On the 23rd of this month I will have completed 20 years in broadcasting, and this coming December will mark the 40th anniversary of my first job in the automotive industry. Today the automotive "experts" love to discuss how much the industry has changed in recent years, but they credit the Internet and so on for helping buyers decide what they want before visiting a dealer to buy their next car. Personally, I've never fully bought into that "expert" opinion.
Forty years ago credit unions would fax clients pages out of the NADA Used Car Guide, spelling out both wholesale and retail prices for the vehicle they wanted. You could purchase a book of new car wholesale prices at any 7-11 store. As for photos and reviews of new cars coming to market, most of those who wanted more information simply bought the latest issue of Car & Driver or another enthusiast magazine. So yes, while all that information can now be found online, it was always there - and easily available - in the past. Nothing has really changed at all, except the speed and cost of acquiring that information.Financing and Customer CareThen too, everyone seems to believe that customer service is something new that dealers provide to car owners; but taking care of one's customers was just as important 40 years ago as it is today. Of course, there'll always be a few who toss the new car's keys to the client and forget both, but that certainly wasn't the norm four decades ago.In fact, it was even more critical to keep owners happy in the mid-70s, because the average trade cycle for an American car buyer back then was only 27 months. The reason so many families changed automobiles so rapidly was the fact that the average car loan in 1973 was for only 36 months, and the average new car payment was only $115. So, for a career-minded salesperson in those days, it was imperative to look after your customers.If you did it well, your odds of selling them a used car within two years were very good - and the odds of selling them another new car within three years were exceptional. Certainly some didn't see, in those important facts, the value of following up with their successes for a payoff that wouldn't happen for a year or two. But to those who were career-minded, it obviously took less time and effort to create a long-term, two- or three-vehicle customer than it took to find that many new buyers and successfully sell them on your product.Unfortunately, time and economic history were conspiring to end that golden era of quickly returning car buyers. The First Energy Crisis forced auto manufacturers to extend finance periods to 42 months in 1974. The idea of lowering someone's car payment, thereby encouraging them to trade in more quickly, proved true to a great degree. But the same short-sightedness that extended finance terms to help "sell someone today" also made it take too long for the customer to build enough equity in the vehicle to trade easily 27 - 30 months out.When financing extended to 48 and then 60 months with the Second Energy Crisis, customers simply couldn't trade their vehicles as quickly as they had in the past. Likewise, in recent years 72- and 84-month financing have appeared. That's done as much to increase the average age of a car on the road to 11 years as the greatly improved quality of all cars introduced in the past 12 years has accomplished.Evolutionary ResponseAs stated in previous columns, the day of consumer electronics was about to dawn then, too. In 1974 the finest TV one could own was a 21-inch color console; VHS and Beta tape players, microwaves and personal computers and the Walkman® were still to come. So the car industry was blindsided within six years, when a whole slew of new consumer toys would vie for the interest - and discretionary income - of potential car purchasers.But during that period cars did, albeit at the pace of evolution, change. In 1974 the Oldsmobile Omega advertised at $3,495 didn't have air conditioning or power steering. That didn't matter to most bargain-basement buyers at the time. After all, it was only in 1970 that half of all new cars sold in America came with factory air conditioning.The year 1974 did mark when tilt wheel and cruise control in cars took off, but not because of any great customer demand. No, General Motors was so determined to make that a "must have" option package that for two years they paid dealership managers $50 for every car they ordered with it installed. By then the public, seeing a tilt wheel and cruise control on almost every GM vehicle, couldn't imagine buying a car without it.As for the $115 option on GM cars for electric windows and power door locks, that was an extravagance that most buyers believed they would do without. We take this for granted now, but how many remember that in those days one had to adjust sideview mirrors manually? Easy enough to do on the driver's side of the car, but almost impossible to get right leaning hard across the passenger seat. Or how about that AM/Eight-track stereo in so many GM cars? The stereo effect was wasted because there was only one speaker in the center of the dashboard. In 1974 radial tires were an option that cost only $150, but not one of us salesmen, or any customers, knew just how superior those tires were to the cheap bias-ply tires that came standard on every vehicle.It may amuse you to know this: The biggest thing to ever create a wave of buyers flooding into showrooms to get the latest and greatest thing in automotive transportation was the rectangular headlights GM added to its vehicles in 1976.It would be 15 years before the average V-6 had the same horsepower that the GM 350 cid V-8 had in 1975 - while doubling the V-8's fuel efficiency. And it took another 15 years for the average four-cylinder attained the same horsepower as that 1975 GM V-8, but again it almost doubled the mileage.It would take until the late 80s before car stereos fulfilled the promise they had shown in 1975, and the widespread introduction of air bags would come in that same period. We had an airbag option at GM in 1975, but you couldn't give them away.Radial tires became standard on everything with the Second Energy Crisis, and soon thereafter most people purchased their cars with power windows and door locks. The Japanese taught us the value of anti-lock brakes in the mid-80s, starting with Acura; but it would take another 20 years before all automakers would put them on their vehicles.Unnecessarily MediocreOver a 40-year period we went from what, in hindsight, were mediocre and primitive automobiles - not much different from what our parents drove in the 1950s - to what we have today. But other than the computerization in today's engines, there's little cars offer today that couldn't have been put into the vehicles we sold 40 years ago.Today's automotive engineers often cite the 1976 Honda Accord as the turning point for modern vehicle engineering and production, because it showed how engineering could create a flawless body style with expensive looking paint and trim for very little money. And airbags and anti-lock brakes were around all those years ago, as were exceptional stereos, radial tires and all the power equipment options we now demand as standard equipment.Back then we didn't demand all those features as salespeople, mostly because our customers weren't demanding them. No, they thought that rectangular headlights instead of round ones would be all the change they wanted or needed in their next automobile. As a result, the evolution of the automobile has taken 40 years instead of 10.Best New Feature: CostsThe automotive evolution has happened so slowly, in fact, that few have noticed the very positive upturn in advantages to owning a new car. Here's why.Adjusted for wage inflation, the average new car today costs almost the same as it did in 1974. As for safety, we're driving faster than ever and more miles per year, yet the number of automotive fatalities has dropped from 4.12 people per 100 million miles driven in 1973 to just 1.1 today.Today's average four-cylinder engine can go 0-to-60 faster than that old GM V-8 - and, instead of 12.9 mpg highway, often delivers 39 -40 mpg on the road. Using the 1974 Cutlass @ 12.9 mpg and the 2013 Mazda3 @ 40 mpg, driving 15,000 miles per year and adjusting the 1974 gasoline price for inflation, the Cutlass would require $2,777 worth of gasoline, while the Mazda would use only $1,421 worth.That's right; even factoring in today's high gas prices, a new car's net cost is less that all those years ago. That benefit back then would have been more greatly appreciated than any other.© Ed Wallace 2013Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism, given by the Anderson School of Business at UCLA, and is a member of the American Historical Association. He hosts the top-rated talk show, Wheels, 8:00 to 1:00 Saturdays on 570 KLIF AM. E-mail: wheels570@sbcglobal.net, and read all of Ed's work at www.insideautomotive.com.Have more to add? News tip? Tell us
