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I remember being shocked in the 90s at finding out the Toyota Corolla had the highest value retention of any car according to the Kelly Blue Book. And then ther

I remember being shocked in the 90s at finding out the Toyota Corolla had the highest value retention of any car according to the Kelly Blue Book. And then there was the NUMMI joint-venture of Toyota and GM and the same exact cars that would come out of that factory would have different value retention. Obviously the GM car would depreciate more in value. Brand reputation clearly matters. https://en.wikipedia.org/wiki/NUMMI https://en.wikipedia.org/wiki/NUMMI Tesla has now taken over the NUMMI facilities.

dsfyu404ed 4y ago
Brand reputation is a positive feedback loop. Better reputation -> charge more money -> poorer people who are gonna use your product at 11/10ths and try and skate by with the bare minimum of proactive maintenance buy it less -> the average example on the road is in better condition for its age -> high end consumers go "hey those things are lasting well I'll buy one" -> your average customer is richer so you don't have to cheap out in as many places on your product -> GoTo(step 2). Of course the process needs to be kick started with a couple actual good products but once it takes off you're basically home free if you don't f it up. The whole "the same GM car deprecated more" makes for great online virtue points from fanboys but it's not exactly illustrative of anything that isn't well known to be from other factors. The versions of otherwise identical cars that are preferred by higher end consumers will hold value better because they get treated better and kept nicer resulting in higher value at any given age/mileage. You can see this trend in action if you cross shop badge engineered cars that are old enough that purchase price no longer has any bearing on price.
- kube-system 4y ago
  Yep. The opposite feedback loop is “big Altima energy”. The $1000 cheaper new cars become the preferred cars of those who don’t care or can’t really afford it, which end up being the cheapest and most abused used cars. Which end up on buy-here-pay-here lots. And repeat.
  - creaturemachine 4y ago
    I have to wonder if maybe it was the way GM and their dealers marketed these vehicles. The Prizm wasn't sold in my market so I don't truly know, but I think brand loyalty on the dealers' side saw them push customers to the more true-blue options like the cavalier. One doesn't have to spend long at your average street corner to see how that turned out for the customer.
    - kube-system 4y ago
      Yeah, it totally starts with marketing, and how manufacturers target their markets: https://jalopnik.com/nissan-is-going-to-pay-dealers-more-to-steer-customers-1846636646 https://jalopnik.com/nissan-is-going-to-pay-dealers-more-to-... Walk into a Honda/Toyota dealership and you'll probably be offered 48 or 60, and a short warranty to match.
swottler 4y ago
There's an excellent episode of This American Life about the NUUMI experiment and why it failed to change GM. https://www.thisamericanlife.org/561/nummi-2015 https://www.thisamericanlife.org/561/nummi-2015

dsfyu404ed 4y ago

Brand reputation is a positive feedback loop. Better reputation -> charge more money -> poorer people who are gonna use your product at 11/10ths and try and skate by with the bare minimum of proactive maintenance buy it less -> the average example on the road is in better condition for its age -> high end consumers go "hey those things are lasting well I'll buy one" -> your average customer is richer so you don't have to cheap out in as many places on your product -> GoTo(step 2). Of course the process needs to be kick started with a couple actual good products but once it takes off you're basically home free if you don't f it up. The whole "the same GM car deprecated more" makes for great online virtue points from fanboys but it's not exactly illustrative of anything that isn't well known to be from other factors. The versions of otherwise identical cars that are preferred by higher end consumers will hold value better because they get treated better and kept nicer resulting in higher value at any given age/mileage. You can see this trend in action if you cross shop badge engineered cars that are old enough that purchase price no longer has any bearing on price.

kube-system 4y ago
Yep. The opposite feedback loop is “big Altima energy”. The $1000 cheaper new cars become the preferred cars of those who don’t care or can’t really afford it, which end up being the cheapest and most abused used cars. Which end up on buy-here-pay-here lots. And repeat.
- creaturemachine 4y ago
  I have to wonder if maybe it was the way GM and their dealers marketed these vehicles. The Prizm wasn't sold in my market so I don't truly know, but I think brand loyalty on the dealers' side saw them push customers to the more true-blue options like the cavalier. One doesn't have to spend long at your average street corner to see how that turned out for the customer.
  - kube-system 4y ago
    Yeah, it totally starts with marketing, and how manufacturers target their markets: https://jalopnik.com/nissan-is-going-to-pay-dealers-more-to-steer-customers-1846636646 https://jalopnik.com/nissan-is-going-to-pay-dealers-more-to-... Walk into a Honda/Toyota dealership and you'll probably be offered 48 or 60, and a short warranty to match.

swottler 4y ago

There's an excellent episode of This American Life about the NUUMI experiment and why it failed to change GM. https://www.thisamericanlife.org/561/nummi-2015 https://www.thisamericanlife.org/561/nummi-2015