> car makers are incentivised to try to ensure their vehicles have decent resale value
Is this actually true or merely a theoretical thought? Because it would seem that car makers are incentivised to ensure their vehicles annihilate a couple days after their warranty expires and/or after a couple of miles after their guaranteed mileage is driven, and comparing e.g. reputation of second-hand cars manufactured in 80es/90es/2000s/10s seems to support it.
One of the tactics Nissan ran into big trouble with was their extreme reliance on fleet sales. Fleet sales juiced the profits but killed the used market, thus pushing Nissan's cars down market thanks to reduced resale value. This was an active criticism by investors and journalists during the Nissan down turn.
Meanwhile Toyota is able to charge a meaningful premium because their cars retain value. So I do think it is safe to conclude in the case of cars the effect is real.
You came sooooo close to hitting the nail on the head. The first owners have a huge effect on a resale value of a vehicle.
Who buys Toyotas?
Why are those people's cars more valuable on the used market than corporate fleet's used cars?
Now see if your model explains the used value of a Dodge Journey, oilfield pickup and whatever car grandma owned.
Nissan spend the '00s selling to owners who's used cars are not held in high regard and this affected consumer perceptions of them. Toyota spent the 90s and '00s (and still is) selling to upscale people who treated their cars nicely and it affected consumer perception of them.
I'm not so sure. I bought my car mostly to minimize total-cost-of-ownership. I assume I'll resell my car when the TCO of maintenance exceeds the TCO of a new car.
I know a lot of other folks who do something similar to that too.
TCO includes my time, so if I need to take a car to the shop, or miss meetings because things break down, that raises TCO by that opportunity cost. Selling a car is a hassle, and by the time I'm ready to give it up, it's not worth too much (and the buyers will probably be poor, since TCO exceeds a new car) so I don't feel the need to maximize resale value.
While this is an overly rationalist way of phrasing things, but most people I know take a similarly pragmatic approach. Teachers. (Real, not software) engineers. Etc.
I don't buy used cars, since some people sell to upgrade, and some sell because there's some issue. The headache adds a lot to the TCO.
There's also material differences, there's a reason the Nissan CEO from that era is currently a fugitive and on trial for financial misconduct.
And not by some technicality either, he literally hired a paramilitary group to disguise themselves as musicians and smuggle him out of Japan while on bail.
Since 2001 Nissan has used their defective CVT transmission in the vast majority of their lineup from the compact Versa to the Pathfinder SUV (aside from the sports cars and pickup trucks).
The average time to failure depends slightly on the model, but it's often around 60-70k miles.
The cost to replace it is typically most if not more than the value of a typical Nissan.
Because they were selling defective cars, their buyers dried up, so they had to resort to buyers with sub-prime credit. At this point it's joked the Nissan Altima is the official car of bad credit or bad neighbourhoods.
While the poor upkeep by the sub-prime owners certainly doesn't help, the poor resale value is largely due to everyone knowing they are ticking time bombs.
I've shopped for many different used 10-15 year old cars, and through my research have found the used market is extremely accurate in pricing in expected upkeep or failures, even among different variants of the same model from the same brand.
When I wanted an W211 E-class Mercedes (2003-2009), I researched the common failures and the cost to repair. I found the whole range was actually priced pretty similarly once you factored that in.
There were major defects in the 2003-2004 models which would cost around $2500 to fix. The 2005+ models were worth about $2500 more than a 2004 (despite only being worth $5000 and $7500)
The E500 had an air suspension failure issue which would be around $2000 to remedy, the same model year E320 with normal suspension was worth $2000 more. And for 2003-2004 they were only worth $3000 and $5000 respectively.
After months of browsing craigslist and test drives, it was clear it didn't matter which model or year I bought, a Mercedes W211 E-class was going to cost me $7500.
At that point I figured I'd just keep saving and get a Lexus 2IS for $10,000 as it was much better value despite the difference in owner reputation.
tldr: The used market knows exactly what a car is worth regardless of owner reputation. Nissans are worthless because they're shit cars.
Until Masayoshi Son & friends face the music, or the convincion rates drop from a comical 98%, I'm inclined to believe this was entirely politically motivated.
>Is this actually true or merely a theoretical thought?
On one hand you have FCA (I'm sorry, Stellantis) which leans into its not so positive reputation and does just fine.
The other hand you have Toyota who spend the 90s and 00s digging a goodwill moat in the minds of premium consumers.
Both approaches work but for different demographics. You'll never see a 4Runner with a magnetic company sticker sitting in an industrial parking lot or in less well off part of town and you'll never see a Pacifica in an upscale suburban driveway.
> Both approaches work but for different demographics. You'll never see a 4Runner with a magnetic company sticker sitting in an industrial parking lot or in less well off part of town and you'll never see a Pacifica in an upscale suburban driveway.
Huh? Pacificas are everywhere, especially since they also have the only PHEV minivan in the US. In the PHEV Pacifica FB group I'm in (I do own one, so I am a bit biased here), many people have Pacificas alongside Teslas and other EVs. But even the gas Pacificas are everywhere, including "upscale suburban driveways".
Though your point does still stand about FCA/Stellantis' reputation: we had to get over their our perception of them when we got ours, and I would never consider any of their other vehicles. But our Pacifica has been a really great van. I'm just amused that you picked the one vehicle in their entire lineup that doesn't prove your point.
I wanted to say Dodge Journey but they don't make that anymore and it wasn't really a popular fleet vehicle. The nature of the comparison I had to make kind of forced my hand. The Pacifica (minivans in general, too much $$ new) doesn't scream negative equity nearly as loudly as the Journey.
You're right about the PHEV thing attracting a lot of people who otherwise would never own a Chrysler. Checking "just the right boxes" is something FCA is really good at with their more niche vehicles. The high horsepower Charger/Challenger/Cherokee and the Jeep Wrangler are amazingly good at creating a way for the married couple who can't agree on what vehicle want to both leave with enough of their boxes checked.
Pacificas are very common in upscale suburban driveways. Source: live in an upscale suburb with lots of Pacificas in the driveways. Honda Odysseys and Toyota Siennas are popular as well but probably not as much as the Pacifica.
I live in Palo Alto. I have a Pacifica (PHEV). I see many many Pacificas on the road and in driveways. The MSRP of a fully loaded hybrid is 54k. The MSRP of a fully loaded gasser is pretty close.
The reputation hasn't stopped FCA from selling to this market. Wranglers and Grand Cherokees are pretty common too, as well as the rare Hellcat.
Car dealers make their money from trade-ins, parts and service (new sales are often a loss leader to get you in for service work - everyone is driving for the best deal even if the dealer loses money), so the dealers at least care.
Car makers need to do well against the competition, and resale value is something that people look at. They want your car to last 10 years and then fall apart - that being about the time people start to be willing to call a dead car dead of old age. Though they do like having a few collectors cars that are a lot older than that around because collectors also feed into car culture.
I know that cynicism is popular, but in fact their incentives are for more than that. The executive who wants to last - and most do - needs to ensure there is a profit next quarter as well. Sure they will take profit today vs next week, but they also invest in r&d because they know if they don't eventually there will be no bonus at all next quarter.
Is this actually true or merely a theoretical thought? Because it would seem that car makers are incentivised to ensure their vehicles annihilate a couple days after their warranty expires and/or after a couple of miles after their guaranteed mileage is driven, and comparing e.g. reputation of second-hand cars manufactured in 80es/90es/2000s/10s seems to support it.