Design and the Big Three

The struggles of the American car company are well documented. Government bailouts in 2009 saved GM and Chrysler and helped Ford indirectly. But Detroit's automotive revival is building up speed and credibility as a sustainable achievement because it's fueled, not by the huge rebates or low-margin fleet sales of yesterday, but by cars that people actually want to buy, cars that are designed better and for which design has been a central focus.

Ford learned the hard way the role that design can play. Founder Henry Ford stubbornly kept the original Model T unchanged until well into the 1920s, “in any color they want, as long as it’s black.”

Alfred P. Sloan, chairman of fast-growing General Motors saw an opportunity and offered an array of colors. He also hired Harley Earl to become the industry’s first director of design. Earl introduced the use of sculpted clay models to develop and refine automotive designs and, in 1939, his “Styling Division” rolled out the first true concept car, the Buick Y-Job.

That strategy continues today. A variety of concept cars, trucks and crossovers were on display at the 2012 Detroit Auto Show, including a prototype of the re-envisioned Acura NSX, which returns to production in 2014. They also recently introduced a complete re-do of its Fusion sedan, which will go up against the Camry when it comes to market. The Fusion has already won a significant endorsement of its own, honored as the Eyes on Design Production Car design award at the Detroit Auto Show by a panel of two dozen automotive stylists. Design alone is a key reason why Rebecca Lindland, research chief for IHS Automotive, is betting that design “could help the Fusion become the best-seller” in the midsize segment.

Because of this revived focus on design by the Big 3, Detroit is beginning to beat foreign car companies at their own game and winning back market share and consumer loyalty. In June 2010 a J.D. Power's initial-quality survey showed domestic models did better than imports for the first time in the 24 years the firm has done the survey. Ford models ranked fifth overall, behind four luxury brands. Buick, Cadillac, Chevrolet and Chrysler all came in above average. Standout designs for many of the Big 3’s other cars are helping fuel that resurgence. The redesigned Chevy Camaro, Ford Mustang and Dodge Challenger have brought the muscle-car back with a vengeance, and the cooler-looking and more fun to drive Chevy Traverse and GMC Acadia are taking a big bite out of the Mommobile minivan market. By last year  Consumer Reports' list of the most "buzzworthy" 2011 models included five domestics, and four for those are small cars— once Detroit's biggest weakness.

Car makers are thinking outside of the box and also taking roads already paved by companies like LocalMotorss. General Motors is focusing on increased collaboration, transparency, and responsibility between automakers, cars, and their drivers. At recent auto shows, GM showcased two new concept vehicles aimed at, the TRU 140S and CODE 130R. These two cars are aimed at the needs of younger buyers who want to be connected with both their automobile and their peers, GM plans to involve the target audience in the actual design process of the vehicles by crowdsourcing feedback on concepts and interior design. General Motors North America President Mark Reusssaid, “These two concepts interpret that vision for a new generation. We’re seeking out our newest customers’ opinions, listening to their advice, and engaging them in new ways.”“Young customers tell us they want functionality with coupe-like aesthetics. Both the Code and Tru body styles resonated with this audience,” said Frank Saucedo, director of the GM North America Advanced Design studio in Los Angeles.

So what does all of this mean? Good design is being credited with helping carmakers gain market share and increase profitability in an industry that’s recovering from one of its worst recessions in decades. “It’s the difference between a short-order cook and a great chef,” said Freeman Thomas, the head of advanced design for Ford.

General Motors Co. (GM) has regained its spot as the world’s largest automaker, car companies are hiring and Michigan had the second-best performance on the Bloomberg Economic Evaluation of States in the third quarter. In fact, all three U.S. automakers were profitable in 2011. That's something that hasn't happened since 2004. And KPMG's survey of 200 top auto executives from around the globe show that most expect global market share gains at GM, Ford and Chrysler owned Fiat Group over the next five years. "It's a remarkable turnaround in quite a short period of time," said Gary Silberg, national automotive industry leader for KPMG. "We're really amazed by it." "In terms of profitability and outlook, this is the best conditions we've had for the US auto industry in a long, long time," said Jesse Toprak of TrueCar.

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