Auto Sales: Worse and Worser
By Barry Ritholtz - June 2nd, 2009, 4:50PM
Auto sales fell significantly last month — no surprise there. But there was a surprise in who took the biggest hit: the Japanese automakers:
Toyota plunged 41%
Honda 42%
Nissan lost 33%
BMW fell 27.7%
Volkswagen fell 12.4%
Mercedes-Benz sales were down 33%
Porsche Sales Down 29%
Hyundai lost 15%
General Motors fell 30%
Ford Motor 24%
Chrysler dropped 47%
The industry’s seasonally adjusted sales rate tumbled to 9.2 million in May. While these numbers are pretty bad, the US companies fared better than expected . . .
See also:
GM strikes deal to sell Hummer to Chinese manufacturer
http://www.marketwatch.com/story/general-motors-strikes-deal-to-sell-hummer
June 2nd, 2009 at 4:55 pm
Why is it a surprise? Lets think about this like the consumer would:
Consumer knows that US automakers are in big trouble, they might not know anything else but most people know this.
Consumer has very little extra money to spend but they need a new/used auto
Consumer thinks because the US comps are in the dumps they will get a better deal, who cares about service, I know a mechanic he/she can fix it if something goes wrong.
Just look at the numbers above, the cheapest of them all still held up the best.
June 2nd, 2009 at 5:00 pm
I have to say, that one jumped off the page at me today. Are the U.S. autos lying (again, I don my tin foil hat) to keep the “better than expected” train moving? If not, then why did Toyota fare worse this past month when they clearly have a superior product overall? Are the U.S. autos offering that big of an incentive to buy their cars over Toyota and other foreign cars?
June 2nd, 2009 at 5:03 pm
Will the closing of dealerships have any appreciable effect on sales? At first blush, you’d say no..
June 2nd, 2009 at 5:14 pm
F has product and positive public image on its side, GM has some good product and doesn’t appear to be in imminent danger of death… and there’s probably some patriotism at work here, too.
Chrysler’s corporate history and self-image is all about reinvention after near-death experiences, but this looks like a for-sure death spiral. I don’t think there’s going to be a whole lot left of them in 6 months.
June 2nd, 2009 at 5:15 pm
@Manny
FYI, I’m in the South, where cheaper, higher-quality foreign cars made huge inroads in the Seventies. We bought a 2005 Toyota Sienna. Love the styling and features, but have had many nagging quality problems. I haven’t driven a domestic vehicle since my 1977 Ford 150 in high school, but I’m not convinced that the domestic car makers haven’t closed the quality gap. At least, it seems to me, Toyota has left the door open. OTOH, I’ve driven a 1994 Acura Integra for the last 15 years!
June 2nd, 2009 at 5:16 pm
No shoots? Not green? I am shocked…
June 2nd, 2009 at 5:17 pm
IMO, sales are leveling off at around 9 mil. Question is: how much of that market will American Car Companies (?, what) get. Is GM really going to restructure (why is all top management still occupying there chair?)
Bruces question is good: I’ve always wondered why in the hell would they want to chase off dealers, that’s there customers. They don’t sell to the public. Idiots?
June 2nd, 2009 at 5:24 pm
@Cursive: Good points but my wife and I have a Subaru Outback (‘05) and Toyota Corolla (‘01, with no frills at all) and almost NEVER have any problems with either car other than regular maintenance. Unlike some of our friends who have to have the latest Lexus or Mercedes SUV (for absurd monthly lease payments), we don’t need the latest and greatest shiny toy to show off to our friends. I wonder how many others feel the same these days and are either trading down or just (gasp) driving older cars and finding that works fine for them?
June 2nd, 2009 at 5:24 pm
U.S. and Korean auto makes are offering special deals (return your car if you lose job within 12 months). The Japanese auto makes are not playing the incentive game. Obviously, they need to take classes on “How to destroy your brand by constantly discounting your product.” I hear that Rick Wagner may be available to teach the course.
June 2nd, 2009 at 5:26 pm
@Rajesh: LOL. That is too funny (and sadly true).
June 2nd, 2009 at 5:28 pm
CR reporting that car sales on pace to be worst since 1967. Is that really a “green shoot?” C’mon folks, let’s get real. Worst year in 42 years and that’s “better than expected?” Talk about delusional.
June 2nd, 2009 at 5:29 pm
The Domestics are working off easier yoy comparisons. Last May Ford was off 19% GM 30%, and toyota was only off 8%.
June 2nd, 2009 at 5:30 pm
Now that GM is the government, maybe they will add a birth/death model for sales that would have occurred in a better economy.
June 2nd, 2009 at 5:31 pm
They also need a hedonic adjustment for better cars.
June 2nd, 2009 at 5:51 pm
Will the closing of dealerships have any appreciable effect on sales? At first blush, you’d say no..
Wouldn’t it increase sales?
I thought condemned dealerships had a short period of time to sell off all their inventory and shut down.
June 2nd, 2009 at 5:53 pm
Ritholtz, I am thinking of selling CNBC Sucks to the Sichuan Tengzhong Heavy Industrial Machinery Company of China. I heard the Chinese have an appetite for useless American assets.
The Japanese are paying for their own excellence. People who buy Japanese cars tend to be brand loyal, so if the car you own isn’t falling apart, why buy a new model of the same brand? It’s not like Chevrolet or Pontiac where if you drive one for three years, you better get another one quick or else you risk getting stranded on the Interstate.
June 2nd, 2009 at 5:58 pm
I was pointing out to my wife the other night that all of the adult women on her side of the family have bought new vehicles this year. She bought a Sonata. Her sister bought an Impala. And her niece bought a Civic. She looked at me, smiled and said, “Well we’re doing our bit to keep the economy going”.
Apparently its not enough.
June 2nd, 2009 at 6:02 pm
Toyota will not give much on price here in Oklahoma. They can play around with trade in value, but they want to show high retail sales price. We began switching from Toyota to Mazda a couple of years ago, and now I only have my old ‘05 Matrix left, but we now have two Tributes and a CX-7. Mazda would negotiate, but the Toyota dealers would not.
Toyota and Honda may also be competing with their own used vehicles. While hard numbers are not available, anecdotal observations indicate a lot of buyers are purchasing used Japanese cars that are two or three model years back. The reliability is excellent and the wear and tear is minimal.
Just my observation.
June 2nd, 2009 at 6:08 pm
this whole idea that America wants fuel efficient cars is a joke- they want cheap gas sure- but small impratical cars- no-
-there will always be a market for Suburbans and Tahoes and Explorers- sure gas mileage sucks-but when your packing in the 3 kids and all your gear- sure comes in handy- or – you want to move a dresser to your sister’s house- same thing- or you are taking the girls scout troop camping- well sure saves gas then using muliple cars-
I have a an old beat up 4Runner- gas mileage is atrocious- but man- it sure do come in handy- and is a blast to run along the beach in the Outer Banks- and takes all my surf boards, boogie boards, surf rods, and bikes- and when I go snowboarding- even better- because I can go into 4 wheel drive on a snowed over road on the way up the mountain-
use to have a Cherokee, a Wrangler, a CJ5, Ford F250- not a small car to speak of- because they are not practical- to me- and what I use a vehicle for-
so keep dreaming if you think GM is going to make it as a small car company- never happen
June 2nd, 2009 at 6:28 pm
Doesn’t the rate of change slowdown by simply approaching Zero?
June 2nd, 2009 at 6:34 pm
ahab, I have learned that Obama’s Presidency was never to remake GM into a successful small car company, or to maintain America’s status as the world’s lone superpower. His job is a soft landing for America and Americans to the reality of the world faced by the rest of humanity, the reality where you need to be talented, hardworking, and respectful just to put food on the table. Obama’s mission is the kind of soft landing where we aren’t bashing in each other’s heads on the streets, where we don’t lapse into a fascist state, where we aren’t launching nuclear missiles at other countries for insulting our pride. For such a soft landing, the Chinese are only too happy for us to print money. As for GM, Obama’s job is to make sure the jobs in Detroit don’t disappear instantaneously, buy a little more time for people to adjust, and maybe restore GM to a decent company that is not the butt of jokes.
And oh, Americans do want fuel-efficient cars. Americans buying “small impractical cars” is the primary reason GM and the other “Big Three” car companies have been steadily losing US market share over the last 40 years.
June 2nd, 2009 at 6:40 pm
The only growing segment of the market will be the Previously Owned segment.
June 2nd, 2009 at 6:42 pm
Headline in SF Chronicle per AP:
“GM says it has 16 potential buyers for Saturn”
Chronicle commentor (ccr) says:
“LOL. I think Government Motors is going to have sell a hellovalot more than 16 Saturns to break even…”
June 2nd, 2009 at 6:46 pm
I had CNBC muted on this afternoon and saw a green shoot headline saying that Chrysler had beaten expectations because it’s sales only dropped 44.8% while expectations were 45.something like it was good news. The numbers were slightly different than those listed above.
BTW, I agree about the difficulty of dealing with Toyota dealers. Here in Houston 18 mos ago, I couldn’t get anyone to deal, so I bought from a dealership in MD. They have pretty decent no haggle prices and will ship vehicles or pick you up at the airport if you want to fly in. I recommend them highly. The website is http://www.fitzmall.com
Ask for Brian Chanin.
June 2nd, 2009 at 6:48 pm
Steve Barry Says:
June 2nd, 2009 at 5:30 pm
Now that GM is the government, maybe they will add a birth/death model for sales that would have occurred in a better economy.
Andy T Says:
June 2nd, 2009 at 6:28 pm
Doesn’t the rate of change slowdown by simply approaching Zero?
________
Good Humor abounds today. tw
CNBC Says:
June 2nd, 2009 at 6:34 pm
ahab, I have learned that Obama’s Presidency was never to remake GM into a successful small car company, or to maintain America’s status as the world’s lone superpower. His job is a soft landing for America and ***** Americans to the reality of the world faced by the rest of humanity, the reality where you need to be talented, hardworking, and respectful just to put food on the table. ******* Obama’s mission is the kind of soft landing where we aren’t bashing in each other’s heads on the streets, where we don’t lapse into a fascist state, where we aren’t launching nuclear missiles at other countries for insulting our pride. ****** For such a soft landing, the Chinese are only too happy for us to print money. As for GM, Obama’s job is to make sure the jobs in Detroit don’t disappear instantaneously, buy a little more time for people to adjust, and maybe restore GM to a decent company that is not the butt of jokes.
_______
that is wisdom for today – (not debating or defending the Presidents part, but applauding the rest of the thought.) US gets a lower % of the worlds resources. tw
June 2nd, 2009 at 6:51 pm
just on first look, i would think reason for the foreign sales being lower as a rule is that they tend to be in big cities, while a lot of domestics are not. and its not like the foreign companies aren’t offering incentives they are. and its not like T and N don’t have trucks and only sell small cars, they do. in fact they have more trucks than cars. and they don’t get appreciably better gas mileage than the equivalent domestics. or it could be the foreign companies stopped shipping except that if you look at the ports you see a sea of foreign cars, and more coming and needing to be stored. but the foreign models do tend to be more expensive than the equivalent domestics. so maybe thats it.
and i am not sure why GM and C got rid of some dealers. you would think they would want to keep most of their small market dealers, and only get rid of dealers in areas that are collapsing economically (say Michigan) and where there are more dealers than needed, eliminate the ones doing the worst job. but there is a lot of questions about how dealers were picked, C looked to be trying to reduce single brand stores (to be combined with multiple brand stores), and some think they were trying to get rid of some dealers they didn’t like. and GM already has some cooked in dealer reductions (think Saturn and stand alone Hummer and Pontiac stores). but as to why they wanted to reduce the dealers? well, a lot of it has to do with the number of dealers in areas. the more of them in say a city, the more they compete with them selves and reduce the selling price (which makes the makers job even harder as they have keep prices low to keep sales going). the end result of their dealer pruning will be a smaller distribution network, and higher prices do to less competition. but the smaller network won’t last long if car sales ever bounce back
and i don’t know if we ever will really buy into premium priced domestic small cars unless they have premium content. thats really BMW, Mercedes and Audi offer.
i saw a story where Porshe got them selves into big trouble (think bankruptcy) by ending up on the wrong side of their push to buy VW.
June 2nd, 2009 at 7:02 pm
my gm story:
i short the stock around 48 when i heard about new hummer h3, it goes up to 54. I am nervous.
I think the management is a bunch of idiots. I don’t cover my short, several days later, it goes down to
46. I am scared, i cover it. then I did not touch gm. now it is bankrupt. he he he.
June 2nd, 2009 at 7:02 pm
Steve Barry Says-
“And oh, Americans do want fuel-efficient cars. ”
only if the vehicle that is fuel efficient can do all the things I said above- a little shit box won’t work for for most folks no matter how fuel efficient
“For such a soft landing, the Chinese are only too happy for us to print money.”
gee- thanks China- you’re the best- appreciate your understanding- also- thanks for keeping your currency artificially low- sure has helped the good ol’ USA – because it makes it cheaper for us to shop at Walmart
Oh yeah- thanks Obama- for engineering this soft landing- you are wise beyond your years- I only wish I had voted for you twice- you’re that good
June 2nd, 2009 at 7:02 pm
Worth a Read:
http://www.advisorperspectives.com/newsletters09/Jeremy_Granthams_Warnings_to_Investors.php
June 2nd, 2009 at 7:03 pm
sorry- post above was directed @ CNBC Sucks-
Steve Barry- peace brother
June 2nd, 2009 at 7:05 pm
A few things at work here.#1 Dealers who are being closed or suspect they will be closed will be aggressive in selling because they know the auctions are the next step. #2 US just put $7B into GMAC and promised another $7B when nobody else would give them a penny.I’m sure their mission is to provide whatever financing deals are required to clear the GM & Chrysler lots. GMAC is one of the TBTF banks even though it’s not really a bank. Just think of them as a Fannie/Freddie type creation to move Detroit iron, their have been given a mission!
June 2nd, 2009 at 7:08 pm
Maybe so JC, but it could also part of the problem that GM had was that GMAC had been AWOL for some time. and a funny phenomenon has been noted (for years) that as GM’s sales goes, the entire market goes (if they go up the market does too). last really big example was 9/11. GM was instigator for 0% then. and the market took off, when it had been tanking really bad, with nothing happening
June 2nd, 2009 at 7:13 pm
and the down side of those dealers being closed, is will the really do the paper work, and pay off any loans you have. there have been examples of the former here, as a Kia stored died, and none of the paperwork of fees were paid to the state (to get title and tags, and taxes). causing no end of grief for the consumers.
June 2nd, 2009 at 7:41 pm
I’m sorry, but it’s just dawned on me….
Aren’t those STAGGERINGLY bad numbers in their own right? Let’s say it was a year ago…and someone gave you these declines in sales….what would you have said?
I know that we’ve come to expect awful news and anything that seems better than stunningly awful is portrayed as “better than expected” or “signs of a turnaround.” I guess the other question is, what happens if this is the “new normal” for auto sales? What happens if this 9-10mm is all the tapped out consumer needs or desires? What does that imply for manufacturing? For auto dealerships? For all those lousy/cheesy advertisements you see on TV?
June 2nd, 2009 at 7:43 pm
call me Ahab
You and people who think as you do are the problem. The world is running out of easy to find cheap oil. It is a precious resource and should not be wasted. At what price do you decide that your profligate ways are no longer sustainable. Think of you children and grandchildren.
June 2nd, 2009 at 7:47 pm
@ahab
You are right…and very wrong. If people didn’t want SUV’s, every manufacturer wouldn’t have built them (good grief, even Porsche has one). That is what people WANT. Your whole description of what you do with your vehicles is what people THINK they are going to use it for. The REALITY is most SUV’s never go off road, never carry more than 4 people (including the driver) and never carry anything bigger than a stroller and a backpack. Meanwhile, I raised 2 kids, including camping vacations, driving a Toyota Corolla. So MOST people can do everything in their daily lives in a smaller, fuel efficient vehicle.
Chrysler and GM are toast. Chrysler has always been a niche player, and that niche just keeps getting smaller. Fiat just wants the parts and dealer network and will eventually get rid of the manufacturing. GM offers very little except price. They never seem to aspire to be the best in any vehicle class, they just want to sell the most and make the most money on each one while expending minimal effort. It’s the classic of having your cake and eating it too. The best the govt could do is split up GM and sell off each part, but transfer any patents to Ford so at least some technology would stay in US hands.
June 2nd, 2009 at 8:03 pm
@Andy T,
You’re the first one I’ve seen making the obvious point about why all the “second derivative” talk was bunk.
I’m waiting for the headlines — “NO NEW UNEMPLOYMENT CLAIMS”, with “Nobody has a job any more” in small type……
Of course, that will be followed by “EMPLOYMENT SURGES” — because, you know, once one person gets a job you’re dividing by zero to calculate the percentage increase……..
June 2nd, 2009 at 8:07 pm
Guys guys guys – as an egotistical SUV-driving registered Republican, the intent of my seemingly progressive post was not to argue the merits of small, fuel-efficient cars versus SUVs. In fact, my intent was to draw some page views to my blog without actually making the effort to write any new posts. That aside, for clarity, let me further elucidate my points:
1. There is a huge market segment for small, fuel-efficient cars in the US.
2. GM does not currently have the “goods” to “succeed” against Toyota and others in this segment.
3. Obama’s mission is not to make GM the market leader in small, fuel-efficient cars, but to avoid a precipitous economic collapse in Michigan, Ohio, and other Rust Belt states he MUST win in 2012 because the former Confederate states are still fighting the Civil War.
4. The Chinese are willing to work with Obama, or they risk having Sarah Palin an arm’s length from that little red button under the President’s desk in the Oval Office, http://www.palinaspresident.us/
June 2nd, 2009 at 8:10 pm
Porsche-
alright- take your Corolla- 3 surf boards, 1 boogie board, 3 surf rods, 3 children, 4 bikes to the shore- my guess is you would all be killing each other if able to even actually load what I just described- or
take your Corolla up the mountains of W. Virginia in winter time with the weather doing its thing- with 3 kids- 4 snowboards, 4 pairs of snowboard boots, and all accompanying winter gear- and not fear for the safety of your family w/o the use of 4 wheel drive and space to put the gear-
I do this all the time- so- your Corolla is out- but hey- if it works for you- great
June 2nd, 2009 at 8:18 pm
Whammer-
that’s funny dude-
CNBC-
I get your point/s- however please see what awaits- from the folks who have a vision for GM- good to have good planners like Michael Moore-
http://www.michaelmoore.com/words/message/index.php?id=248
June 2nd, 2009 at 8:25 pm
[...] something about auto sales Jump to Comments They suck. Have consumers grown tired of buying cars finally? Toyota plunged 41% Honda 42% Nissan lost 33% BMW fell 27.7% Volkswagen fell 12.4% Mercedes-Benz [...]
June 2nd, 2009 at 9:11 pm
mudpuppy Says:
June 2nd, 2009 at 7:43 pm
call me Ahab
You and people who think as you do are the problem. The world is running out of easy to find cheap oil. It is a precious resource and should not be wasted. At what price do you decide that your profligate ways are no longer sustainable. Think of you children and grandchildren.
~~~~~~~~~~
mudpuppy…
I’m supposing that price is whenever people no longer feel like paying it….I would suggest that Ahab can do whatever the hell he wants with his own money if feels like it.
There’s only one way to curb hydrocarbon demand (if that’s the goal of the gov’t): TAX it.
If you want more of something, subsidize it. If you want less of something, TAX it. Period.
Everything else we do to manipulate less consumption of fuel is a complete waste of time and money and has DESTROYED certain Michigan-based businesses. I would submit that CAFE standards were a leading cause of the demise of GM, et al. If they had been allowed to make what they were good at making/selling: trucks, SUVs, big shit, we wouldn’t be bailing them out today. Instead, we FORCED them into competing in the small car arena, where they were obviously mismatched. This is of course what happens when Government interferes in in the marketplace. [To those that blame "the Unions," I would that management is more to blame. They GAVE THEM the concessions!!!]
The problem we have is a FAILURE of Leadership in Gov’t. The best and simplest solution to curb gasoline usage is to impose a hefty tax on it and then do progressive rebate for the poorer folks (who would be hit hardest.) Nobody in Washington D.C. has the guts to do it….
June 2nd, 2009 at 9:36 pm
Right on, AT. Can’t disagree with much of that, if anything at all. This country has a leadership vacuum everywhere we look these days.
June 2nd, 2009 at 10:07 pm
Instead of taxing gasoline, why not put a hefty tax on having children? Then there would be fewer kids to amuse to death in cushy Sloburbans with idiotic cartoons on private movie screens. Folks would probably keep bellyaching about future generations, but hopefully would abandon the rhetorical assumption that everyone has kids? Hey, and maybe some other species would have a fighting chance!
June 2nd, 2009 at 10:23 pm
bitplayer, mudpuppy-
seek counseling please- you are obviously depressed, childless, and lonely- life is meant to be lived- not sitting in your lonely apartments with your frozen dinners for one worrying about the planet- its going to make it with or with you- and
that my 9 year old 4Runner causes you both such grief- well- it’s a sad world we live in- because I would think people would celebrate children- unless of course- you are a self obsessed and cannot fathom the happiness they bring- now please-
go pet your fucking goldfish
June 2nd, 2009 at 10:52 pm
Here’s a speculative explanation for the bigger relative drop in higher-initial-priced Japanese imports: there’s a relative oversupply in *used* Japanese imports being unloaded by former overpaid FIRE economy workers. (These people were *not* driving Pontiacs.)
June 2nd, 2009 at 10:59 pm
call me ahab,
Whoa. Ease up.
>> unless of course- you are a self obsessed and cannot fathom the happiness they bring- now please-
Since people have kids because they bring happiness, who is it that’s “self-obsessed”? I don’t think “self-obsessed” is a fair term. But, if you forced me to use the term, I’d use it to describe the people having kids.
June 2nd, 2009 at 11:01 pm
call me ahab,
I also think bitplayer was trying to amuse…
June 2nd, 2009 at 11:10 pm
wunsacon-
sorry dude- I’m with you- I am only trying to enlighten folks that my 9 year old 4runner works for me- quite practical-
shouldn’t cause angst in folks-
and hey the kids- well they were always a surprise to me- never a one planned- by me anyway
June 2nd, 2009 at 11:27 pm
OK, I’ll pet my “fucking goldfish.” Why don’t you go hunt an endangered whale?
June 2nd, 2009 at 11:32 pm
@Andy T,
Sorry, gotta disagree with you on the CAFE standards this time. The “big shit” was exempted from the CAFE standards, because the SUVs and other stuff got classified as small trucks — lobbyists at work.
I would actually argue that the CAFE standards in the ’70s helped saved US automakers when the Japanese were beginning to kick their butts. Reasonable people could disagree with that, since in the short run it led to the Pinto, the Vega, the Chevette, pick your poison……….
That said, I generally agree with the concept of using a tax to achieve the goal of decreasing fossil fuel consumption — we did ourselves a tremendous disservice by not slapping a $0.50/gallon tax on gas in 1990 or so, with a ratchet of 10 cents a year for the next ten years.
June 3rd, 2009 at 6:01 am
[...] Autoabsatz USA — Jahresrate im Mai auf 9,9 Mio. Einheiten gestiegen (April: 9,31 Mio.): Die Zahlen liegen leicht über den Erwartungen und geben ein positives Signal hinsichtlich der Konsumentwicklung (Einzelhandelsumsätze kommen nächste Woche). Allerdings kann es sich hier lediglich um eine Stabilisierung nach dem heftigen Absturz in den Monaten zuvor handeln — die Jahresrate lag in den letzten 10 Jahren stets über 15 Mio. Einheiten (Übersicht Autoabsatz USA, WSJ). Die US-Marken haben sich dabei besser geschlagen als etwa die Konkurrenz aus Japan oder Deutschland (The Big Picture). [...]
June 3rd, 2009 at 8:09 am
Whammer-
to set the record straight- the CAFE standards are set on the complete product mix so that the entire fleet of cars offered by a manufacturer meets the minimum CAFE standard- as a whole
in other words, you had to have smaller cars in the mix to bring the average CAFE standard up to the minimum set by congress-
Andy’s point is a simple one- if there are no CAFE standards- then car manufacturers can concentrate on what they make best- it is up to the American people to make a decision as to what they buy- obviously if gas prices are expensive people will gravitate towards more fuel efficient cars
bitplayer-
dude- the planet will make it with or without us- we are not going to “save ” the world- it is indifferent to our survival as a species and will be here long after we’re gone- life is a one way ticket- enjoy it while you are here- learn to surf and snowboard- hike- backpack Europe or China- check out Yosemite or the Grand Tetons- go fly fishing in Yellowstone- don’t miss out- this is your one chance- enjoy it while you are here- and get a used car so you get where you need to go- I have a used 9 year old 4Runner- works pretty good
June 3rd, 2009 at 10:05 am
SUVs are an indirect result of lower fuel efficiency and emission standards imposed on vehicles with truck platforms, on the assumption that trucks were largely work vehicles. Automakers exploited this loophole to make passenger vehicles on truck platforms and marketing the SUV “lifestyle”, pushing SUV type vehicles from being niche vehicles into the mainstream. Bush and the Republican Congress added to this incentive to market gas guzzler SUVs early in this decade by granting quicker write-offs to SUV owners.
We value safety first, versatility (, passenger and gear capacity, and capability in all weather and rough roads) second, fuel economy third. I’ve owned two 4-cylinder 4runners that get around 20-22 mpg- a 1988 and a 2000 model I bought just last summer. The latter was built in the last year that Toyota offered a 4-cylinder 5 speed 4runner. Both vehicles are technically “SUVs” but they are far from a V-8 Escalade or V-10 Excursion. But what I really wish I could buy is a 4runner with a small diesel and run it on biodiesel. I’ve seen 4runners retrofitted with diesels that get 35 mpg and still have decent power. Unfortunately, Toyota perceives that Americans value power above all and keep cramming larger motors into the 4runner. They also, unfortunately, keep making their trucks bigger after inventing and dominating the small truck niche.
RE taxing children- I agree, but how about starting the tax at the 3rd kid? After all, a couple who has two children just replaces themselves, so no population growth would ensue if everyone did that…
June 3rd, 2009 at 1:01 pm
@ahab, I understand. What I’m saying is that the SUVs and the minivans are not counted in the calculation, they are considered “Light trucks”, not cars. So, by themselves, the higher mileage standards don’t force GM to build little cars to offset Hummers.
I was oversimplifying it, however, once I looked it up:
http://en.wikipedia.org/wiki/Corporate_Average_Fuel_Economy
It is when you read stuff like this that you say “screw it, just tax gas and get it over with”. However, that is certainly a less politically palatable approach.
June 4th, 2009 at 4:03 pm
[...] are experiencing. Yesterday, one of my coworkers walked into my office with a really interesting blog post on the current reported sales figures for new cars. (By the way- if you don’t read Barry [...]
June 5th, 2009 at 5:17 am
[...] US Auto Sales: Worse and Worser, The Big Picture, 3 Jun Look at the data in the link above and then look at this headline courtesy of the SMH: “US Car Sales Stabilise”. It contains such gems as: “Total US car sales were down 33.7 per cent at 925,824 vehicles compared with May 2008… but carmakers took comfort in the fact that the seasonally adjusted annualised rate of 9.91 million was the industry’s best performance this year.” Similar delusions led to the demise of the US car industry. [...]