I'm not a member of President Obama's automotive task force, which is overseeing the bailout of General Motors and Chrysler. But in a way, we're all on the task force, since these two automakers are staying afloat thanks to taxpayer funding that could reach $40 billion or more this year.
So I'm going to give Detroit some advice. Not about labor contracts or debt refinancing or global alliances, but just about cars. It's true that the quality of American-made cars has improved in recent years. But that's not enough. If the folks running the Detroit Three—including Ford, which hasn't asked for a bailout but still might—drove the latest offerings from the competition, they'd realize there are lots of innovations they're missing out on. (See a slideshow.) Here are some of the top cars from which the Detroit automakers can learn:
Honda Fit (Starting price, $14,750): Car buffs don't love the Fit because it's small. They love it because the packaging is brilliant, the styling is funky, and the car handles like a go-cart. It just so happens that the Fit is also a subcompact with a low price, which makes it a slam-dunk choice for thousands of owners. There's nothing in Detroit's inventory that comes close, because Detroit has long regarded small cars as a necessary evil, while importers know they can be fun and fulfilling.
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Volkswagen Tiguan ($24,300): Like the Fit, this stylish crossover reveals something that the Europeans and Japanese know but Detroit doesn't: Small vehicles can be just as cool as big ones. Cooler, maybe. The Tiguan is everything people are looking for these days: practical, fun, and modestly sized. It's a lot sportier than a Saturn Vue or Ford Escape. Instead of skimping with cheap parts and a slapdash interior—criticisms that dog Saturn and Ford—Volkswagen gave the Tiguan upscale touches that help justify a price that can easily crest $30,000 with options. That leaves an opening for Detroit to match the flair, for less.
Infiniti EX ($35.450): Quick, name a small, luxury domestic crossover. . . . Trick question. There aren't any. But the importers are starting to offer them, because they know that consumers don't just pay for size. They also pay for saucy styling, great packaging, and an exhilarating driving experience, all of which the EX offers. Detroiters might sniff that the EX isn't a true SUV because it doesn't have off-road capability. News flash: It doesn't matter. Most people who buy SUVs never go off-road, which is why optional all-wheel drive is more than enough for most vehicles.
Honda Insight ($19,800): Honda and Toyota are so far ahead on hybrids that they could run them on sludge and still be greener than Detroit. The Insight ups the ante on Toyota, since it undercuts the class-leading Prius by a couple of thousand dollars. In response, Toyota has announced it will introduce a Yaris hybrid that's even cheaper. While the Japanese are raising the bar and lowering the cost of hybrids, Detroit remains a generation or two behind. Chrysler doesn't even offer a hybrid. GM hybrids like the Saturn Aura and Chevy Malibu offer just modest mpg improvement over conventional models. And big hybrid SUVs are a meaningful breakthrough, but, at $50,000, they're out of reach for most buyers. The $29,000 Ford Escape and $27,000 Ford Fusion hybrids are good entries, but they look awfully pricey compared to Honda and Toyota offerings. Detroit needs to find a way to cut the cost of hybrids and crank out a dozen different models, or just hand over the whole segment to the Japanese.
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Audi A4 ($32,700): The most common complaint about Audis is that they're overpriced—precisely the kind of problem an automaker wants to have. The A4 isn't bodacious like the Cadillac CTS. It lacks the S-curve chops of the BMW 3 series and the regal parentage of the Mercedes C Class. Yet strong engineering, slick interiors, and edgy design cues like the "eyeliner" LED lights that accentuate the headlamps have made the A4 a top-shelf alternative to more commonplace luxury sedans. Domestic lines like Buick and Lincoln, meanwhile, can only lure customers from the German and Japanese luxury makes by offering lower prices.
Mazda MX-5 ($21,750): There used to be lots of fun little convertibles. Now it seems like a lost art. Pontiac made a splash a few years ago when it introduced the Solstice, a hot-looking two-seater, but enthusiasm faded as drivers noticed the ho-hum interior and some awkward internal tradeoffs. There are few such complaints about the MX-5, which gets high marks for zip, handling, refinement, and an optional power roof. Ford and Chrysler in particular ought to pay attention—neither even offers a two-seat roadster.
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Volkswagen GTI ($23,230): It's not just a muscle car, it's a poor man's race car, with taut handling, amped-up brakes, and a sizzling 200-horsepower, turbocharged, four-cylinder engine that might provide more thrill per dollar than any other car on the road. Detroit muscle cars tend to be all about the engine, which is unfortunate, since big V-8s are falling out of favor. The Chevy Cobalt SS is a GTI imitator, but it's based on a middling economy car and isn't nearly as refined. Keep trying.
Hyundai Genesis ($32,250): The South Korean automaker has cracked into the near-luxury segment with a holy-cow sedan that ranks in the top five in its category in the U . S . News rankings and is the reigning North American Car of the Year. Buick, Chrysler, and Lincoln might want to study Hyundai's formula, which is to offer the same features and quality as the top Japanese and European brands for thousands less. If they don't, Hyundai may end up poaching what customers they still have.
Mazda 5 ($17,995): It's small for its category, so Detroit's probably not interested. Yet many families find the quirky 5—a three-row hauler that seats six—to be a fun, economical alternative to conventional minivans. It costs less than other minivans, gets better mileage, and even comes standard with a sporty, five-speed manual transmission. Some analysts think the 5 may actually kick off a new "microvan" category, with copycats like the Kia Rondo. But no domestics, apparently.
Subaru Forester ($19,995): Car reviewers find this crossover a bit frumpy—but they love to recommend it for their parents, because it's one of the most practical, unpretentious vehicles you can buy. The high, stodgy roofline provides great visibility whether you're a tall or short driver. There's lots of cargo space for the price. You could pay more for a Chevrolet Equinox or Jeep Liberty, but you'd probably end up wondering why. GM and Chrysler should ask themselves the same question.