Bring It On!

Party’s Over

May 2nd, 2008 | by Jet Netwal |

I had to laugh today as I read Ken’s great post about mewling Congress critters having to give up their gas guzzlers. Once again, the average Joe/Jane is leading the trend, and the fat, self preservation cats, who are supposedly guiding us, are somewhere out in left right field… or possibly the parking lot.

In what industry analysts are calling a first, about one in five vehicles sold in the United States was a compact or subcompact car during April, based on monthly sales data released Thursday. Almost a decade ago, when sport utility vehicles were at their peak of popularity, only one in every eight vehicles sold was a small car. – NYT

37% is a real shift. Most businesses  experiencing this either respond or fail. We all know where Detroit put their eggs, and it wasn’t on prototypes like the Yaris. That’s too bad, when you consider this:

In another first, fuel-sipping four-cylinder engines surpassed six-cylinder models in popularity in April.  - NYT

We are fleeing for the exits, kids. Lucky Japan. No, that’s not exactly correct, is it? More like, way to read a market, analyze economic trends, accurately forecast need and build to suit. Luck is what Detroit hoped for, in the form of US Government intervention. Give me a break. I was around in the 70’s, and it’s not like the big three didn’t have the opportunity and impetus to take control of their destiny.

What a sad end to an industry so intrinsically linked to Americana, and our idealistic self perception.

If I’ve learned anything in the past 10 or so years, it’s that there are few motivators stronger than idealism, and a world of subterfuge designed to use idealism for gain. Religion, Politics, Markets, or even simple expectations of decency, there’s always an exploitation angle and a scumbag with a scheme.

Perhaps the Big Three bought into their own brand of idealistic manipulation. Americans will never drive little cars (well, REAL Americans anyway). Americans will buy American no matter how crappy the car. Americans will only love Fords or Chevys, will identify with their brand, and never EVER switch. As a marketing ploy, establishing brand loyalty is a great goal. Buying into your own marketing to the point that you cease being competitive and responsive is the kiss of market share death.

Maybe I’m all wet here. Perhaps Detroit’s Big Three are staffed to the gills with analysts who consistently predicted the economic indicators that would impact their industry and developers who dreamed up products to meet that changing demand. Perhaps, sometime between 1973 and 2008, there were exciting ideas on the drawing boards that would have revolutionized the American automotive industry.

Too bad they relied on the lobbyist route. These days, they’re stuck running ads saying Fords are NOW as good as Toyotas. Yikes.

As for the rest of us, downsizing our cars in order to keep trucking is a decision made largely for us.  Our kids still have soccer, we still have work and errands, and we live in a country where you can’t walk to what you need.  Beyond that, downsizing a car payment as well as a car helps our household bottom lines, and in a world where every commodity feels the sting of rising fuel costs, an extra hundred or two a month is a good thing. I sure wouldn’t want to sell used cars though. SUV’s on the lot for miles, and 8 buyers around the Fit.

Once considered an unattractive and cheap alternative to large cars and S.U.V.’s, compacts have become the new star of the showroom at a time when overall industry sales are falling.

Sales of Toyota’s subcompact Yaris increased 46 percent, and Honda’s tiny Fit had a record month. Ford’s compact Focus model jumped 32 percent in April from a year earlier. All those models are rated at more than 30 miles per gallon for highway driving. - NYT

Brand loyalty is a victim of the war on idealism. Its value in marketing is gone, evaporated like so much gas on a hot day. More and more of us can’t afford the dream and we are realistic enough to accept that. Our bottom line is personal survival, and as we look into the recession abyss, somehow just because we drove a Chevy for 20 years doesn’t play like it used to.

Dave Strom of South Boston, Va., recently bought a tiny Smart ForTwo Passion Coupe, made by Daimler, the German automaker.

Mr. Strom also owns a pickup truck, which he uses mainly to haul his boat. When he runs errands, he drives his Smart, which he says is getting 45 miles a gallon.

“I had to smile the other day when I filled my tank for $18 and the guy next to me had a Ford Explorer and the pump was clicking past $80,” said Mr. Strom, a 66-year-old retired manager of a Chevrolet dealership. — NYT

Cutting your pump costs 77%? Priceless.

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  1. 13 Responses to “Party’s Over”

  2. By Dusty on May 2, 2008 | Reply

    To fill a Ford Explorer in CA its over 120 bucks now.

    They keep raising the price of oil and we use less..how does that work again?

    They tell us to conserve and yet when we do, the price keeps going up. Its a nowin situation.

  3. By Jet Netwal on May 2, 2008 | Reply

    I wonder how trade in values on SUVs are affected? It’d be an interesting thing to research. My husband and i actually discussed buying a motorcyle last night. I mentioned that in passing yesterday, but we ended up having a long conversation about it.

  4. By rube cretin on May 2, 2008 | Reply

    Dusty,
    “Its a no win situation.” Peak oil is a no win situation for humans. On the Oil Drum yesterday. “What’s to be scared of? We’re all going to die, with or without PO, the collapse of ice sheets, or anything else. I find it fascinating & exciting to be living during times of human demographic transition and mass extinction. Biodiversity will recover following human extinction. Take the long view & be happy.” :) Darwinsdog

  5. By Dusty on May 2, 2008 | Reply

    The govt can repeal the corp welfare given to the Oil companies and put money back in the Federal coffers, but that doesn’t give the individuals filling their gas tanks any reprieve. Our capitalist system allows the Oil companies to charge us whatever they want. Price controls would give us a break, but god forbid they won’t do that.

  6. By Dusty on May 2, 2008 | Reply

    Thats a cute lil car Jet. I wouldn’t mind driving it. I want a hybrid or an electric car. The price is prohibitive however for us on the lower end of the economic scale. ;)

  7. By Jet Netwal on May 2, 2008 | Reply

    In September, there will be used ones two-years old, and priced pretty decently, Dusty. I agree, they’re groovy looking.

  8. By Dusty on May 2, 2008 | Reply

    My yuppie sista recently bought a Mercedes and parked the huge SUV. They want to sell it but won’t take a bath they say…besides they do occasionally go on ‘family trips’. They aren’t getting any takers at this point ;)

    I was a lover of big powerful engines..I can not deny that. But I ain’t stupid, and I own a roomy six banger..but I would dump it in a heartbeat for a tiny car with fantastic mpg. We have talked about it, and if the situation presents itself we will go smaller and save money, sacrificing space and speed.

  9. By Paul Watson on May 3, 2008 | Reply

    Time to shock the Colonials again, but, I got rid of my car completely last month. Ok, I admit it, it wasn’t my choice. It failed it’s annual inspection and is now illegal to actually drive.

    On the rare occasions I need to drive somewhere, I rent a small car for a couple of days. Of course, I live in London and so have adequate public transport (not as good as a car, but good enough and as I need to use it to get into work, I’ve already paid for my tickets).

    Oh, and we’re at the £5 ($10) gallon over here, more or less. You gots nothing to complain about yet. ;-)

  10. By Dusty on May 3, 2008 | Reply

    Damn.

    If and when it gets that high here in Amerika,I will have to do something drastic.

  11. By Jet Netwal on May 3, 2008 | Reply

    Yes and no, Paul. Our country is guilty of poor public transportation systems. I envy you your trains.

    That said, since the majority of us work a long way from where we live, shop and recreate, the average person must drive, and fair distances, to conduct what passes for normal. We pay less, but we have to use more.

    Perhaps we’ll just head your way and chuck our cars too. Say, Monday next? :-D

  12. By Paul Watson on May 3, 2008 | Reply

    Jet,
    If you had to use them, you’d lose a lot of that envy. But next Monday should be fine.

  13. By steve on May 3, 2008 | Reply

    I almost bought a Yaris when if first came out. (Yeah this is Steve, the Hummer-now Porsche Cayenne, that gets 16 miles to the gallon on Super unleaded guy at $4.16 a gallon, guy). My company had a gas allowance for their vehicle they gave us. So I figured at 2500 miles a month with the gas at $2.80 at the time, I could buy the car, the insurance and the fuel use the entire allowance and not come out of pocket. I was coming out of pocket already with the allowance. Pretty amazing if you think about it.

    I think the could sell Americans more hybrids and stuff, if they just looked better. I know many people that would buy a Prius for their next car if they didn’t look like an abortion on wheels. I am in the car business, sort of, I sat in one. Roomy and comfortable as hell, just not me. Porsche is turning the Cayenne into a Hybrid in 2009-2010… 30 mpg, with 350hp. Now that is fucking car I want!!

  14. By Jersey McJones on May 3, 2008 | Reply

    Steve, I owe you an official and sincere apology. I shouldn’t have passed judgement on your automobiles. Hell, I drive a Ford and a Buick. I do it because it just so happens to be cost effective for me at this time. I don’t carry auto debt. I spend very little on relatively quality transportation. I play the auto market for bargains.

    It was wrong of me to place my own considerations and circumstance on yours. You have your own good reasons for driving what you drive. I should not have passed judgement on that. Again, I apologize.

    Peace, JMJ

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