Daewoo may be on its way out of the U.S. market. But its Korean rivals, Kia and Hyundai, continue to make big sales gains. They are building a solid owner base with attractive vehicles, some selling for as little as $10,000.
Given the strength of the Korean foothold, the Big 3 might be tempted to give up on providing basic transportation to U.S. buyers. But Gary Cowger, president of General Motors North America, says his company must compete in all segments. And he says GM is trying to find a way to play in the low end of the market.
It's a smart idea - despite convenient excuses for not doing it. Profits are tough to find down there. The margins are much greater elsewhere. The ghosts of long-deceased Chevy Vegas and Ford Pintos and Dodge Omnis say don't bother.
But the benefits are too important to ignore.
First, Kia and Hyundai can offer a new car at prices usually associated with used cars. That puts new vehicles in the reach of many buyers who otherwise would settle for a used one. Who knows how many other buyers are looking for similar reasons to buy a new car instead of a two-year-old Buick or Toyota?
Second, there's loyalty. Yes, American consumers are fickle. But they can also be faithful. Cede an entire audience to the competition, and you may never see them again.
Finally, the Big 3 can't forget the potential for oil shocks. Gasoline prices won't stay low forever. Should the market shift quickly, the truck-dependent Big 3 could be as vulnerable as they were in the 1970s.
The Big 3 now have the tools - global platforms, global powertrains, established relationships with overseas partners - to muster an offensive at the base of the U.S. market.
In an era when product development is all about providing more for less, the entry-level vehicle is the ultimate test. It's time to go for it.