Look for some fuel efficient vehicles coming out of Detroit in the next couple of years:
October, which is the start of the new model year, used to be a month for the auto industry to celebrate. This year, it was a month for Detroit to forget.
General Motors, Ford and Chrysler held their lowest shares of the American market ever last month. Sales fell in the wake of high gasoline prices, fears about the economy and consumer resistance to buying cars without the big discounts the companies offered this summer.
General Motors and Ford were hurt the most, with G.M. sales dropping 25.6 percent compared with October 2004 and Ford sales down 26.1 percent.
Big sport utility vehicles, on which Detroit based much of its resurgence in the 1990’s, did even worse, with sales of some of the largest S.U.V.’s, the Ford Expedition and the Cadillac Escalade XLT among them, falling by half or more.
But Asian auto companies performed much better, recording their biggest share of the American market ever.
This wasn’t hard to see coming, and hopefully will lead to a long term change in attitudes for consumers and auto manufacturers. Maybe a big enough change that it will trickle up to Congress and the administration, who will then either change the CAFE standards or just end the charade and get rid of them.
Bob In Pacifica
There was talk that Toyota was going to convert some of the lines in their Hayward, California plant, from plain old Corollas to the Priuses, and maybe one of the trucks or SUVs with a fuel-efficient engine too.
Funny, Toyota, building fuel-efficient cars right here in America. Remember when people in Detroit would club an Asian to death with a baseball bat because he was perceived as of the race responsible for the loss of their jobs.
I remember how growing up in New Jersey, Jewish friends’ parents would get upset when a VW drove by. I used to have a grudge against Mitsubishi myself, considering their history of making the Zeros. You know, corporate complicity in Pearl Harbor. That was before I found out about Henry Ford and Adolf Hitler, and how GM’s factories in Europe were building trucks and tanks for the Nazis.
tzs
John, I’m afraid you’re assuming too much intelligence on the part of US car companies. It would be nice.
Anyone with half a brain in his head could have seen this possibility coming a long way off–why didn’t Detroit start doing something? Nope, just churning out more fat SUVs.
And I’ve noticed that Korean car manufacturers are getting into the area of efficient, high quality cars as well. So the pressure on the car market is even higher.
Stormy70
I am looking at the Toyata Highlander Hybrid for my next vehicle. My Tacoma is nice but I think I want the SUV now.
tzs
Oh, by the way, Bob–I got to see one of the Zeros down at MHI in Nagoya. We had gone down for some microgravity flight tests and I had some time to wander around–they’ve got one in a small museum there.
What is it about US engineering? We used to be the best in the world on this! I have no sympathy for the pickle the US car manufacturers have put themselves into. Their only chance for renewal, I see, is to come out with something so fantastic, so radically different, that they grab the lead again. Electric cars or hybrid cars might have done it, but GM’s history in this area is unfortunately about as backwards as their reaction to the Japanese imports, way way long ago.
That’s what I cannot forgive US car companies for–that they had this marvelous technological capacity and refused to do the hard work to stay on the cutting edge.
Moral of the story: never let the bean-counters take charge of your technological development.
Dave Schuler
Don’t expect to see low-cost fuel efficient vehicles from Detroit any time soon. And cussing the auto executives for focussing on SUV’s and other vehicles with high margins doesn’t do much good, either.
It costs about the same to manufacture a big car as a small one. People are generally willing to pay more for big. Detroit has a large per-vehicle burden in the form of employee pensions, healthcare plans, etc. to pay (more than $1,500 per car). That makes it pretty darned tough to compete with Japanese and Korean competitors on price.
Vlad
“Detroit has a large per-vehicle burden in the form of employee pensions, healthcare plans, etc. to pay (more than $1,500 per car).”
If only there were a government health plan to provide universal care for workers…
Personally, I’m not holding my breath on a quality hybrid from Detroit any time soon. They’ve been making cars for a hundred years now, but a small sedan with a decent manual transmission is still beyond their grasp.
tzs
I’ve been hearing the whining about health-care/pension/whatever burdens for so long from Detroit and how it’s due to that they can’t compete….that I don’t believe it anymore. We were hearing it back in the 70s and it was used as an reason to not make small, energy-efficient vehicles. (Aside from the “Americans won’t buy small, energy-efficient vehicles.”)
A burden that’s around for 35 years that a company can’t find a way to factor into their business plans isn’t a burden, it’s an excuse.
DecidedFenceSitter
They can factor it into their business plan. It just does not create as strong a business plan on those who do have to deal with health-care issues.
Let’s say, for the sake of argument, that the fact that Health Care does not need to be factored into the foreign car price the same way it needs to be factored into an American car. This savings, for the point of argument, I will irrationally deem at 10%; meaning that the exact same car built by a foreign automaker will cost 90% less than the one built by an American automaker.
How do you come up with that extra 10% to remain competetive. You’ve already tossed out keeping the higher price.
You can:
Reduce Benefits/Pay, which I feel would have an undue social burden; or
Reduce materials, which would result, I believe, in a cheaper, worse car.
Mr Furious
Nice points, everyone, especially tzs. It’s true. We’ve been hearing this shit for thirty years.
Stormy-I have a friend who just waited six months for that Highlander hybrid, and he loves it. Traded in an Explorer and doubled his gas mileage.
Bullshit. It might be true that there is a healthcare “surcharge” on these cars, but it isn’t why nobody is buying them. That is a bullshit excuse. People are perfectly willing to pay MORE for comparable Japanese cars. My friend mentioned above waited six months and paid full sticker price for that hybrid.
We bought a Honda Odyssey a few years back and could have bought an American minivan for thousands less. Why? We KNEW the Honda would be superior in every possible way. It has a 250 hp V6 and still gets 26 MPG (both the best at the time), it was the only van (at the time) with a seat that folded into the floor—a HUGE factor, and it was far and away the best-looking van available. Others have caught up to my van and Toyota has surpassed it, and now the Honda is now 8-10 grand more than I paid for mine, meaning I would not buy another one, but when one is paying 27-30K for a car, there is more in the decision than the $1500 differences in price, especially when financing over five years.
The products don’t stack up. It’s that simple.
Mr Furious
I should note, that if I had gotten a new job in time, I would have bought a GM product (sort of) this summer with the Employee Discount plan. I was seriously considering the Pontiac Vibe (really a Toyota Matrix) or a Saab 92 (really not even a Saab, but a Subaru). Alas, it is November and I am still driving my old Jetta to my old job.
GM has quite a few good cars out now, and in the chute (Solstice), but way too much dead wood, a bunch more gas-guzzlers coming out and their structure is totally fucked up. I’ve been pondering a long post on this whole thing, perhaps the time has come…
Frank
meh I don’t feel any sympathy for the auto execs, but they hardly need my sympathy since they make millions a year. I feel kinda bad for the workers, even though I think there is something to the idea that unions have made matters worse.
The notion that health care is the problem seems somewhat false to me, sure German and Japanesse companies don’t need health care plans, but they still have to pay for health care through their taxes.
The real problem is that the auto execs know that no matter how badly they do there will never be any personal consequences that matter.
tzs
Well, that’s where you have to work on a two-prong strategy: lower the benefits/pay burden–>get national health care or something similar, and b) do such great engineering that people will gladly pay a higher price for your car.
I mean, we choose cars on something more than just price. We look at quality and robustness and ease of handling etc. Otherwise we’d have all been buying Yugos back whenever.
I can expect my Nissan, with car, to last over 200,000 miles. How many American cars can you say have the same quality?
I know that the quality of present-day US vehicles is getting better, but they’ve got a long hard haul ahead of them. They trashed their own reputation and are having to overcome it.
It might almost be better if GM were to try to start again from the ground up under a different name.
I’d also feel more sympathetic to the US car manufacturers were it not the fact that none of them have been acting like leaders. Why didn’t the top brass take cuts in their own salaries and perks to show they were serious about belt-tightening? When a company CEO asks for the rank-and-file to take a cut but isn’t willing to take the same sacrifices, we know they’re not really serious–it’s just verbal flappage. “A leader never asks of his men what he does not first demand of himself.”
(Getting back to national health insurance, can anyone explain to me why it is such a lightening rod to the right? My own system would be: national health service at a basic level for everyone who wants. Part of your taxes are earmarked for this. In exchange NHS gets to nag you about your health and coming in for check-ups. If you wanted to jump the queues, go to a private clinic/health provider, pay for it anyway you want. If you don’t like any of this, you can avoid paying NHS taxes and opt out of the system totally, but you don’t get to jump back in later. You get to use private clinics and private insurance any way you want.)
Steve S
This statement fails to recognize that a large part of the benefits/pay issue with GM is a result of their loss of market share. That is, they have an large burden from retirees. That would not have been a problem if they were a growing company… But now they pay benefits to more retirees than they do employees.
The second point, about reducing the cost of the car, fails to acknowledge the change in the market place.
Americans aren’t buying Yugos. They aren’t buying 1977 Honda CVCC, or VW Rabbits. They are buying increasingly better quality psuedo-luxury cars. A Honda Accord today is as luxurious as a Mercedes of 20 years ago. Leather seats, climate control, etc. etc.
The Europeans learned this… they aren’t making cheaper cars to sell in the states, they are making higher quality cars. Look at what VW did to turn around their fortunes. The pre-2000 Jetta was a POS, but today’s Jetta is a luxury sedan by comparison. BMW sales have been strong, as have Audi.
No, I’m sorry. The problem GM faces is they’ve been listening to Wall Street’s advice. They stopped loving cars as a result, and the buyers see that.
jg
For my most recent car purchase I went german. I can afford a better car now so there’s no reason to continue buying american. We can build the best cars but I doubt we ever will again. My theory on one reason we are so far behind germany and japan is WWII. After the war they had to scrap their weapons programs, so their engineers went to the auto and electronics industry. Our best and brightest worked on stealth and space shuttles instead of anti-lock brakes. We’re behind because we’re allowed to build bombs. Not sound enough for a college thesis paper but good enough for me.
I have two cars, a 99 Pontiac Grand Prix FWD automatic and a 01 BMW 330Ci RWD manual. Guess which one is more fun to drive?
ppGaz
Because Big Pharma / Big HMO want free rein to fuck you over forever and keep you paying some of the world’s highest medical bills … to, or through, them. They don’t care that they are pricing health care out of reach of many citizens. They just want to keep telling you their lies (example: We can’t have new drugs unless there are huge, rich corporations with billions to spend on research … billions we wouldn’t have under — Boo! — Socialized Medicine).
Not exactly rocket science. Follow the money and the manipulation.
ppGaz
Why don’t Toyota and Honda have big pension burdens? Their country features very-long term employment profiles.
It’s because workers in Japan don’t have to forage for medical care.
Japan Statistics
ppGaz
?
My son comes over in his Audi something-or-other. But when we go out and about, he wants to ride in my Mustang.
People don’t come over to talk about the Audi when you are filling it up at the gas station. They want to talk about the Mustang.
Glen
jg is admirably on point. Those of us of the generally left-libertarian school were aware of this since Seymour Mellman published “The Permanent War Economy” in 1974. A few copies can still be had via Amazon.
As for John’s original point, as a New Yorker I don’t have to drive, but I can’t feel great sympathy either for the makers or the buyers of Detroit’s vanity-oriented dreck. While on Long Island last weekend, I saw a “personal version” of a Hummer. Mother of God, it looked like a tank (as if such things are necessary in Manhasset). AND it gets about 8 mpg. My only satisfaction was know the idiot’s Visa melts down each time he fills the tank.
JP
Gas was cheap, people bought the marketing hype about SPORT utility vehicles, after all a van or station wagon isn’t as macho as a Canyonero… Then chrylser started making cars based on a previous generation Mercedes platform (The 300) but they are stuffing hemi’s into everything. It is REALLY hard to move away from what is selling. When gas shot up – they were screwed.
Plus, for some reason the big three never learned how to make anything but a V8 that was halfway decent. If you buy a Toyota or Honda, it may be on the bland side, but it will have a silky smooth inline four or V6 that will run forever and still have some resale value left in it.
I just bought my son a 1997 Chevy Malibu – $850. That is pathetic!
If the big three ever figure out how to compete, it will probably be too late for one of them.
jg
Audis are ugly, of course people are looking at the Mustang instead. What kind of Mustang? The new ones are pretty but I’ve yet to hear anything positive about them. The originals kick ass. The late 90’s early 00’s were ugly crappy pos’s. Then again I liked T-birds not Mustangs so maybe I’m biased. Well not the last T-birds, they sucked.
Some guy at a light was revving his old Camaro or something at me trying to get me to race him off the line. Bimmers aren’t known for straightline speed and I’m notr so good with a clutch so I wasn’t going to race him. I thought it was funny tho. He probabluy used half a tank of gas doing al the revving and he was sitting in a crappy pleather interior from the 70’s. Probably had one speaker and an 8 track too. Loud V8 tho.
ppGaz
It’s an ’05.
I call it my INDY car (Im Not Dead Yet).
fun > (barrel of monkeys)
jg
The new look is awesome. Ragtop? Black or red?
RA
What a socialist take on the whole issue. Detroit has to stop paying semi-skilled and unskilled union labor like princes. Lower their overhead and then they will be able to compete. They can build all the cracker box cars they want but people will not pay high prices for environmental friendly death traps.
ppGaz
You mean, like pension and healthcare costs? Because those costs go out the door as a no-value-added cost on every car.
ppGaz
Well, just in case a few rightwing zealots might be out here in AZ trying to track down a certain librul with a big mouth …. let’s just say, it’s a purdy one. Put a Flowmaster exhaust on it so you can definitely hear it coming.
Stormy70
I only get Toyotas. If you just do the routine maintenance then you are home free, and they drive like a dream. We own a Toyota Sequioya, and we love it. Great traveling car with great power. My husband drives it to and from work, about 5 milies total, every day so the gas does not eat us alive. Since I drive thousands of miles a year, I really want a hybrid SUV. I need to peer down at all the traffic in my life, which my Tacoma lets me do.
Stuber
I don’t know much about GM’s future lineup but Ford has a series of sister cars – Ford Fusion, Mercury Milan and Lincoln Zephyr – that are trying to take back sales from cars like the Toyota Camry. The buzz in Detroit showrooms is pretty positive already. Lord knows they need a car (not a truck or SUV) sales hit.
Bob In Pacifica
I just wanna know how much Pete Townsend’s kiddie porn problem cost that he’s had to pimp the entire Who catalog (with the exceptions of “Pictures Of Lily” and “Uncle Ernie”) to the auto manufacturers.
What ever happened to songs like “See The U.S.A. in your Chevrolet”?
ppGaz
I go along with your spouse …. reduce gas costs by living close to work. For me the diff between a 20mpg car and 30 mpg car is about $10 a week at $3 a gallon. Let’s just say, that ten bucks a week surcharge is well worth it considering I waited forty years to get a new Mustang, forty years of driving clunkers or practical family cars or sensible pickups …. Well, now the car is an entertainment system as well as a transportation device. So for ten bucks a week, I am going to have a little fun.
The missus drives the SUV because she likes a lot of sheet metal around her. As I like to say, I’ve seen her driving, and I concur, it’s a good idea ….
KB
“sure German and Japanesse companies don’t need health care plans”
Don’t know about the japanese but german companies have to provide health insurance plans for all their employees and their families. The company has to pay half of the cost of the plan with the employee kicking in for the other half.
Steve S
I drive a BMW 3-series. When it was brand new I had a guy come up to me in a gas station and say “You should have bought a Mercedes.”
I chuckled.
Americans in general are surprisingly uninformed about automobiles. That surprises me considering how many cars we buy and how much we drive.
stickler
Speaking of uninformed, look at Stormy’s excuse:
No, you don’t “need” to look down on the other traffic. You’re driving a four-wheel-drive in Texas? Lots of snowstorms down there to deal with? What Stormy doesn’t apparently know — and she shares this with 75% of American drivers — is that SUV’s and 4×4 pickups are not safer than sedans or vans. Oh, sure, if you hit a Civic you’ll be fine. But you’re twice as likely (or more, depending on the model) to be involved in a single-car, rollover accident.
And at least, if you’re wearing your mindless jingoistic patriotism on your sleeve, buy an American car.
Stormy70
Hello? I said I need to peer down at the traffic, not that I need all that metal around me. My pick up is not four wheel drive and it does snow in Texas. I grew up in the Panhandle where we get 6 inches of snow on top of 2 inches of ice. I handled that as a teen in a VW bug convertible (best car, evah!) I needed the pick up when I owned a home in GA on 2.7 acres, wooded with a creek. I hauled and built my own retaining wall with my own weathered rocks from my stream. I hauled plants from the nursery and garage sale finds home. Leave my Tacoma alone. He’s Pepe, the Little Mule. You’ll hurt his feelings. {Movie reference in there for all you movie buffs)
I am a Patriotic American who will buy anything I damn well please for whatever reason I damn well want.
We once owned a mustang, but it was the boring kind.
Krista
That’s one thing I’ve never understood, though. There are an awful lot of people who buy trucks or SUVs, and the farthest off-road they go is someone’s unpaved driveway. I currently own a ’98 Taurus…it was a great deal, and is in excellent condition, and I certainly cannot afford a new car, so the Taurus it was. I do want to get something different for my next vehicle, though…we do get quite a bit of snow and ice here, and in the summer, we tend to drive over godforsaken, badly rutted back roads while Geocaching, and I’d prefer a vehicle that can handle that a bit better.
jg
Better not be an automatic.
tzs
Stormy, have you ever tried a Liberty Jeep? How do you think they compare? I ended up renting one down in Dallas once (two conventions had wiped out everything else at the rental agencies, sheesh) and felt it drove on wet pavement the way my Nissan handles ice. I kept feeling it was going to tip over. One of my friends has a Honda CRV and swears by it. How does the Toyota handle the (unsealed) roads down in Texas?
Also, hey, commentators, don’t be so quick to assume that buying something from Toyota isn’t more patriotic than buying something from GM. What with Toyota manufacturing plants here in the US and GM manufacturing in China, you don’t know who your purchase is actually giving a job to.
ppGaz
Look me up when you come AZ. A ride and dinner will answer all your questions.
Vlad
My car got backed into in a parking lot by a lady in a bigass SUV last week. She said she couldn’t see my sedan through her rear window.
The lower edge of the bumper on that thing was about chin-height on me when I sat in my car. If I’d rear-ended her on the interstate, I would’ve been decapitated.
tzs
What someone is going to have to do is come up with something like ‘roo bumpers, except for SUVs….
And why is it the bigger the SUV the worse the driver?!
stickler
Good grief! Even the nickname is foreign!
The mind boggles.
Stormy70
You have to be careful cornering anything by jeep. I drove a regular jeep for a while, you just have to know to slow it down. All my Toyotas have handled all road conditions extremely well. If you are in the larger SUV, you have to be conscious of the weight, and adjust braking and turning accordingly. The Sequoiya has a V8 so the power is great for travel in the mountains. It also runs as smoothly as a Cadillac and goes easy on the back.
Good grief! Even the nickname is foreign!
I named him after a scene in Romancing the Stone.
I eat Korean, Mexican, and Indian food, too. I am all about the multi-cultural.
jg
How could someone not know what movie you referenced?
Stormy70
I really don’t know!
We really need a pop culture thread, stat! To sooth the savage beasties.
Krista
I agree…I’d finally know what I’m talking about, instead of talking out of my ass like I usually do. (Not that I’m alone…)
a guy called larry
John keeps trying with his BtVS refs…
a guy called larry
Ain’t that the truth. As a skilled tradesman in the Detroit area, I’m constantly aware of the failure of the industry to look up from the spreadsheet and stare at a clue once in a while. They spend billions on advertising these hulking POS vehicles, then claim that they’re simply supplying what the customers demand. You’d think they would’ve learned back in ’73, but noooooo…
rachel
KB Wrote:
Don’t know about the japanese but german companies have to provide health insurance plans for all their employees and their families. The company has to pay half of the cost of the plan with the employee kicking in for the other half.
The Japanese have a national medical plan. As I recall, it’s paid for by employer/employee contributions, and the government regulates all prices related to medical expenses. I remember some English students I had who were doctors complaining enviously that American doctors were able to charge far more than they’d ever be allowed to do. I also remember that these were some very well-off men.
South Korea, where I live now, has a similar plan.
tzs
Hey, has anyone dealt with the Nissan 350Z? I keep drooling over it but hear that it’s hard to see out the back of and you get a lot of feathering with the tires.
(Somebody’s gotta make a sports car with a decent-sized trunk.)
The other potential car I’m looking at is the Honda Insight, mainly for the gas mileage. Was wondering how sturdy it is, however. Some of the earlier high MPG vehicles turned out to be really bad in accidents.
What I wouldn’t give for a SmartCar….they were all over London.