than they already have if they really hope to drive over the competition.
The article This Is Ford and GM’s Biggest Missed Opportunity originally appeared on Fool.com and is written by Sean Williams.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of, and recommends, Ford. It also recommends General Motors.
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