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Thread: What the American Car Market Needs

  1. #1
    Vulture of The Western World Eric's Avatar
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    What the American Car Market Needs

    GM is still running ads for its cashiered Pontiac and Saturn brands. Chrysler is still selling the same out-of-date cars it was selling (or trying to, at any rate) before it went bankrupt. The government, meanwhile, is trying to force-feed the public $40,000 "economy" cars like the pending all-electric Chevrolet Volt.

    This is not what the industry - or the American car buyer - needs.

    Here's a list of what they do:

    * More affordable cars -

    Gas mileage is much less relevant than sticker price/cost of ownership. What good is a $40,000 electric car like the Chevy Volt to a family with an annual income (pre-tax) of $40,000? Not to mention the peripheral costs associated with a $40k car (or a $20k car) such as insurance and personal property taxes - both of which are higher on higher-priced vehicles. Then there is maintenance - which costs more if the car is complex/has unusual technology - like electric motors and lithium batteries, etc

    We've been hearing (rightly) all about the debacle caused in the housing/financial markets by issuing mortgages for half a million dollars to people with five figure incomes. Well, how is this any different from encouraging people of modest means to purchase "economy" cars that cost as much as luxury cars?

    People worried about gas are people worried about money - and people worried about money want inexpensive cars.

    Gas mileage, as such, is irrelevant.

    What America needs, therefore, is more low-priced ($10,000 and under) new cars. Such a car, even if it gets "only" 30 mpg, is much more economical than a $25,000 hybrid or a $40,000 electric car.

    The problem is, there's only one such car on the market right now - the 2010 Nissan Versa 1.6 (MSRP $9,990). Part of the reason for this is simply that it's damn hard for any automaker to build a car that makes the $10k and under cut - and which also meets the federal government's laundry list of regulatory requirements, in particular, bumper impact and crashworthiness regulations. Dual air bags alone add about $800 to $1,000 to the sticker price of every new car.

    Now, granted, a 2010 econo-box is a safer place to be than a 1980s-era econobox (or even more so, a '60s or '70s-era econobox such as the original VW Beetle). But it's also a lot more expensive (as well as heavy, which hurts gas mileage).

    And what good is a theoretical safety advantage if you can't afford to buy the car?

    Many buyers would probably be ok with a car that might not be as crashworthy as the government insists it ought to be - but which could be purchased for a lot less. After all, most of us don't get into a catastrophic wreck in any given 10-year period (if ever). It's not a crazy risk to drive a car that may not be as "safe" if involved in a major crash - which may never happen - but which is much cheaper and more efficient every day we drive it.

    * We need more diesels -

    Not too many years ago one could buy a diesel-powered small pick-up that got 40 mpg (better than a new Honda Insight hybrid) and which would run just about forever (even if the body might rust away long before then).

    What happened to such vehicles? Three letters: EPA. The smog police came down hard on diesels for their "particulate" (soot, in plain language) emissions, effectively banning the things from the U.S. market. It was not unreasonable at the time, but when diesels changed, the EPA did not. European governments imposed strict emissions standards and the auto industry met them all - and was soon selling all sorts of high-mileage, high-powered (and clean running) turbocharged, direct-injected diesel vehicles over there. But our EPA made it impossible to sell these vehicles here, or at the least, extremely difficult.

    Now we have the same "clean" (low sulfur) diesel fuel as the Euros do and the government should encourage the selling of as many diesel powered vehicles of all types as possible. Unlike hybrids and electrics and economy subcompacts, modern diesels are no-compromises machines. You can have very high efficiency, very high-performance and affordability and longevity, too - all in the same package.

    We need more of them. Lots more.

    * We need fewer brands, makes and models of cars -

    This process is, at least, already under way - although reluctantly and not nearly as aggressively as should be the case. GM - thanks to the artificial support of taxpayer bailout money - is still clinging to four brands (six if you count Holden in Australia and Opel in Europe) when market forces would otherwise have forced it to winnow that down to two (a "regular" brand and a "luxury" line). Chrysler needs Dodge like Simon needed Garfunkle. Why is Mercury still around? How many different versions of the same basic "crossover" or "minivan" or "SUV" do we really need? Etc.

    The US car market is as glutted with excess inventory as John Madden's arteries are choked with bacon drippings. This is killing profit margins for almost everyone on both new and used cars - which isn't good for business even if it is (temporarily) good for the car-buying consumer.

    The handful left, anyhow.

    What's needed is a wholesale culling of brands, makes and models that aren't viable on their own. For this to happen, Uncle needs to get out of the way and let 'em sink or swim on the merits. It's true people will lose their jobs, directly and indirectly (suppliers, aftermarket, etc.). But this is going to happen anyhow. Federal boodle is just delaying the inevitable and, arguably, making it worse by allowing the illusion to last longer than it would on its own.

    Which is better, ultimately: Six or seven "mainline" brands, each with a full range of models, plus a couple of specialty brands (like Porsche, for instance) that actually sell cars at a decent profit and are thus economically sustainable? Or a dozen "mainline" brands, some of them selling cars under two or even three different labels, squeaking by on iffy profit margins and almost always staring down the abyss of a looming bankruptcy?

    These are just three humble prescriptions. They might not be a cure-all.

    But they would be a start.

  2. #2
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    I remember 1960 - For Chevrolet there was the Biscayne, Belair, and Impala.

    The difference was the Biscayne had only two tail lights (left/rear), the Belair had the same but more trim. The Impala had three tail lights - one of which was a back-up light. Naturally, Pep Boys sold 'kits' to convert your Biscayne to an Impala.

    How much longer does Detroit think people will fall for this BS?

  3. #3
    Vulture of The Western World Eric's Avatar
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    Quote Originally Posted by dBrong View Post
    I remember 1960 - For Chevrolet there was the Biscayne, Belair, and Impala.

    The difference was the Biscayne had only two tail lights (left/rear), the Belair had the same but more trim. The Impala had three tail lights - one of which was a back-up light. Naturally, Pep Boys sold 'kits' to convert your Biscayne to an Impala.

    How much longer does Detroit think people will fall for this BS?
    That kind of thing actually did work for many years - when the US market was owned by the Big Three, foreign cars were few and far between and the idea of a Japanese-brand luxury car would have seemed laughable and the notion of Korean (or Chinese) cars ridiculous.

    Circa 1970, Chevrolet - alone - sold more cars than all of GM does today.

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    Well put. This is what I have beens screaming for years. No one listens. They need to decontent these cars putting in manual windows, locks, etc instead of every conceivable power gadget.

    Here's what Henry Ford II said years ago about the American car market. It's funny how things have stayed the same. Just the players have changed.

    "Americans like to blast along interstate highways at eighty miles an hour, windows up, air conditioning on, radio going, one finger on the wheel. That's what they want and that's what we manufacture. We make the best cars we can to meet the tastes of the American people.."

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    Quote Originally Posted by dBrong View Post
    I remember 1960 - For Chevrolet there was the Biscayne, Belair, and Impala.

    The difference was the Biscayne had only two tail lights (left/rear), the Belair had the same but more trim. The Impala had three tail lights - one of which was a back-up light. Naturally, Pep Boys sold 'kits' to convert your Biscayne to an Impala.

    How much longer does Detroit think people will fall for this BS?
    I would have chosen the Bel Air or the Biscayne. Make mine a 1962 with the bubble windows.

  6. #6
    Vulture of The Western World Eric's Avatar
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    Quote Originally Posted by swamprat View Post
    Well put. This is what I have beens screaming for years. No one listens. They need to decontent these cars putting in manual windows, locks, etc instead of every conceivable power gadget.

    Here's what Henry Ford II said years ago about the American car market. It's funny how things have stayed the same. Just the players have changed.

    "Americans like to blast along interstate highways at eighty miles an hour, windows up, air conditioning on, radio going, one finger on the wheel. That's what they want and that's what we manufacture. We make the best cars we can to meet the tastes of the American people.."
    I think the consumer also shares blame - as Ford's quote reveals. But it was debt and credit that enabled the situation we have today: That is, "over-contented" new cars with more luxury equipment (even economy-type cars) than most luxury cars had 20 or 30 years ago.

    I'm not opposed to nicer cars; I'm opposed to ever-more-expensive cars that require us to get into deeper and deeper debt to "buy" them!

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    Post Unions are the problem.

    The real problem with Detroit -- and the reason Obama cheated the proper beneficiaries of bankruptcy (the secured bond holders) out of their money -- is that it's a way for his corrupt administration to give more money to the unions who bought him his job.

    All labor unions are gangs of bullies, no different morally from the mobs that ran Chicago during Prohibition. They extort money from employers and their fellow employees, supposedly to help those employees, but in fact most of it goes to fund Democratic political campaigns, thus turning the whole election process into the same kind of sick joke that the union-representation-election process will become if Obama succeeds in getting card-check enacted.

    Meanwhile US auto makers are placed under a huge burden which will prevent them from ever being competitive again. I predict that Obama will have to pull us out of WTO and NAFTA and reimpose huge taxes on imported cars (and find bogus regulatory pretexts with which to shut down non-union factories in the US such as those of Nissan and VW), because unless that happens, GM and Chrysler will continue to bleed tax dollars and go broke again in a year or two.

    Unions will be the death of the US if they possibly can. Boycott them. Boycott companies they control. And especially boycott GM and Chrysler, both of which are now stolen property.

  8. #8
    Vulture of The Western World Eric's Avatar
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    Quote Originally Posted by jdg View Post
    The real problem with Detroit -- and the reason Obama cheated the proper beneficiaries of bankruptcy (the secured bond holders) out of their money -- is that it's a way for his corrupt administration to give more money to the unions who bought him his job.

    All labor unions are gangs of bullies, no different morally from the mobs that ran Chicago during Prohibition. They extort money from employers and their fellow employees, supposedly to help those employees, but in fact most of it goes to fund Democratic political campaigns, thus turning the whole election process into the same kind of sick joke that the union-representation-election process will become if Obama succeeds in getting card-check enacted.

    Meanwhile US auto makers are placed under a huge burden which will prevent them from ever being competitive again. I predict that Obama will have to pull us out of WTO and NAFTA and reimpose huge taxes on imported cars (and find bogus regulatory pretexts with which to shut down non-union factories in the US such as those of Nissan and VW), because unless that happens, GM and Chrysler will continue to bleed tax dollars and go broke again in a year or two.

    Unions will be the death of the US if they possibly can. Boycott them. Boycott companies they control. And especially boycott GM and Chrysler, both of which are now stolen property.

    Hi JD,

    Welcome to the site, first of all!

    I agree with you on Obama; not entirely on unions. In principle, the notion of collective bargaining seems ok to me (provided individual workers are not coerced) as a counterbalance to the power of a large corporation. The auto industry was heavily unionized during its period of greatest success and is in fact less unionized now than it was then.

    I agree unions are prone to corruption and to acting in bad faith - but so are corporations.

    The problems besetting the auto industry run a lot deeper than just the unions, though the UAW has been making matters worse for the industry (and, ultimately, itself) during the past few years.

    One of the factors that really crippled the US car industry was he passage of the original Clean Air Act, which gave the Japanese a huge, artificial (imposed by government) leg up on the domestics. GM, Ford and Chrysler never really covered from that.

    NAFTA was another huge blow, indirectly as well as directly.

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    Senior Member J. ZIMM's Avatar
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    Well, the news is out. GM lost money as well as Chrysler. OUR MONEY! It came out today in the news. Both about 33-35%. Still could be a chance they both could go under. Great move Obalama. The stimulus Monies still should have gone to the people,, not to the CEO's and Automobile Guru's. I agree, there is no reason cars need all the fancy crap that's in them now. GPS is nice, but how many fender benders have happened because of some one trying to program them while driving? Of course, unfolding a Map at 80 isn't the smartest move either. How many Cd's have been dropped while whipping down the road at 80 miles an hour? Of course we also have CELL PHONES. One of the biggest causes of accidents and/or road rage. Thank God our State has finally past a law prohibiting the use of them while driving. That includes Texting. GM and Chrysler didn't make any points here by closing up all the Dealerships in this area. Ford is still here. In-fact, we have two within Twenty miles of each other. Maybe thats one of the reasons Fords Sales are up for the same time period. If the CEOs would just make plain, simple, basic cars, excluding the Vega, Pinto, and Monza, just to name a few, that would give the public good, safe, dependable transportation. Then maybe, they would pull their collective heads out of their butts. We opted for change, and boy, did we get it.

  10. #10
    Vulture of The Western World Eric's Avatar
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    Quote Originally Posted by J. ZIMM View Post
    Well, the news is out. GM lost money as well as Chrysler. OUR MONEY! It came out today in the news. Both about 33-35%. Still could be a chance they both could go under. Great move Obalama. The stimulus Monies still should have gone to the people,, not to the CEO's and Automobile Guru's. I agree, there is no reason cars need all the fancy crap that's in them now. GPS is nice, but how many fender benders have happened because of some one trying to program them while driving? Of course, unfolding a Map at 80 isn't the smartest move either. How many Cd's have been dropped while whipping down the road at 80 miles an hour? Of course we also have CELL PHONES. One of the biggest causes of accidents and/or road rage. Thank God our State has finally past a law prohibiting the use of them while driving. That includes Texting. GM and Chrysler didn't make any points here by closing up all the Dealerships in this area. Ford is still here. In-fact, we have two within Twenty miles of each other. Maybe thats one of the reasons Fords Sales are up for the same time period. If the CEOs would just make plain, simple, basic cars, excluding the Vega, Pinto, and Monza, just to name a few, that would give the public good, safe, dependable transportation. Then maybe, they would pull their collective heads out of their butts. We opted for change, and boy, did we get it.
    GM and Chrysler should have had to try to secure private loans for their restructuring. If that didn't work out, then it would be just more evidence of the "unfixability" of these companies. In their defense, though, they are forced to make products that the government demands as much as consumers want.

    For example, air bags. I know there are millions of people who, if they were given the choice, would elect to skip this feature and thereby save at least $1,000 on the price of their next new car. But the government forces the automakers to install them - and us to buy them. Factor in all the government mandates and the cost of a typical new car is several thousand dollars higher than it would otherwise be.

    Consumers, meanwhile, have been brainwashed like Pavlov's dogs to salivate at the mere mention of new electronic baubles. Gotta have GPS! Gotta have a DVD player and a 12 speaker stereo with 30 GB music hard drive... power everything is thus considered the bare minimum rather than luxury amenities.

    Finally, these same consumers have been taxed to death, their assets eaten away by inflation and their economic stability destroyed by "free trade" policies that cater to the worst instincts of corporations to exploit the stoop labor of the world to maximize their (short term) profits at the (long term) expense of the very consumers they ultimately depend upon - who quickly lose first their ability to buy the products and finally, their ability to assume debt to acquire them.



    Bottom line - the public is depraved and addled, the corporations corrupt and the government inept and tyrannical at the same time.

    The only fix? Throw it in the woods. The whole stinking shitpile. And start over.

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    Quote Originally Posted by Eric View Post
    I know there are millions of people who, if they were given the choice, would elect to skip this feature and thereby save at least $1,000 on the price of their next new car. But the government forces the automakers to install them - and us to buy them. Factor in all the government mandates and the cost of a typical new car is several thousand dollars higher than it would otherwise be.
    You can lease a BMW 328 fully equipped for the same price as a Buick LaCrosse!

    The Chevy Volt - $40,000 for a compact car??

    I predict these companies will continue to hemmorage cash.

    Quote Originally Posted by Eric View Post
    Consumers, meanwhile, have been brainwashed like Pavlov's dogs to salivate at the mere mention of new electronic baubles. Gotta have GPS! Gotta have a DVD player and a 12 speaker stereo with 30 GB music hard drive... power everything is thus considered the bare minimum rather than luxury amenities. .
    Once the car is out of warranty the cost to repair any of these items probably represent 10% - 15% of the depreciated value of the car.

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