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Thread: The future of the car industry

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    Vulture of The Western World Eric's Avatar
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    The future of the car industry

    What's likely to happen to the car business over the next year? A great deal, of course. But don't take that to mean it will all be bad. Some will be. But much of the change that is coming is purgatory - and necessary. The events of the past six months have merely forced the issue. Here's how I see things breaking down:

    * GM will survive, but its half-dozen divisions will not -

    Did you know that at one time Chevrolet, by itself, had more market share than all six of GM's current divisions - Chevy plus Pontiac, Buick, GMC, Saturn, Cadillac, Hummer - combined do today? Yep. But GM has not adjusted its divisional structure to reflect the realities of its current market position. Six divisions, each of them fielding a full range of models, is unsupportable when your total market share is less than 25 percent.

    Which ones will go - and how they will go - is yet to be determined. There may be a merger of brands, or a trimming of models within each brand. But rest assured that by 2010 there will no longer be six full-line GM divisions.

    * Chrysler will sleep with the fishes -

    The lesions are just too deep (and the market too unforgiving) to have any real hope for Chrysler's survival. It is the AMC of 2009. Remember American Motors? By the late '70s it was out of money - and its products were dated as well as plagued by shoddy workmanship. It was a vicious cycle. There was not enough money to "do it right" so corners were cut in obvious ways, which consumers quickly found out about. Which of course led to even worse sales. Which led to even less money to fix the original problems. That same cycle is bleeding Chrysler white today. It has models that are obviously out of date (PT Cruiser, Sebring, Pacifica) but it hasn't got the money to update them. It has a few others that are nice enough (300, Challenger, big trucks/SUVs) but which are totally wrong for the times and can't be given away. Sprinkle in crushing debt and union/pension obligations and ask yourself, who would want any part of this mess? Fiat to the rescue? No one - not the Americans, not the Japanese - can sell the cars they have here already. Do you think Fiat - a brand with zero presence in the U.S. market is going to succeed where even Toyota is having serious trouble getting a leg up?

    Sayonara, Mopar.

    * Everyone will scale back -

    Just as GM has too many divisions, most car companies have far too many models and sub-models of those models. Toyota, for example has (brace yourself) no less than 17 separate models - not counting Lexus and Scion. Mercedes-Benz has doubled its lineup in the space of a decade and now sells (god help us) minivans. Honda, Nissan and the rest are similarly afflicted - and suffering, as a result. Everyone is trying to sell everything and it's just too much. It is very hard to make a sale (let alone a profit) when there is such a glut of offerings available.

    The herd must be thinned.

    Maybe we will see a return to the specialization that used to be such a successful business model. For instance, VW was much healthier when it focused on value-priced but high-precision/high-quality cars. It made a big mistake trying to be all things to all people - which only caused a shedding of its core customer base while failing to attract the higher-end buyers it wanted.

    Maybe trucks and SUVs should not be sold by everyone, either.

    And so on.

    * Overdone (and overpriced) cars are out -

    For openers, the distinctions that used to be obvious between "economy" cars and "luxury" cars aren't so obvious anymore - other than in terms of price. Yes, you can pay $40,000 for a car. But an $18,000 car will have most of the actually useful features and equipment that used to separate a luxury car from a car for the Masses - things like climate control AC, power windows, locks, cruise control; a nice stereo, etc.

    The car companies have been desperately trying to re-establish the distinction (and justify the silly MSRPs they're asking) by incorporating more and more essentially useless equipment (high-powered engines that won't get you anywhere faster on today's traffic-jammed roads; comically overwrought electronic "aids" such as mouse controllers, etc.) into their middle and higher-end product.

    But people are not buying that anymore. It has dawned on them - via the blunt force trauma of economic collapse - that they don't need this stuff and can get by fine without it.

    More bluntly, the idea that average people can - or should - be driving around in $40,000 (or even $30,000) cars is headed for the same place that no-doc mortgages went. It was a Potempkin Parking Lot financed by pyramid debt that has since collapsed and which cannot be resurrected. Newsflash: The average family income in this country is under $50,000. Cars - if they are to be sold based on ability to pay off the loan - will have to have their MSRPs adjusted accordingly.

    Either that or the spending power of the average American will need to be brought in line with the cost of new cars. Which do you suppose is more likely to happen?

    In sum, I predict we'll see several fewer brands of cars - and many fewer cars - by this time next year. The ones left standing will also be less frilly - and cost a lot less, too.

    It will be rough on those who are going to lose their jobs, obviously - but the coming contraction is both necessary and inevitable.

    We should have seen it coming, of course. But that doesn't mean we can do anything to stop it from happening.

    Not anymore.
    Last edited by Eric; 02-14-2009 at 03:41 PM.

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    I think Buick and Pontiac will go. GM should fold the unique (Buick and Pontiac) models (that are selling well) into Chevrolet. To be more competitive GM should upgrade the interiors on some models. Do away with the bling, and make them more European. A good design doesn't cost any more, and I think would attract more buyers.

    Expensive cars are expensive to repair. If a 'gadget' breaks (after the warranty period) it could easily cost $500 - $1000 to fix. After 3 yrs your $50k car, is worth $22k, and you could be looking at paying 5% of the value of the car to fix something like a power seat.

    Volvo has a BLIS - Blind Spot warning system. It uses some sort of radar integrated in the outside mirror. A friend broke the drivers mirror (hit the garage) - it cost $1100!!!! to replace the mirror. I had a factory 6 cd changer - it cost an obscene amount to get it serviced. See how much it costs to replace a Xenon headlamp assembly.

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    Quote Originally Posted by dBrong View Post
    I think Buick and Pontiac will go. GM should fold the unique (Buick and Pontiac) models (that are selling well) into Chevrolet. To be more competitive GM should upgrade the interiors on some models. Do away with the bling, and make them more European. A good design doesn't cost any more, and I think would attract more buyers.

    Expensive cars are expensive to repair. If a 'gadget' breaks (after the warranty period) it could easily cost $500 - $1000 to fix. After 3 yrs your $50k car, is worth $22k, and you could be looking at paying 5% of the value of the car to fix something like a power seat.

    Volvo has a BLIS - Blind Spot warning system. It uses some sort of radar integrated in the outside mirror. A friend broke the drivers mirror (hit the garage) - it cost $1100!!!! to replace the mirror. I had a factory 6 cd changer - it cost an obscene amount to get it serviced. See how much it costs to replace a Xenon headlamp assembly.

    I think Saturn is going to bite it myself. Saturn, once seen as the import fighter is a brand searching for an identity. There is nothing in their brand lineup that stands out and after losing its plastic panels and the Made In Tennessee cachet, it is just another rebadged GM car. Saturn was starved for cash at critical points in its lifetime. Its unfortunate that it never made a dime.

    I like the interiors of many GM cars and some Fords even more.

    I think that Eric is spot on when it comes to the state of the car industry.

    I think that people got way too used to too much bling. Cars have needed to be simpler for quite some time. I don't think that we all need power seats, power windows, etc. I may sound like a hypocrite, but I drove just such a car for 8+ years. It wasn't and still isn't bad.

    I just hope that the car makers don't try and take out quality by that infamous "decontenting" scam that they pulled off about a dozen years ago. It was garbage. They got rid of good materials to make room for power seats, smooth operating switchgear and airbags.

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    Senior Member misterdecibel's Avatar
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    Saturn has chosen not to import any 2009 Astras, because they still have enough of an overstock of unsold 2008 ones to see them through to the 2010 model year introductions.

    I agree, Saturn is circling the drain, as is Pontiac.

    Chrysler - their RWD sedans are based on a platform from the mid-1990s, I think that's older than the 2nd-gen Neon bits that underpin the PT Cruiser. Sebring, Caliber and the truck are the only designs they have from this century.

  5. #5
    Senior Member grouch's Avatar
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    Quote Originally Posted by misterdecibel View Post
    Saturn has chosen not to import any 2009 Astras, because they still have enough of an overstock of unsold 2008 ones to see them through to the 2010 model year introductions.

    I agree, Saturn is circling the drain, as is Pontiac.

    Chrysler - their RWD sedans are based on a platform from the mid-1990s, I think that's older than the 2nd-gen Neon bits that underpin the PT Cruiser. Sebring, Caliber and the truck are the only designs they have from this century.

    The PT Cruiser is the last of the K car based cars. Minivans were built on the same platform until AWD came in.

    Saturn has had poorer quality each year since it was introduced. My sister is on her 6th Saturn (there was this heavy rain and on a dark night, it's hard to tell the road is flooded) and it will be her last. The Saturn Ion she has is just a dressed up Cobalt, which was a redesigned Cavalier which was the follower of the marvelous Vega.

    Ford seems to be getting a handle on quality but really needs to update their designs.

    Imports like Toyota and Honda have kept prices up without being a whole lot better than the competition. Hyundai is actually a pretty decent car anymore. At one time, Hyundai and Kia (same company now) were the last resort for poorer buyers. I've seriously looked at them recently.
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    Quote Originally Posted by grouch View Post
    The PT Cruiser is the last of the K car based cars. Minivans were built on the same platform until AWD came in.

    Saturn has had poorer quality each year since it was introduced. My sister is on her 6th Saturn (there was this heavy rain and on a dark night, it's hard to tell the road is flooded) and it will be her last. The Saturn Ion she has is just a dressed up Cobalt, which was a redesigned Cavalier which was the follower of the marvelous Vega.

    Ford seems to be getting a handle on quality but really needs to update their designs.

    Imports like Toyota and Honda have kept prices up without being a whole lot better than the competition. Hyundai is actually a pretty decent car anymore. At one time, Hyundai and Kia (same company now) were the last resort for poorer buyers. I've seriously looked at them recently.
    Fact check: The Ion came before the Cobalt. It was a unique Saturn platform, coming with plastic panels, etc.

    The Cavalier and the Vega are in no way related. The Cavalier was FWD and the Vega a RWD car.

    Toyota and Honda make some of the most boring cars on the planet. The 4 cyl Accord is a gas pig and I can imagine that the V6 is even worse. I would never sign a car note to make payments on an Accord or a Camry. I'd be bored to death long before the note is paid off.

    Kias are moderately interesting vehicles and I would consider a Sonata if I was in the market. At least the Sonata is assembled here.

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    Senior Member misterdecibel's Avatar
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    Quote Originally Posted by grouch View Post
    The PT Cruiser is the last of the K car based cars. Minivans were built on the same platform until AWD came in.

    Saturn has had poorer quality each year since it was introduced. My sister is on her 6th Saturn (there was this heavy rain and on a dark night, it's hard to tell the road is flooded) and it will be her last. The Saturn Ion she has is just a dressed up Cobalt, which was a redesigned Cavalier which was the follower of the marvelous Vega.
    You are misinformed. The PT Cruiser is a Neon station wagon. It has the same relationship to the Neon that the Chevy HHR has to the Cobalt. Same stylist did both the PT and the HHR, when he moved from Chrysler to GM. Did the Neon have any K-car roots?

    The Saturn Ion and Chevy Cobalt are both based on an Opel platform (some greek letter, forget which one, I can't keep up with them). They bear no relation to the old Cavalier.

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    Senior Member grouch's Avatar
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    Quote Originally Posted by misterdecibel View Post
    You are misinformed. The PT Cruiser is a Neon station wagon. It has the same relationship to the Neon that the Chevy HHR has to the Cobalt. Same stylist did both the PT and the HHR, when he moved from Chrysler to GM. Did the Neon have any K-car roots?

    The Saturn Ion and Chevy Cobalt are both based on an Opel platform (some greek letter, forget which one, I can't keep up with them). They bear no relation to the old Cavalier.

    Yes, according to a former Chrysler engineer, the Neon did have K car roots. While a bit ugly when it was new, and age didn't improve it, the K car was a decent car at a decent price. They improved the looks a lot when it was redesigned for the LeBaron Coupe and convertable.

    My sister got the same training when young that I did. She gets a lot out of her cars. She bought the first Vega, about 3 months after introduction. At 6 months old, I got in the car and shut the door fairly hard as it didn't like to latch. Rust fell through the headliner onto my head. When she got married, her new husband had a Cavalier and later on, my mother bought one. My sister pointed out the same design details as her Vega. She had gotten rid of it in '75 with 30K on the clock and it got 100 miles to a quart of oil.

    She currently has an Ion. It has the same cheapness about it as the Cavalier and Vega. They may not share the same platform, but they share the same cost cutting where a little extra care would make a car pretty decent.

    Chrysler used steel sleeves in the aluminum slant 6 in '61. GM didn't put them in the Vega engine until '75. Once they did that, it was darned good engine and was used for years. GM just trys to cheap out and then improve after consumer complaints. Look at the Corvair. When it ended production, it was a well designed car and quite reliable. The first ones weren't. The Vega was a much better car when production ended and the basic platform went on for many years afterward as the Monza. I sold a Sunbird (Pontiac version of the Monza) to a fellow after the engine failed (in 2005) and he planned to drop a 350 in it.

    This is the biggest reason American cars suffer from a quality control perception problem. Toyota has problems but they try to correct them as fast as possible. I know several folks who work at the Gibson county plant (for now) and they take quality control seriously. As for the Toyota Camry being a slug or a gas hog, I've got one and regularly get 22-28 mpg. I see peole advertise them as 30-35 but I figure that's down hill with a tail wind or off a cliff. I'm not a small person and I fit just fine, it rides okay on the highway and handles quite well.
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    Vulture of The Western World Eric's Avatar
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    Good points; sad to day, but you're spot on.

    The tragedy is that GM sours the public on ideas that are basically sound - sometimes, even outstanding.

    The Corvair is a great example. So is the Vega. And the Fiero. And the diesel V-8.

    Etc.

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    Senior Member misterdecibel's Avatar
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    Speaking of Neons, when was the last time you saw one? They already seem to be mostly gone from the roads around here, even the 2nd generation models. Very high rate of attrition.

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    Vulture of The Western World Eric's Avatar
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    Quote Originally Posted by misterdecibel View Post
    Speaking of Neons, when was the last time you saw one? They already seem to be mostly gone from the roads around here, even the 2nd generation models. Very high rate of attrition.

    I have noticed this, too. It does not speak well for Chrysler, does it?

    Old Corollas are everywhere, though....

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    Senior Member grouch's Avatar
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    Quote Originally Posted by Eric View Post
    Good points; sad to day, but you're spot on.

    The tragedy is that GM sours the public on ideas that are basically sound - sometimes, even outstanding.

    The Corvair is a great example. So is the Vega. And the Fiero. And the diesel V-8.

    Etc.

    A friend bought a brand new diesel 1/2 ton pickup when Chevy started making it. Paid cash up front and waited. His truck came in and he picked it up. On the way home, he noticed a large, 6X8 inch sticker on the dash. He was pissed. Here is a pick up to haul stuff and tow a light trailer, oil burner for economy and reliability, and a sticker on the dash says "This vehicle is not designed to haul loads or tow trailers". What a bummer. He trade it off in less than a year as it didn't get good mileage and couldn't get out of it's own way.
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    Senior Member grouch's Avatar
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    Quote Originally Posted by misterdecibel View Post
    Speaking of Neons, when was the last time you saw one? They already seem to be mostly gone from the roads around here, even the 2nd generation models. Very high rate of attrition.

    I see a lot of them around here. They are usually owned by younger drivers and those types of drivers tend to be rough on equipment. I also see a lot of them stuffed into ditches or allowed to throw a timing belt, thereby grenading the engine.
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    Senior Member Kwozzie1's Avatar
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    Seems the auto makers have each tried to corner every sector of the market

    GM Holden here brought out the Adventra..... A AWD version of the Commodore wagon. Idea was good BUT a range of 350kms for the V8 made it bloody useless for outback Australia....damage done and the V6 didn't save it.

    The should have stuck to building basic good cars/wagons.
    Heck to look at their HSV models....they are still just a titivated Holden Commodore!!

    If I was to spend that type of money I would buy something exotic
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    Senior Member misterdecibel's Avatar
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    Quote Originally Posted by Eric View Post
    I have noticed this, too. It does not speak well for Chrysler, does it?

    Old Corollas are everywhere, though....
    And the Neons I do see are beaters. Every one seems to either have faded paint or the peeling clearcoat issue.

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