16 February 2013
The Downside of Reliability
According to a JD Power study released this week, cars (all brands) that are reaching market in the United States are getting increasingly reliable (the number of major problems is declining).
At first glance this is clearly good news for the consumer. Reliability has been a major point of competitive struggle throughout the history of the auto industry, in fact it was a major factor that allowed the Japanese automakers to gain such a strong foothold in the US market in the 1970s and 80s.
A clear downside of cars not breaking as often is the lack of consumer spending that will result as less people need to fix their vehicles. In a similar contradiction to the realization problem, no individual wants their car to break, but it benefits the rest of society economically when any given individual is forced to spend money.
In the current economic climate of uncertainty and low consumer confidence (ever since the collapse of 2008) discretionary spending cannot be counted on to lead recovery. Something like a broken car on the other hand, it seems a good way to force people to spend, perhaps even to go further into debt....Debt spending got us into our current mess, can it not lead the way out? People need vehicles to get to their job interviews.....or drive to the unemployment office. The less people have their cars break, the less they will be forced to spend fixing them. Maybe reliable cars will help to make consumers more confident to spend elsewhere? But for now, it seems recovery will not be lead by auto mechanics becoming wealthy.
The entire tone of this post is meant to be somewhat sarcastic. The bigger picture point here is that historically US consumer culture has been one of "consume and discard". Just perhaps, quality is starting to matter as much as novelty to Americans in the automotive industry?