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Italian Assignments, Navigating Cultural Differences

Italian Assignments – Guidelines for Navigating Cultural Differences

University of South Florida

December 4, 2017

Todd Benschneider, Gabriel Bussell, Ali Dogan Sivritepe, Pam Sundown

 

Table of Contents

 

 

  1. Employee Responsibility and Preparing for Success
  2. Bureaucratic Tasks and Tips
  3. Anticipated Economic Adjustments
  4. Schooling for Children
  5. Transportation
  6. Housing
  7. Medical Care
  8. General Business Etiquette
  9. Effective Negotiation Styles
  10. Dress Code and Personal Fashion
  11. Dining Etiquette
  12. Gifts
  13. References

Employee Responsibility

Please understand that your assignment is first and foremost to serve as a corporate diplomat for your employer: Interglobal. One thing that is certain, you should expect that the progress toward your business objective to take much longer than you anticipate, so please adjust the timelines of your assignment objectives to accept these differences, a good rule of the thumb is U.S. estimated timeline multiplied by 2.5 (20). It will also benefit you to resign to the fact that controlling your Italian business partners sense of urgency or work ethic will usually damage relationships. With that stated, your first task will be to adapt your pace to the Italian partner’s timeline.

 

In addition, it is your duty to understand the Italian’s “Ugly American Stereotype”, and avoid reinforcing any negative preconceptions such as: Americans are rude, self-righteous and condescending towards their Italian hosts. It is imperative to understand that over 30% of American expats abandon their first foreign assignment in the first twelve months, the high failure rate is easily reduced by intensive culture preparation like the training course you have been provided (20).

 

Another obstacle in cultural acclimation is the preparation of your family for the assignment, which is why they will also be participating in preparatory conditioning for the cultural adventure the family is about to embark upon. Success on a foreign assignment will prove your resourcefulness and adaptability and be an important stepping stone in the advancement of your areas of responsibility here at Interglobal.

BUREAUCRATIC REQUIREMENTS FOR YOUR EXPAT ASSIGNMENT

For Italian work assignments that last longer than three months, US citizens are required to obtain a “National Work Visa”. Most companies handle the application on your behalf; however, the approval process usually takes six to nine months; therefore, it is imperative that you follow the status of the application and understand your company’s policy. Family visas are comparatively simple to acquire after your National Visa has been granted, your family will only require a written request and valid passport to join you (12).

 

Depending on the living arrangements provided by your employer, you will probably need also to apply for a residency permit to rent or purchase a home. With a residency permit, you will need to apply for tax number, this number, much like a social security number will be required for many routine family needs such as obtaining insurance or healthcare (12).

 

In addition, most expats learn the hard way that their U.S. mobile plan does not transfer to Italy and that roaming charges can rack up a frightening bill unless you modify your plan to an international package prior to your arrival. For business purposes it is standard to have a prepaid Italian SIM card installed on your mobile phone which can convert your current smartphone to a local Italian phone number. When you want to switch back to your American number, you just swap back to the original SIM. A popular technology in Italy has become dual SIM mobile phones that allow you to carry two independent phone lines on a single phone, one as your personal number and the other as your work number (19).

 

ANTICIPATED ECONOMIC ADJUSTMENTS

The cost of living in Italy is not significantly higher than in the US, but the regionally adjusted income to cost of living equates to around 50% higher depending on region. The first observations many expats realize is are larger pay gaps between junior and mid-level managers, this may be a factor of the Hofstede Power Distance Index of 50 compared to the US score at 40 (9). The Hofstede-insights.com website is a valuable tool to use in understanding international cultural differences. For example, Italy pays its young workers the lowest entry level wages when compared to its western European neighbors, you can expect to find students from with excellent academic credentials hiring in at a 2016 average starting pay that equates to $32,500. In contrast nearby Switzerland offers its new graduates an average starting salary equal of $99,300. In the United States you are accustomed to working with young college graduates that typically hire in at $50,200. Fortunately for our prospective mid-career expats you will learn that Italy uses the money saved on young employee salaries to compensate older workers. While still at 11th of 15 western European countries Italy pays its mid-level supervisors the equivalent of $84,100 annually, which climbs quickly as you climb in the corporate ranks (14). These salary differences are partly cultural and due to the fact that Italy has limited resources that impact its current potential GDP. On the following page are detailed comparisons of each region’s major city with cost of living compared to Tampa. You will notice surprisingly inexpensive rents but low local purchasing power due to lower average salaries and higher tax rates (13).

 

 

Milan’s Local Salary Purchasing Power is 50% lower than Tampa’s

Rome Local Salary Purchasing Power 49% Lower than Tampa

Naples’s Local Salary Purchasing Power is 59% lower than Tampa’s

 

 

SCHOOLING FOR CHILDREN

Most expat families send their children to international schools to alleviate the challenges of mastering academic fluency in a second language. The benefit of attending an accredited international school, is that these institutions provide a standardized coursework that transfers into other international locations and can increase chances of being accepted into the most selective international universities (11).

 

In Italy, schooling is broken into three cycles plus kindergarten, which begins with three years of optional kindergarten through age six, then a mandatory elementary school through age 11, during this cycle Italian education system requires all students to learn two foreign languages, the first is typically English which is introduced while children are seven years old, a second foreign language is required at age eleven (7).

 

Following the elementary school cycle, Italian children enter middle school for ages eleven through fourteen. At fifteen they begin the third cycle that we call high school which they are required to take an admission test to qualify for the academic courses to prepare them for the universities. If their academic skills lag their peers, they will typically be assigned to a vocational training school rather than a high school (11).

 

 

 

 

TRANSPORTATION

You should plan on relying on public transportation for the first several months, since you are legally required to carry an International Driving Permit to rent a car. In addition, expect to pay about 60% more for gasoline, however on the bright side, Italians also drive on the right side of the road and most major highways have no speed limits (7).

 

Public buses and trains are the most affordable and reliable mode of transportation in major cities, many expats use the iBus line.  Fortunately, Uber has become very popular in Italy’s major cities in recent years and is often the most affordable mode of transport in many areas, however the Uber network is not well developed in smaller towns (7). Unlike Uber, many taxi drivers will frequently take advantage of foreigners by insisting on payment much higher than the meter reading (7).

 

HOUSING

While many of you will be taking advantage of housing provided by the company, some may choose to explore alternative housing, especially those who find a work from home culture. In Milan and Rome, many prime apartments are being bought up by investors and utilized as AirBNB rentals, which is a type of personal Home to rental Hotel room application that works on a similar principal as Uber as does for personal transportation, this trend is creating a shortage of small apartments with a view of the city (12); however, it is an excellent way to rent for a short while in different parts of the city prior to signing rental contracts.

 

 

MEDICAL CARE

Italian employers are required to contribute to the government health insurance of their workers. Unemployed and retired are covered by the government plan which ensures that as a nation, Italians are well cared for. In comparison to other overseas assignments, Italy provides some of the best healthcare for its residents, including expats. Expats may want to consider private add-on insurance to expedite the timeliness of their medical care visits, especially on assignments where they may not qualify for the host company insurance provisions. As a general rule of thumb, medical attention is given to all regardless of insurance coverage, add on insurance speeds the process and covers most items not covered by the government health insurance. Consult with other expats in your region for their recommendations on medical centers that are familiar with the expat health insurance requirements (12).

 

GENERAL BUSINESS ETIQUETTE

As a rule, Italians have difficulty trusting strangers and most business relationships require and introduction by a third party from the host culture. It is generally considered unprofessional to approach executive level business partners and introduce yourself to begin pitching them your ideas, instead you would normally be introduced to them by someone of similar rank that vouches for your expertise and trustworthiness and begins the conversation for you mentioning your expertise on solutions (10).

 

While English is often the preferred second language of Italian international firms, you should understand that most professionals expect you learn Italian to be accepted into the inner fold of office politics. The Italians are very proud of their heritage, language and culture, and have a hard time building relationship with foreign business associates that are not interested in learning their language. Remarkably, even if you have a mastery of the standard Italian dialect taught to American students, you should expect to be puzzled by the countless number of local dialects that distinguish one region from another (8).

 

NEGOTIATION STYLE

Overcoming the differences in negotiation styles between the American approach that you might take for granted and the decision-making processes of your Italian counterparts has the potential to make or break your success on the assignment. In the first year on your Italian assignment you will wise to negotiate using a host country assistant since mistakes made during this period can cause long term damage to your relationships. You can expect to have a difficult time gaining access to decision makers above your own rank, in the Italian business world, the decision makers are rarely in the meeting where the negotiations take place, because of this you can expect that no hard decisions are normally made during the meeting. You are simply presenting your side and responding to their objections, the junior associates at the meeting will relay the information to the decision makers and who may mull over the proposal for months before responding that they are interested (22).

 

In Italy, decision makers are expecting to deal with someone their own level of seniority, so if you are under 35, it will be wise to reconsider representing yourself in the negotiations, the Italians can feel insulted that they are not dealing with your boss, even if you are the sole decision maker. With that in mind, if the Italians send older representatives to the negotiating table, be certain to address them first, last and with a great deal of deference, even if you are unsure that they are the true decision makers.

 

Italian corporate culture typically requires that a respected host country executive introduce the interested parties, during that introduction day, avoid talking business unless a senior member of their team specifically brings up business matters. Expect several weeks to pass and several visits before the prospects bring up business. It is at these critical points that you be patient and respect their business traditions, this is an area where many Italians expect you to turn into “an ugly American” and try to rush them into viewing you as a trusted business partner. Your Italian partners feel that high pressure tactics are an indicator that they are being tricked into an agreement that is not in their best interest, by instead drawing out the agreement they are comforted by the fact that you are comfortable with them looking at your proposal at every angle. Once they see that you have their best interests at hand when proposing what should appear to be a “win-win” collaboration of resources in your first few agreements your future partnerships will progress with less effort (22).

 

Italians will avoid being direct and often ignore your demands for an immediate acceptance or refusal of terms. It will be rare to hear host country partners use the word “No” during negotiations; instead, they will change the focus to a different part of the agreement or skirt away from business talks and ask about your family. Patience will become a daily mantra during your first year in Italy, without patience your business objectives will often fail to win the cooperation needed from your Italian counterparts. Compare the graphics below to gain a deeper understanding of the difference in the negotiating process (21).

(21)

 

DRESS CODE AND PERSONAL FASHION

Dress codes vary by region and climate; however, you can expect that your Italian coworkers invest a larger portion of their income in their clothing and spend a larger amount of time evaluating their wide range of potential outfits for the day at hand. At first glance you might be misled by the lower number of white shirt and tie dress codes than in the United States; however, if you look closely you may find that knit crew neck shirt is anything but a t-shirt, instead it could be a meticulously pressed merino wool knit that might cost several hundred dollars, the type of attire that Americans would save only for weekend social events.  For example, few American workers with salaries under $100,000 even consider purchasing a $500 pair of shoes or a $2000 handbag; however, it is common in Rome and Milan to notice that some junior level managers own several pairs of $500 designer shoes and a couple of $2000 bags, and what astounds most Americans is that they wear such expensive fashions to work on a daily basis. Forget about the American concept of “work clothes” being the ones that you are not concerned about getting soiled or torn. With that in mind, Italian business people take great care of their clothing, most items are professionally laundered after each day’s wear with the exception of wool suits which are usually hand steamed at home before returning to the closet. As for sneakers or sneaker inspired casual shoes, they are not often seen inside a business office, so when in doubt plan to limit your sneakers to the gym or the ballfield and the same can also be said of typical American jersey cloth sweat suits.

For women, take note that colored nails are uncommon, and makeup is light or often non-existent inside the workplace and is generally considered tacky and the hallmark of a stereotypical tourist. Instead of makeup, women invest their primping time into the preparation of their hair to achieve the best possible shape and shine. You will often be surprised as well to learn that even junior level females commonly spend $100 per week to have their hair care maintained by the countless number of highly respected salons across the major cities, in Milan stylists at the most elegant salons make over $100,000 year (19).

 

While women’s business attire might initially seem sexier than you might find in an American business environment, you will notice that it comes from Italian clothes to be form fitting rather than expose skin, so be cautious about the low-cut blouse or high hemmed skirt that is considered acceptable in American offices. You will later gain an overall perspective on where each culture places its discretionary income, when those Milan coworkers are shocked to learn that you had two $40,000 cars in your garage back in the United States at your pay level.

 

DINING ETIQUETTE

Italians take food very seriously, and take their time enjoying the food experience. When at a restaurant, it is not uncommon to spend several hours enjoying the company of those you came with. Expect to be at a restaurant for a minimum of 1-2 hours, possibly more, especially on Sundays. Each region, and sometimes even individual cities, have their own specialty dishes, so the best way to immerse yourself in the local culture is to ask your server about the specialties. A full Italian meal typically consists of an appetizer, a first course, and a second course with a side dish.

Most Italians drink mineral water and/or wine with meals and you can expect to see a charge on your bill even for tap water. Coffee is not served until after the meal. Italians usually eat late meals, where lunch will not start until approximately 1pm, and dinner not until 8pm. Nearly all shops and restaurants are closed for three to four hours between lunch and dinner; however, in large tourist areas, one may find restaurants open all afternoon. Because Italians spend significantly more time at restaurants than Americans, the server will almost never bring the bill to the table until asked to do so. In addition, table etiquette is similar to most countries in terms of utensil use. However, forearms (not elbows) should rest on the table, not on the lap, which is common in American culture.

Large tips are frowned upon in Italy; most wait staff are viewed as distinguished professionals and receive a respectable living wage salary. In most regions a “service fee” or table fee is included in on the bill which represents a built-in tip, in these situations it would be uncommon to leave an additional tip. Therefore, the most valued tip is enthusiastic praise to the chef and server. Ask your business associates for their recommendations on tipping practices in the area that you will be working, they will appreciate your concern for adapting your behavior to the local practices and be more willing laugh off any inappropriate mistakes made along the way.

GIFT GIVING

Italians like Americans have corporate restrictions on receiving gifts from vendors, so gifts are not expected from business associates, but are common when invited to a home for a dinner party. Typical gifts are inexpensive and often representative of your home country such as American liquors or chocolate, when in doubt flowers are suitable for any occasion, however avoid chrysanthemums which are used for funerals and never given an even number of flowers as it is considered bad luck.

 

REFERENCES

  1. Alm, J., Bernasconi, M., Laury, S., Lee, D. J., & Wallace, S. (2017). Culture, compliance, and confidentiality: Taxpayer behavior in the United States and Italy. Journal of Economic Behavior & Organization,140, 176-196. doi:10.1016/j.jebo.2017.05.018
  2. Business etiquette. (n.d.). Retrieved December 04, 2017, from http://businessculture.org/southern-europe/business-culture-in-italy/business-etiquette-in-italy/
  3. Cost of Living in Italy – International Living Countries. (n.d.). Retrieved December 04, 2017, from https://internationalliving.com/countries/italy/cost-of-living-in-italy/
  4. Curtis, M. B., Vinson, J. M., Conover, T. L., Lucianetti, L., & Battista, V. (2017). National Culture and Ethical Judgment: A Social Contract Approach to the Contrast of Ethical Decision Making by Accounting Professionals and Students from the U.S. and Italy. Journal of International Accounting Research,16(2), 103-120. doi:10.2308/jiar-51824
  5. Dining Out in Italy: How to Enjoy an Italian Meal. (n.d.). Retrieved December 04, 2017, from https://www.tripsavvy.com/eating-out-in-italy-1547406
  6. Doing business in Italy: 5 Tips for Foreigners. (n.d.). Retrieved December 04, 2017, from https://www.italybeyondtheobvious.com/tips-on-doing-business-in-italy
  7. Education and Transportation in Italy. (n.d.). Retrieved December 04, 2017, from https://www.internations.org/italy-expats/guide/living-in-italy-15326/education-and-transportation-in-italy-2
  8. Executive MBA IN Italy. (n.d.). Dictionary of Marketing Communications. doi:10.4135/9781452229669.n3250
  9. Hofstede, G. (2016, October 14). Country Comparison Italy vs United States . Retrieved December 04, 2017, from https://www.hofstede-insights.com/country-comparison/italy,the-usa/
  10. Inge, S. (2013, December 02). Six tips for Italian business etiquette. Retrieved December 04, 2017, from https://www.thelocal.it/20131202/six-tips-for-italian-business-etiquette
  11. Italian education system, italian schools, schooling in italy, Italian nursery school, primary schools in italy, italian middle school, high school, secondary schools in italy, vocational studies in italy, academic schools, Italian universities. (n.d.). Retrieved December 04, 2017, from https://www.understandingitaly.com/profile-content/education.html
  12. Italy Pros and Cons for an Expat Assignment. (2012, October 25). Retrieved December 04, 2017, from http://www.expatarrivals.com/italy/pros-and-cons-of-moving-to-italy
  13. Italy vs United States Cost of living Stats Compared. (n.d.). Retrieved December 04, 2017, from http://www.nationmaster.com/country-info/compare/Italy/United-States/Cost-of-living
  14. Local, T. (2016, February 17). Young Italian workers are among worst paid in Europe. Retrieved December 04, 2017, from https://www.thelocal.it/20160217/young-italian-workers-are-among-the-worst-paid-in-europe
  15. Miller, D., Breton-Miller, I. L., Amore, M. D., Minichilli, A., & Corbetta, G. (2017). Institutional logics, family firm governance and performance. Journal of Business Venturing,32(6), 674-693. doi:10.1016/j.jbusvent.2017.08.001
  16. Raspadori, P. (2011). Inequality and culture: geographical differences in the access to cultural enrichment in Italy (1863–1992). Continuity and Change,26(02), 219-241. doi:10.1017/s0268416011000105
  17. Rosch, D. M., & Haber-Curran, P. (2013). Learning Leadership Abroad. Journal of Leadership Education,12(2), 148-154. doi:10.12806/v12/i2/148
  18. Rosen, E., & Rizzo, G. B. (1961). Preliminary Standardization of the MMPI for Use in Italy: A Case Study In Inter-Cultural and Intra-Cultural Differences. Educational and Psychological Measurement,21(3), 629-636. doi:10.1177/001316446102100309
  19. Starr, G. (n.d.). Facts About Italy & Fashion. Retrieved December 04, 2017, from http://traveltips.usatoday.com/italy-fashion-13086.html
  20.   Expatriation: Why does it fail? (n.d.). Retrieved December 04, 2017, from http://www.expat-us.com/expatusblog-relocationusa/2014/9/2/expatriation-why-does-it-fail-
  21. Lubin, J. G. (2015, August 14). 23 fascinating diagrams reveal how to negotiate with people around the world. Retrieved December 04, 2017, from http://www.businessinsider.com/how-to-negotiate-around-the-world-2015-8/#italians-regard-their-languages-as-instruments-of-eloquence-and-take-a-verbose-flexible-approach-to-negotiations-6
  22. R. (n.d.). Negotiating styles in Italy. Retrieved December 04, 2017, from http://www.minorccbs.com/skills/negotiations/item/negotiating-styles-in-italy

 

Continued Consumer Resistance to Fuel Efficency Technologies

12/09/2012 EPA policies that affect the economy become front page news in an election year and the hot topic for 2012 is the Corporate Average Fuel Economy (CAFE) revisions, which automakers to improve average automobile fuel economy from 29 mpg to 54.5 mpg over the next 13 years. Agreements to these revised fuel efficiency standards were concessions made by automakers during the industry bailouts of 2009. In the backlash of that federal bailout, critics have been quick to fault American manufacturers for their lack of long term planning. However, in defense of management strategy, the automakers have for decades, simply been doing what profitable businesses do best, responding to consumer demand (Vlasic).

The press often suggests that domestic auto sales recovery will depend on the fuel economy of the products that manufacturers can provide. These critics assume that consumers make purchase decisions using primarily math and logic, those of us in the auto industry experience first hand purchase motives that are much more closely akin to the process of purchasing fashions or artwork. To most Americans, their car is a part of their self-image, not just a tool that converts dollars into miles traveled. Journalists such as News-Herald’s John Lasko write articles that with opening lines such as, “With gas prices hovering near $4 a gallon, many are opting to trade in their gas-guzzlers for more fuel-efficient vehicles.” With news headlines like those, it is easy for the public to conclude that the US automakers lack of sales was due to its heavy reliance on gas guzzling models. However, those assumptions are based on popular ideas that the domestic manufacturers previously lacked the capability to produce fuel efficient vehicles. In their defense, the simple reality remains, the automakers must make their first priority to produce those vehicles that sell well in the domestic market.

The critics overlook the 3 million Chevrolet Chevettes that were produced between 1976 and 1987 or its domestic counterparts, the Plymouth Horizon and the Ford Fiesta that provided fuel efficiency equal to most economy cars on the market today. For example, the Chevrolet Chevette was for nearly a decade, the American flagship economy car, selling millions by providing a real world fuel economy of 25 city/ 30 hwy, or with a popular diesel engine option reaching 33 city/41 hwy. The Chevette was sold with a base price, that inflation adjusts to about $11,000 in today’s dollars and consistently surpassed the fuel economy ratings of it’s main Japanese competitor, the Toyota Corolla by nearly 2 mpg for nearly a decade.

Compare those cost and fuel efficiency ratings to today’s most economical products available in the US, the Korean made 2013 Hyundai Accent with an MSRP of $10,665 that is rated at 29 city/39 hwy. The comparison of these cars in the context of the 25 years of technology that evolved between them should dispel assumptions that Asian economy cars have enjoyed decades of superiority in fuel economy (fueleconomy.gov). However, in the American car market, every one of those fuel sipping economy cars was discontinued in the late 1980’s when sales dried up as the pendulum of automobile fashion swung toward a return of larger and more powerful transportation, with the introduction Sport Utility vehicles and the return of V8 powered high performance sedans.

By 1990, it became increasingly uncool to be seen in fuel efficient cars, American auto fashion began to enter the age of the 1993 Jeep Grand Cherokee, offering a taller ride height for a better visibility in traffic and providing the owner with a sense of safety and rugged capability. The Grand Cherokee became the benchmark to measure style popularity, marketed with an image of recreational outdoor travel and adventure rather than previous trend for  economical commuter transport. These mid-sized all terrain Sport Utilities grew especially popular with female buyers in northern states, at the same time four door 4×4 pickups became increasingly popular with young male buyers seeking that “Eddie Bauer” outdoorsy image.

Critics often ignore the strategic decisions that allocated research and development funding away from fuel economy and directed budgets to safety, performance and durability to meet the consumer demand curves. Over the past 15 years the average vehicle age alone has grown by a third to 10.8 years old with advancements in vehicle durability (USA Today).  Additional progress that was made during that period to improve braking distances and implement crash avoidance technology reduced accident frequency and cut the percentage of crash fatalities in half.  In an effort to appeal to consumer demands for more powerful accelerator pedals, 0-60 acceleration times have improved by over 40%. And to counter the reliability critics of the domestic cars from the 1980’s, the inflation adjusted annual maintenance costs have dropped by more than 80% (NADA.COM).

Today even after the industry collapse, American manufacturers once again dominate automobile industry technology development, General Motors again was ranked the 2011 No. 1 innovator in automotive patents by US patent board (Tuttle). However, consumer demand trends in automobiles are similar to those in fashion, with opposing trends recurring in 10 year cycles, such as style trends toward skinny jeans from bell bottoms and short carefully styled hair to today’s bushy headed natural hairstyles. Sociologists attribute 10 year style cycles to be dependent on the needs for generational self-image, as each generation makes fashion and identity statements to differentiate them from the previous generation.

Business Times writer Brad Tuttle suggests that the fuel economy trend that began in 08 will continue to gain momentum:

“A new True Car post traces the average miles-per-gallon rise among new cars sold

in the US… all of the top seven automakers posted dramatic year over year

increases in average miles per gallon. In 2011 the average new Ford got just 17.3

mpg compared with 22 mpg in February of 2012 … the rise comes primarily as a

result of Ford doubling sales of small cars such as the Fusion and Focus”

However, despite increases in economy cars sales, auto sales as a whole have risen, the demand is also increasing on 5 year old full size SUV’s. According to industry writer Nick Bunkley,

“Retail prices for five-year-old full size S.U.V.’s are 23 percent higher than a year ago

according to Edmunds.com, an automotive information Web Site. That is more than

double the average price increase of 11 percent for all five-year-old vehicles.”

One thing is constant in the automobile industry, vehicle selection is an emotional decision more than it is an economic one. Customer buying motives first and foremost are influenced by how the vehicle makes them feel, a vehicle becomes one with the driver, it can allow them to feel bigger, more secure or more powerful.  I recently encountered a perfect case that really defined the influence of self-identity on vehicle selection.

Carolyn, a 60 year old widow and retired guidance counselor arrived at our Buick-GMC showroom in a well maintained, three year-old, luxury four wheel drive truck. Carolyn had gotten a letter from our used car department that high demand for trade-ins like her truck had currently driven trade-in values up thousands over the previous year. The letter encouraged her to consider upgrading soon, to take advantage of current trade in values for used 4×4’s.

The timing of the letter was perfect for Carolyn, since she had recently moved to Florida from the Midwest and no longer had the need for wintertime four wheel drive; to further complicate matter the garage of her new condo also couldn’t accommodate the truck. She explained when she arrived, that she really wanted to reduce her fuel budget and downsize into one the new hybrid Buick Regal sedans she had been reading about in the newspapers, rated for twice the fuel economy of her truck.

Over the following week Carolyn test drove over a dozen of fuel efficient sedans from ours and different dealerships including the Hybrid Regal that she initially planned to purchase. Despite our best efforts to persuade her to choose our last remaining hybrid, she instead opted to buy the high performance Regal T Type, performance sedan, that ironically provides a only a slight fuel economy advantage of 15% over the truck she was trading in and was priced thousands higher than the $28,000 hybrid version.

Carol admitted that when driving the cars rated highly for fuel efficiency she felt as if she had sacrificed the power that she was accustomed to and those low powered cars made her feel old and slow behind the wheel, she insisted that she “wasn’t ready to feel like an old lady toodling down the right lane, holding up traffic”. Carol’s time behind the wheel of the Regal Turbo made her feel young and put a smile on her face every time she pushed down on the accelerator pedal. For the sake of “feeling young” she was perfectly content to pay an extra $90 in monthly car payment for the high performance engine and luxury options and also disregard the $65 month in fuel savings that the hybrid version offered.

Think of the vehicle choices by comparing it to an airplane selection; imagine choosing between airplanes, where you could select a 2 seat Cessna that might make you feel like buzzing mosquito, or for another $150 a month you could pilot the F-16 fighter jet or a Boeing 747 to work, ….to you which of those options excites you?. The difference it capability seems huge and the difference in increased fuel costs may only be an additional $100 a month. The thrill of becoming something larger and more powerful and the status that comes with that ownership has an attraction beyond what can be measured in simple terms of transportation costs per mile. American buyers have consistently demonstrated that they are willing to sacrifice a larger part of their income to enjoy vehicles that provide them with excitement.

Current sedan trends are being influenced by the fuel efficient designs from Asian manufacturers that were designed to handle the high taxes on Japanese gas and the shortage of open roads on the islands of Japan. Understanding the American tastes requires us to understand the differences in our driving habits, many countries do not have the smooth open roads that American can enjoy, foreign drivers are often limted in their ability to appreciate American tastes for size and horsepower. However in Australia, which has road systems similar to the US, they have a huge market for large SUV’s, trucks and big engined cars. During the 1990’s many Japanese automakers began to design vehicles to cater to the American market, large gas guzzlers like the Nissan Armada, Toyota Sequoia and Honda Ridgeline ensured import survival during the SUV years, and most notably those Japanese trucks and SUV’s suffer from slightly lower fuel economy ratings than the American SUV competitors.

It has been easy for the press to fault American automakers for their lack of vision in developing economy vehicles, and to blame management for not remaining competitive in fuel efficiency technology. However, despite almost a total lack of advertising dollars for large engine SUV’s, compounded by the handicaps of stale aged out designs and a decrease of discounts offered on the large SUVs, the demand for large SUV’s is climbing back to nearly 2008 levels despite continued fuel cost nearing $4.

Over the past 30 years, American consumers have voted with their wallets, which indicated that fuel economy has been considerably less important than size, safety, reliability and performance. The challenges that lie ahead are not building smaller, less powerful cars as much as directing energy saving technology development at the powerful SUV’s, light trucks and spirited sedans that American consumers demand.

Because for many Americans the automobile is more than simple transportation, it is as much an entertainment and fashion decision as a financial decision, and many of those Americans have proven for decades that they are perfectly willing to pay a premium to enjoy a few more smiles-per-gallon.

Work Cited

Bunkley, Nick. “As Car Owners Downsize, the Market Is Strong for Their Used S.U.V.’s.” New

                        York Times. 07 2012: n. page. Web. 7 Nov. 2012.

“Side By Side Economy Comparison.” fueleconomy.gov. US Environmental Protection Agency,

07 2012. Web. 7 Nov 2012.

Lasko, John. “Gas Prices Have Car Makers, Sellers, Buyers Looking at Fuel Efficiency.” The News

                       Herald. 30 2012: n. page. Web. 7 Nov. 2012.

. “Guidelines.” nada.com. National Automobile Dealers Association, 07 2012. Web. 7 Nov 2012.

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                          Time. 12 2012: n. page. Web. 7 Nov. 2012.

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