Midas Reinvents Itself

When you think of Midas you think of mufflers.  In fact Midas was founded in 1956 as strictly a muffler and exhaust system shop, and the concept grew so rapidly that there were 100 stores in 40 states in its first year of operation.  Obviously founder Nate H. Sherman caught a tiger by the tail.  Through the years Midas became synonymous with muffler repair.  But now, nearly 50 years later, there's a fly in that ointment -- these days mufflers often last most of a vehicle's useful life.  So Midas has changed its tune and has broadened the services it offers to its customers.

"The legacy and heritage of Midas is its beginnings as a muffler shop," said Rick Dow, senior vice president, marketing for Midas, "but technology changed all that."

Dow noted that the reinvention of the Midas brand is not a new phenomenon.  Midas broadened its focus from mufflers to brake service in the 1980's, and that, said Dow, "saved the company."  Now Midas is in the throes of refocusing again to add scheduled maintenance and tires to its menu of services.

What does this mean to you as a consumer?  It means that if you need scheduled maintenance, tires, brakes or a muffler, you can go to one of 1,600 Midas stores and receive services that are backed by a national chain with nearly 50 years of history.  Because the vast majority of Midas locations are run by franchisees (many second- or third-generation owners), you will also be dealing with a local merchant with a history in the area.

It also means that you can have scheduled maintenance, which is crucial to keep your new-car warranty in effect, performed by Midas technicians, rather than at a dealership.  Midas will help you keep those important maintenance records, and the bonus is the Midas service will usually be less expensive than at a new-car dealer.

How often should you have maintenance done?  Experts recommend that you have systems checked quarterly.  Some items that need attention are oil, lube and filters; brake check; and tire inspection.  Midas has recently created a relationship with Bridgestone/Firestone, which means a full range of tires are available at all Midas stores.

"We entered into an alliance with Bridgestone/Firestone early last year," Dow said, "and it is off to a terrific start."

The addition of tires is a natural adjunct to Midas' reputation as one of the nation's most prominent brake repair outlets.  Though the stores are still best known for mufflers, brake work actually represents a much larger part of the typical Midas store's business these days.  Nationwide, mufflers and exhaust are less than 20 percent of their overall service income, while brakes are about 60 percent.  Now with the shift to general maintenance services, Dow expects those areas to grow into perhaps 40 percent of the company's overall business.

Despite the big change, Midas still means mufflers to many, and that's not a bad thing.  (Internally Midas employees refer to it as "muffler vision.")  Now when you think of Midas, the company would like you to think of mufflers, plus brakes, plus tires, plus general maintenance.  The job of reinventing a brand isn't easy.

The author of The Complete Idiot's Guide to Buying or Leasing a Car, Jack R. Nerad writes frequently about auto maintenance.

Looking for Love?

Last week we asked the provocative question, "Do you love your refrigerator?"  The point was not silliness.  Instead the point was to show that Americans, in general, don't become emotionally attached to their appliances, but they do forge an emotional attachment to their cars.  In point of fact, Americans' love affairs with their cars have been well-documented, and because of that a cottage industry has grown to study that love affair and quantify it.

A San Diego County-based market research company called Strategic Vision Inc. (SVI) has been on the leading edge of this movement.  With the premise that it is far better to delight customers than simply satisfy them, it has created the Customer Delight study, which examines and indexes the degree to which owners love their vehicles.

Dr. Darrel Edwards, founder of Strategic Vision Inc., is crystal clear about his premise. "No matter how much you put into a product or how well you execute your plan, if you do not delight your customer, you have failed," he said. "In order to help product planners develop delightful vehicles that will address the needs and desires of customers, we created the Customer Delight measure that reflects both the rational and emotional aspects of customers' responses."
 
The Edwards Customer Delight Scale provides a comprehensive look at the product attributes and benefits that explicitly create "super-positive" delighted responses from the primary drivers of the vehicles. The index is calculated from the "top box" scores recorded for 110 product attribute/benefits versus the other responses recorded for the vehicles the respondents primarily drive.

That being said, just how do the various car manufacturers fare when it comes to getting their customers to register delight about their vehicles?  Well, if you buy the premise that delight is important, you can immediately see why imports are gaining overall market share versus the domestic manufacturers.  According to SVI, the Far Eastern (Japanese and Korean) and European imports dominated the car and SUV classes.

The Japanese manufacturers led in nine of 23 segments. But a surprise was that quality stalwart and acknowledged leader Toyota (with a corporation CDI of 517) remained below the threshold (Industry average = 529) in delighting their customers. Arch rival Honda, on the other hand, (with a corporation CDI of 555) held its ground.  The Honda Odyssey minivan (CDI = 539) and Honda Element small SUV (CDI = 597) were segment winners.

If there was a bright spot for the domestics it was in pickup trucks.  The domestic manufacturers led all segments with the new revitalized Ford F-150 (CDI = 643) garnering a stellar 189-point boost in its CDI score. The improvements are also reflected in the larger Ford-250/350 (CDI = 554), leading the segment.  The Chevrolet Colorado mid-size pickup entered the market with a CDI = 539 in a segment that has an average CDI = 431. It is in a class that has room for improvements, but it made a strong entry.

For those of you who class yourself as rugged individualists, you have company.  The Kia Amanti (635) has been less than a sales success but its owners love it, giving it the title among mid-size cars.  Meanwhile the Volkswagen Phaeton, another sales disappointment, received the highest score on the 2004 Delight Index with a CDI of 800.

Jack R. Nerad is the Managing Editor of Driving Today.

Are You Delighted with Your Vehicle?

Do you love your refrigerator?  Does your vacuum cleaner really turn you on?  Do you have pictures of yourself standing next to your washing machine?  If you answered yes to these questions, you're likely an unusual individual, and we'd like to have a little talk with you.  But if you answered no to being enthusiastic about your appliances, you're probably typical.  Yet, at the same time, there is a much greater likelihood that you're enthusiastic about your car.  Americans' love affairs with their cars have been well-documented, and now, in the auto industry's never-ending pursuit of better understanding of its customers (and to make a buck) these love affairs are being studied.

The premise is that these days it is not enough for customers to find their vehicles reliable, safe and even satisfying.  No, customers should have enthusiasm for their vehicles.  In fact, individuals' vehicles should actually delight them.  And by delighting customers, auto manufacturers will find the keys to greater sales and profits.  With this premise in mind, Strategic Vision Inc. (SVI) has created the Customer Delight study, because the company takes a clear position on the key to success: Delight your customers.

"This re-orientation focuses on the key player in the equation: your customer," said Dr. Darrel Edwards, founder of Strategic Vision Inc., a research-based consultancy. "No matter how much you put into a product or how well you execute your plan, if you do not delight your customer, you have failed. In order to help product planners develop delightful vehicles that will address the needs and desires of customers, we created the Customer Delight measure that reflects both the rational and emotional aspects of customers' responses."
 
The Edwards Customer Delight Scale provides a comprehensive look at the product attributes and benefits that explicitly create "super-positive" delighted responses from the primary drivers of the vehicles. The index is calculated from the "top box" scores recorded for 110 product attribute/benefits versus the other responses recorded for the vehicles the respondents primarily drive. Overall, the good news for the auto industry is the CDI (Customer Delight Index) gained 48 points last year (2004 CDI = 529 vs. 2003 CDI = 481). The 48-point gain on a scale that records responses ranging from 000 to 1000 is a statistical giant step for the industry.  But there is a huge horsefly in the ointment when one looks at the various segment leaders with a discerning eye.

For the purposes of the study Strategic Vision identified 14 separate car classes -- everything from "small car" to "convertibles over $30,000."  Each class is led by the vehicle model that most delighted its owners.  But six of those 14 "most delightful" segment leaders are sales disappointments to their manufacturers, and one performed so dismally in the market that it has already been cancelled by its manufacturer.  Those six include Kia Amanti, Lexus IS 300, Volkswagen Phaeton, Audi All Road quattro, Pontiac GTO and the now cancelled Mercury Marauder. 

The other eight segment leaders are generally regarded as being successful, some exceedingly so.  These cars are Hyundai Elantra, Toyota Prius, Scion xB, Volvo V40, MINI Cooper, Mercedes-Benz CL Coupe, Volkswagen New Beetle Convertible and Lexus SC 430. 

What this says is that some cars -- like the above-mentioned eight -- are able to delight a relatively large number of drivers.  They can win top box scores and also score significant sales numbers.  But other cars, exemplified by the Amanti and Phaeton et al., are deemed delightful by those few who bought them but don't have the broad appeal to become sales successes or even, in the case of the Marauder, remain on the market.

Interestingly, Toyota's corporate CDI of 517 was below industry average (Industry average = 529) in delighting its customers, despite the fact the corporation is widely accepted to build consistently "Excellent" vehicles.  Meanwhile Toyota enjoyed excellent sales success in 2004.  All of which proves that while many people don't love their appliances, they still want to own them.  And it might explain why so many people like vanilla ice cream.

Driving Today Managing Editor Jack R. Nerad has spent a large portion of his career trying to understand the car-buying customer, and while he still doesn't he claims he's getting closer.

Should We Cut Gasoline Consumption by 50%?

Beginning in 2008, any car or SUV that cannot meet a fuel efficiency standard of 30 miles per gallon will have to pay a tax of $1,000 per year.  That is the proposal of three top executives at Fred Alger Management, a money management firm, delivered in a letter they sent to President George W. Bush recently. The firm says the proposed tax could generate "as much as $200 billion in revenue" in its first year, and "may increase in subsequent years."

Alger has asked President Bush to set a national goal of cutting gasoline consumption in half over the next 10 years. And the firm says the proposal needs to be adopted quickly in order to reduce America's dependency on Middle Eastern oil, which "allows U.S. motives to be questioned, fairly or not."

The money management firm says that one of the biggest issues for Americans is the soaring price of gasoline and that the prospects for lower gas prices are not likely due to increasing demand from U.S. consumers, as well as soaring demand from nations such as China and soon from India. Reducing gasoline consumption and increasing the nation's energy independence will enhance U.S. economic and military security and also ensure that the legitimacy of American foreign policy is not undermined by energy needs, the letter to President Bush says.

The proposal is a radical one: Beginning in 2008, any car or SUV that cannot meet a fuel efficiency standard of 30 miles per gallon will have to pay a tax of $1000 per year.  For each year that the vehicle continues to be driven, the tax will go up an additional $500 a year.  There are approximately 230 million passenger cars in the United States (140 million cars, 28 million SUVs, 38 million pick-ups, and 18 million vans and minivans), and a relative handful of these meet the proposed 30 mile-per-gallon standard. So will U.S. consumers sit still for a $1000 per year tax on each of their vehicles?  And will they accept a $500 a year increase in that tax each 12 months thereafter?

The Fred Alger executives contend that in the first year of this policy, the U.S. government could collect as much as $200 billion in revenue. But the ulterior motive for the tax is to spur the production of smaller, fuel-efficient cars, which will lead to less dependence of overseas sources of energy. Further, the firm suggests that the tax will create a need to replace vehicles that do not meet the higher fuel efficiency standards, leading to an increase in domestic auto production to as much as 22 million to 25 million vehicles. This, in turn, the firm says, will generate stronger Gross Domestic Product (GDP) growth.

Auto industry experts, however, feel this scenario is naïve.  Although American-based auto factories do have significant underutilized capacity to build vehicles, foreign manufacturers rather than domestic manufacturers are better positioned to provide high-fuel-efficient vehicles because they already build them for other markets, these experts say.  The plan could actually be a deathblow for the already struggling U.S. auto industry.

While the goal of reducing dependence on foreign sources of energy might be laudable, the medicine suggested might be too dangerous to take.

Driving Today Managing Editor Jack R. Nerad has been a student of the automobile industry for decades and writes frequently on economic issues.

Traffic Congestion

If you’ve ever driven in an urban area you’ve undoubtedly been there: stranded in a traffic jam where vehicles seem as if they’re mired in a very thick, very gooey form of molasses. Time stands still, radiators burst, and tempers reach fever pitches. Getting caught in a traffic jam engenders an irritating feeling of helplessness, aggravated by the fact that empowerment is the watchword in today’s world. While your car usually gives you the freedom figuratively to soar like a bird, empowering you to do things previous generations could only dream of, in a traffic jam, your car simply is an expensively upholstered space to in which to pass time as what could have been a productive trip degenerates into a morass of frustration, irritation and wasted effort.


Many of us regard traffic jams as random occurrences, like earthquakes, tornadoes or funny jokes in a Jay Leno monologue. And while some traffic jams are random, in many areas across the country traffic jams crop up with the regularity of the sun rising over the eastern horizon and with the predictability of a "Brady Bunch" episode. In the argot of the traffic engineers, these are "bottlenecks," which are defined as places where the capacity of a section of a highway is often exceeded. In these problem areas, traffic flow breaks down; speeds drop and time turns to lead. One of the most irritating aspects of these "bottlenecks" is that traffic engineers know exactly where they are and can predict with uncanny accuracy their occurrences. In fact, anyone among us who is an urban traffic veteran knows the whereabouts of local bottlenecks and can recount special tactics to avoid them, some of which involve the use of the dreaded "surface streets."


In fact, not only do the traffic experts know where the bottlenecks will develop, they also know why. The fact is that regularly occurring bottlenecks have very mundane causes: the narrowing of a roadway into fewer lanes, tollbooths, entrance and exit ramps, and close side clearances such as bridge rails or medians. Particularly troublesome are so-called "weaving areas" where vehicles must cross several lanes to get to and from entry and exit points.


One might legitimately ask, if traffic engineers know where the trouble spots are and what causes them, why don’t they do something about them? On a macro scale the answer is simple: it’s just too big a job.


Consider these facts complied by the American Road & Transportation Builders Association: Over the past 30 years, while the U.S. population has increased 30 percent, the number of licensed vehicles has increased 87 percent. During the same three-decade period, vehicle miles traveled in the U.S. have increased 130 percent, while new highway capacity has only increased five percent.


When you reflect on the number of construction zones you see each week you might find it amazing that in 30 years highway capacity has increased by just a measly five percent, but most road "construction" that you see is really repair, which, of course, does not increase highway capacity. And, as the problem has been growing worse over the last three decades, it promises to deteriorate still further in the future.


The Census Bureau has estimated the U.S. population will grow by 60 million between 1995 and 2020. According to Dr. Bill Buechner, ARTBA Vice President of Economics & Research, we will have 246 million motor vehicles on America's highways by 2009, a 14 percent increase from 1999, and highway travel is expected to increase 40 percent by 2015.


While the vast majority of our highway system can accommodate increased traffic loads with little difficulty, the highways in some of our most important urban areas are clearly being overtaxed. In these areas bottlenecks present a genuine problem that has many sides.


"Traffic congestion has become a major problem on many of our highways, and it's occurring at predictably overcrowded spots-bottlenecks," said William D. Fay, president and CEO of the American Highway Users Alliance, a public information and lobbying organization. "Freeing these bottlenecks is a critical starting point for curing the gridlock on our roadways."


To help us better understand the dynamics of bottlenecks and their cost the AHUA commission a recent study called "Unclogging America's Arteries: Prescriptions for Healthier Highways." The study was conducted by veteran transportation research organization Cambridge Systematics.


The study pinpointed the nation's top 18 bottlenecks, which are located in nine metropolitan areas. Not surprisingly, southern California, which has seen its traffic problems become the butt of jokes for decades, led the list with four of the 18, including the absolute worst, but major bottlenecks were also identified in such diverse locales as Albuquerque, Atlanta, Boston, Chicago, Denver, Houston, Seattle, and Washington, DC. The bottlenecks have become so notorious in their individual areas that some have acquired nicknames like "The Big Dig" in Boston, "The Mixing Bowl" in the Washington, D.C., metroplex, "The Big I" in Albuquerque and "The Hillside Strangler" in suburban Chicago.


While it is obvious that urban traffic bottlenecks cost us time, what is less obvious, but still very real, is their costs in traffic deaths and injuries, poorer air quality; wasted fuel and lost productivity. Bottlenecks aren’t just a nuisance; lack of adequate capacity on the highways in these stress points actually causes traffic accidents, spews pollutants into the air in greater concentrations and requires the useless burning of fossil fuels.


"Our overstressed road system needs additional capacity at key points. Providing that capacity by removing strategic bottlenecks, as part of an overall program of congestion relief, will reduce the amount of time commuters have to spend on the road, save hundreds of lives, prevent thousands of injuries, and help us safeguard the environment," said the study.


The study found that if the worst bottlenecks in America were eliminated the positive impact would be staggering. Specifically, it said fixing the nearly 170 traffic bottlenecks nationwide will, over the 20-year life of the improvements:

  • Prevent almost 290,000 crashes, involving 1,150 fatalities and 141,000 injuries

  • Nearly cut pollution at the bottlenecks in half, reducing carbon monoxide by 45 percent and VOC by 44 percent (while nitrogen oxides will increase slightly by six percent)

  • Cut carbon dioxide emissions by 71 percent

  • Reduce delays by an average of 19 minutes per trip -- nearly 40 minutes per day for commuters who must negotiate a bottleneck in both morning and evening rush hours

Analytic modeling methods were used to project the impact of improvements, finding significant gains in safety, air quality and travel time at each site over the 20-year life of the improvements, despite additional delays during construction. Actual improvements guided the analysis at bottlenecks where specific congestion fixes are already underway or being planned, while bottlenecks where such repairs and remedies are under consideration were analyzed conservatively based on improvements that would bring traffic flow to a minimum acceptable level.


The problems created by bottlenecks is so dizzying that if engineers could simply eliminate America’s biggest bottleneck — the intersection of the San Diego Freeway (I-405) and the Santa Monica Freeway (I-10) in west Los Angeles — it would result in 4,560 fewer crashes, including 18 fatalities and 2,240 injuries; reductions in carbon monoxide by 33 percent, smog-causing volatile organic compounds (VOC) by 33 percent, nitrogen oxides by eight percent and carbon dioxide by 53 percent; and a 15-minute reduction in delays per trip.


Unfortunately, it will take far more than the snap of a finger to cure America’s bottlenecks, but the technology to make huge dents in the problem exists.


In order to relieve congestion, ARTBA believes the nation and individual localities should develop a balanced approach to transportation planning that recognizes the American people's right to choose their means of travel. It includes:

  • Adding road capacity where appropriate and requested by state and local decision-makers. Common sense dictates that additional highway capacity is necessary to meet the growth in the economy and population.

  • Improved "incident management" by local authorities. A February 1997 study by the American Trucking Associations Foundation found that up to 60 percent of all time lost in traffic congestion in major urban areas is caused by incidents like accidents, flat tires and vehicular breakdowns.

  • Making better use of synchronized traffic signalization and other "smart road" technologies to increase traffic flow.

  • An improved and more efficient public transit system, including bus service that depends on adequate road capacity.

The AHUA study largely agreed, saying, "While past experience shows that no single strategy can adequately address the problems of metropolitan congestion, the good news is that there are effective solutions .... A balanced, comprehensive approach to traffic congestion that uses all the tools at our disposal can lessen the stifling gridlock found on many of our highways."


The study cited mass transit, high-tech traffic management systems, reversible commuter lanes and moveable barriers, as well as additional road capacity as a combined solution to the problem of traffic congestion and bottlenecks. It cautioned that the costs of the solution are high, but it noted that the dollar value of time and fuel wasted in traffic congestion was a whopping $74 billion in 1996, the last year for which reliable figures exist.


"What the study tells us is--there's hope," said Fay. "Eliminating specific chokepoints on our major highways would bring enormous relief to frustrated drivers. For the sake of public safety, an improved environment and a better overall quality of life, it's an investment worth making."


Nerad has experienced several of the nation’s worst traffic bottlenecks firsthand in commutes from his home in Southern California.