[Gerben42]

Today the US senate didn't approve the "rescue plan" for the US car industry. On the other hand, Opel (German daughter of GM) may get its own rescue plan here, as long as it can be assured that no penny of German money ends up in Detroit.

Since Opel is only in trouble because of the money GM ows it (and is still selling cars, in fact one of their cars is "car of the year" around here), it appears to me that the American manufacturers are not selling their cars very well.

I don't know much about the American situation, but how many car types from the "big 3" drive at least 30 miles on a gallon? (7.9 litres / 100 km)

[mike777]

Gerben42, on Dec 12 2008, 05:22 AM, said:

Today the US senate didn't approve the "rescue plan" for the US car industry. On the other hand, Opel (German daughter of GM) may get its own rescue plan here, as long as it can be assured that no penny of German money ends up in Detroit.

Since Opel is only in trouble because of the money GM ows it (and is still selling cars, in fact one of their cars is "car of the year" around here), it appears to me that the American manufacturers are not selling their cars very well.

I don't know much about the American situation, but how many car types from the "big 3" drive at least 30 miles on a gallon? (7.9 litres / 100 km)

I agree this is very confusing
1) Americans own BMW
2) Americans own Opel
3) Americans own Merc......
4) many non germans own above
5) CAFE is very confusing......but it seems we cannot import well built, sound, high milage cars from non usa.





Perhaps...best.....USA take over cars and tell everyone buy green cars or go to jail.

[kenberg]

Gerben42, on Dec 12 2008, 05:22 AM, said:

Today the US senate didn't approve the "rescue plan" for the US car industry. On the other hand, Opel (German daughter of GM) may get its own rescue plan here, as long as it can be assured that no penny of German money ends up in Detroit.

Since Opel is only in trouble because of the money GM ows it (and is still selling cars, in fact one of their cars is "car of the year" around here), it appears to me that the American manufacturers are not selling their cars very well.

I don't know much about the American situation, but how many car types from the "big 3" drive at least 30 miles on a gallon? (7.9 litres / 100 km)

While I don't know the exact answer, most certainly it is not large. But of course you don't, in theory at least, need a lot of models. If some models got 25 mpg and others got 35 mpg, and if everyone bought the 35 mpg model, then no problem. At least not with mileage.

I think of myself as an obvious and natural customer for Detroit. I started reading Hot Rod when I was about 13, I bought a Plymouth when I was 15, I loved working on cars (my initial car at $175 provided much opportunity to follow this interest) and so on. In fact I drive a Honda.

When I get more time (I am hoping no one notices my brief respite from work that needs doing) I will say a few words about how this could happen.

[helene_t]

35 mpg doesn't sound a lot. My mum got a new car back in 1978, an Autobianci A112. It went 16 km/l, that would be some 41 mpg I think. It was good for those days but not exceptional, similar Japanese cars would go about 20 km/l. OK this was based on a steady 90 km/t, would be a little less in mixed driving. Anyway, hasn't the technology improved over the last 30 years? VW made a diesel Golf version that could go 50 km/l (some 145 mpg I think) some 25 years ago. Again, those 50 km/l where probably also by steady 90 km/t or such.

[Gerben42]

Quote

I think of myself as an obvious and natural customer for Detroit. I started reading Hot Rod when I was about 13, I bought a Plymouth when I was 15, I loved working on cars (my initial car at $175 provided much opportunity to follow this interest) and so on. In fact I drive a Honda.

When I get more time (I am hoping no one notices my brief respite from work that needs doing) I will say a few words about how this could happen.

How what could happen? I can understand driving an East-Asian car, I do that too.

Now I'm interested what a 13-year old is doing with a car... I know that in the USA, kids can drive a car with 16 rather than 18 in Europe. But 13?

[kenberg]

Gerben42, on Dec 12 2008, 09:59 AM, said:

Quote

I think of myself as an obvious and natural customer for Detroit. I started reading Hot Rod when I was about 13, I bought a Plymouth when I was 15, I loved working on cars (my initial car at $175 provided much opportunity to follow this interest) and so on. In fact I drive a Honda.

When I get more time (I am hoping no one notices my brief respite from work that needs doing) I will say a few words about how this could happen.

How what could happen? I can understand driving an East-Asian car, I do that too.

Now I'm interested what a 13-year old is doing with a car... I know that in the USA, kids can drive a car with 16 rather than 18 in Europe. But 13?

Reading at 13, driving at 15. This was in 1954. Things have changed.

Jan 1, I turned 15.
Jan 2, I got my learner's permit.
March something, I got my license
April something, I show up with $175 at a used car dealer and drive out with a car. No parental involvement necessary. Actually my parents approved. They had recently bought a new car and explained that since most kids have to crack up at least one car before learning to drive right I should plan on buying my own rather than cracking up their new one. Despite some fairly substantial effort I never actually cracked it up, although I did eventually throw a rod. Milling the head to increase compression can do that.
Enough with my youthful enthusiasms.
Hondas are boring. Boring is good. They just keep running.

[Winstonm]

Ford and GM should be considered truckmakers rather than automakers. These two basically abandoned competing heavily in the car market and instead concentrated on the more profitable truck/SUV market - well, profitable at the time.

Gasoline mileage is not a big issue in trucks and SUVs.

[RichMor]

Winstonm, on Dec 12 2008, 11:31 AM, said:

Ford and GM should be considered truckmakers rather than automakers.  These two basically abandoned competing heavily in the car market and instead concentrated on the more profitable truck/SUV market - well, profitable at the time.

Gasoline mileage is not a big issue in trucks and SUVs.

True.

I have seen some ads that say GM (or maybe Ford, don't remember) sells several models that get around 30 miles per gallon.

But almost all the ads I see on television from the 'Big 3' are for trucks or Cadillacs.

[cherdano]

It's difficult to compete in the market for small and fuel-efficient cars when you are paying substantially higher wages than the rest of the industry.
If I understand the UAW's position in the negotiations yesterday right, then I find it hard to understand. (No paycut at all for current workers, only for newly hired workers.)

[awm]

How "many models" does Toyota make that get over 30 miles to the gallon? My bet would be not that many, but perhaps it doesn't matter with the Prius flying off the lots?

Apparently even the Prius does not make a whole lot of money. The big trucks are simply more profitable percentage-wise, and even the Japanese auto companies make a lot of their money off trucks and luxury cars.

In fact all the major carmakers have small, fuel-efficient models (although only Honda and Toyota have small hybrid ones). It's just that some of these cars are better than others. But even so, it's not like the Honda Civic is making huge amounts of money.

A small part of the issue is that most people's first car is a small car. If this first car is a bad experience, then the more expensive vehicles which most of us purchase later in life will probably come from a different company. If the first car is a great car, we are more likely to buy a more expensive car later from the same company. So having low-quality small cars is probably cutting into GM's long term sales.

But the bigger problems have more to do with:

(1) Sales are down in general because the economy is lousy.
(2) The strong unionization of auto workers at GM, Ford, etc. makes it difficult to lay people off or cut salaries (the "usual solutions" to declining sales). And even if GM were to lay off a lot of workers, this would have negative ripple-effects for the already-reeling US economy.

[RichMor]

Adam,

1) Does it really matter how "many (fuel efficient) models" a manufacturer offers ? One is enough if the manufacturer sells a lot of them. If the customers want some variety then design a common platform(engine, transmission) and slap on various body styles.

2) As to the profit margin on various types of vehicles, can't a manufacturer set a fixed profit expectation on all models ? Cost plus $2,000 or whatever.

3) As to the quality of a small car, it's whatever the manufacturer wants it to be. My first Honda Civic was a 1973 model. It was not exceptionally high or low quality. It had no luxury features but it started, ran, and didn't break down. It cost $2,400.

My current car is a Suburu coupe. It is an upscale model with more features than the old Honda. But the basics are the same; it starts, runs, and doesn't break down. It cost about $20,000 in 2000.

Make any sense ?

RichM

[mikeh]

The problem is multi-factorial (stating the obvious is one of my strong points )

The big 3 focussed heavily on trucks, and ever-bigger suv's because the profit margins were so high on these vehicles.

The lead-time and investment required to retool to produce smaller, more fuel efficient vehicles is enormous, and it appears that none of them made the critical commitments early enough to be able to come to market with such vehicles in sufficient numbers

They also have 'lost' a substantial part of the younger generation of car owners.

Young males, in particular, like cars with lots of performance. The big 3 traditionally addressed this market by making cars with huge engines... while their subsidiaries and competitors focussed on making cars with smaller engines, that worked more efficiently, Detroit remained wedded to the cubic inch as the solution... need more power.. make the engine bigger.

In addition, perhaps because US road racing is largely a NASCAR or drag racing phenonomen, in which cars race around oval tracks, while the rest of the world is more Formula 1, performance in the US has mostly been about how fast you can go in a straight line, while in the rest of the world, handling has been at least as important as power/torque.

The result: for the past 30+ years, the big 3's entry level cars have largely been *****-boxes... the K car, the Chevette, the Pinto and so on. The 'performance cars' guzzled gasoline, were expensive to insure, and usually didn''t handle especially well, particularly in adverse weather.

In the meantime, VW brought us the Rabbit, which morphed into the Golf, and Datsun brought us the 510, and so on.

So while the big 3 kept hold of some enthusiasts through the Mustang, and (for some of the time) the Camaro/Firebird, those who appreciated handling and poor-weather driveability over straight-line acceleration learned to buy foreign.

And we learned that Toyotas and Hondas and Nissans rarely broke down.

So the younger generation, especially those who liked cars rather than seeing cars as basic necessities, learned to buy imports. And we develop brand loyalties early on...and brand aversions.

Thus, even if the big 3 can somehow come to market, in the next couple of years, with well-made, superior-handling, economical but well-equipped vehicles, they will still have to try to overcome a problem of perception.

Take a look at Cadillac as an example. I haven't driven a Cadillac for many years.. I once briefly drove a 1972 Eldorado convertible. Apparently, the CTS is an excellent vehicle, that handles well, and comes with lots of options, and various powerplants. But I have seen almost none on the road while I see a LOT of Lexuses and Mercedes and BMWs. The Cadillac may be equal to these cars, but no-one is buying them, because, I suspect, most potential buyers are turned off by the image that Cadillac developed over the past 30 years.

While at the other and larger end of the market, the big 3 have virtually no history of producing comfortable, reliable, economic cars that have any 'fun' to them. A partner of mine just bought a Civic.. and it is one heck of a nice car.. meanwhile, what does Chrysler have to offer? What, for that matter, do Ford and GM have? Gm is making an effort with the Malibu.. but it takes more than one model, particularly a model whose former iterations have been woeful, to compete.. the same is true of the Ford Fusion.

[matmat]

in some sense it is a cultural thing, isn't it? america is sort of the land of excess, bigger cars, bigger houses, bigger restaurant portions... supersize my fries, supersize my engine, etc.

seems that instead of setting fuel efficiency and reliability trends the big 3 just catered to the general whim of the public, which is understandable, but lethal.

[gwnn]

how is BMW and Mercedes owned by Americans mike777?

[cherdano]

RichMor, on Dec 12 2008, 01:54 PM, said:

2) As to the profit margin on various types of vehicles, can't a manufacturer set a fixed profit expectation on all models ? Cost plus $2,000 or whatever.

No.

[matmat]

gwnn, on Dec 12 2008, 04:15 PM, said:

how is BMW and Mercedes owned by Americans mike777?

same way that your soul is owned by the Lego company

[mikeh]

matmat, on Dec 12 2008, 03:44 PM, said:

in some sense it is a cultural thing, isn't it? america is sort of the land of excess, bigger cars, bigger houses, bigger restaurant portions... supersize my fries, supersize my engine, etc.

seems that instead of setting fuel efficiency and reliability trends the big 3 just catered to the general whim of the public, which is understandable, but lethal.

That raises an interesting question, as to how the public's whims arise. Invention is the mother of many necessities, as one Canadian wrote. Advertising arguably biases market demand, if it does not create it out of whole cloth.. witness the incredible ads from the pharmaceutical industry, aimed at generating demand by patients for drugs physicians might otherwise not think of prescribing for such debilitating conditions as social anxiety or restless leg syndrome.

So, too, the car industry spent decades (at least in NA) touting new models as longer, wider, bigger, more powerful than the previous models, to the point that there are now a number of street vehicles that deliver 500 hp or more, and trucks with 390 or 400 or more... why? The car ads never make a virtue out of low power.. they will, in some market segments, promote fuel efficiency, but even then they usually tout performance AND fuel economy.

[mike777]

gwnn, on Dec 12 2008, 04:15 PM, said:

how is BMW and Mercedes owned by Americans mike777?

Anyone can buy their stock, even Americans. Just like GM and F are owned by non USA citizens and have numerous non USA creditors. In fact GM and F have numerous plants around the world and employees and managers who are non USA citizens. I hope those countries bail out GM and F. I do have concerns that these owners and creditors, many non USA citizens do not have to write off/down their equity and creditor positions.

btw I think back around 1908 the Ford Model T got 25 miles to the gallon, so Ford knows how to make high mileage cars.

Car Mileage: 1908 Ford Model T - 25 MPG
2004 EPA Average All Cars - 21 MPG


http://www.wanttokno...leageaveragempg

btw2 is there any stated plan for these companies to make a profit? If not perhaps just give the money directly to the UAW?


btw3 I would think if one goal is to make a profit, Detroit can simply move their plants to Canada, have Canada pick up the health care plan and transport the cars a few miles back to the USA. OTOH if Japan and Germany can build profitable cars in the USA with USA workers maybe Detroit with new owners after going bankrupt can also?

[Gerben42]

Quote

how is BMW and Mercedes owned by Americans mike777?

FYI, of the big 4 in Germany (Opel, Daimler, BMW and VW), only Opel is owned by an American company. VW is largely owned by Porsche, which is German again. Daimler and BMW are owned by lots of people, no doubt including Americans, but nowadays my guess would be more UAEians.

Can someone tell me why people thought they really needed these big trucks? I mean, they don't fit in parking spaces, don't get around small corners and are just unhandy. Now if I would live in mountainous areas with few solid roads, an SUV would be the right thing. But in London or Los Angeles they are just out of place!

[mike777]

Gerben42, on Dec 12 2008, 06:07 PM, said:

Quote

how is BMW and Mercedes owned by Americans mike777?

FYI, of the big 4 in Germany (Opel, Daimler, BMW and VW), only Opel is owned by an American company. VW is largely owned by Porsche, which is German again. Daimler and BMW are owned by lots of people, no doubt including Americans, but nowadays my guess would be more UAEians.

Can someone tell me why people thought they really needed these big trucks? I mean, they don't fit in parking spaces, don't get around small corners and are just unhandy. Now if I would live in mountainous areas with few solid roads, an SUV would be the right thing. But in London or Los Angeles they are just out of place!

Many SUV's are built on a truck chassis not a car.