The end of an era in the US Auto industry — until $7 gas arrives.
“Cars,” as the auto industry defines them, are going to die. Not necessarily the vehicles, though they’re disappearing too, but the category of “cars” because sales have plunged beyond hope, especially for vehicles by the Big Three US automakers, GM, Ford, and Fiat-Chrysler.
It came to a head today: Ford announced $25.5 billion in planned cost cuts by 2022 – some red meat it threw to its restive stockholders, whether or not these “cuts” will ever materialize. But the cuts included a big category that is a sign of the times: all current Ford car models, except the Mustang, will be killed off.
This includes, in order of size, the Fiesta, the Focus, the Fusion, and the once dead, then revived, and soon dead again Taurus.
After which Ford dealers will only have “trucks” on the lot and a few Mustangs.
Industry-wide, “car” sales have been a nightmare: During the first three months of the year, “truck” sales jumped 10%, and “car” sales plunged 11%. In 2017, truck sales rose 4.3%, and car sales plunged 11%. And so on. This divergence of dropping car sales and rising truck sales started in 2015, and since then, “car” sales have gotten relentlessly crushed:
Part of the problem is that the industry’s division between “cars” and “trucks” is peculiar. “Trucks” include pickups, vans, SUVs, and compact SUVs (crossovers). But some SUVs and all crossovers are based on a unibody car chassis (instead of body-on-frame, which is the case with trucks). They’re stubbier versions of station wagons. For consumers, the switch from cars to crossovers is natural.
And part of the problem is that consumers have fallen out of love with cars. Gas is cheap (though getting more expensive), SUVs and crossovers are cool and immensely popular. And in parts of the country, pickups have for decades been the most popular US-branded vehicle type, and that love affair has only increased in recent years.
Including SUVs and crossovers, “trucks” accounted for 66.4% of total sales in March, the highest ever for a March. “Truck” sales have been above 60% of total sales for 21 months in a row.
So today, Ford CEO Jim Hackett told investors the inevitable: there would be “a profound refocus.” Ford “will not invest in next generations of traditional Ford sedans for North America,” he said. And then the axe fell. The doomed car models will continue to sputter along in the near future, but without new investment, and then they will be phased out.
Only the Mustang will survive, and a “compact crossover” called Focus Active, will be added next year. It will be very extremely car-like (but for crying out loud, don’t call it “car”; that would kill it).
In terms of its Lincoln models, Ford was very economical with its announcement today and didn’t say a thing. But it already stopped making the Lincoln MKS (a fancy Taurus). The Lincoln Continental and MKZ sedans are unlikely to continue on their own since they share so many components with their Ford counterparts and are produced in only small volumes.
Ford is not a trailblazer.
Last July, GM entered into negotiations with the UAW about cutting six car models after the 2020 model year: the Chevrolet Volt (a hybrid, and not the Bolt, a true EV), the Buick LaCrosse, the Cadillac CT6, the Cadillac XTS, the Chevrolet Impala, and the Chevrolet Sonic. At the time, GM had already killed the Cadillac ELR, a dressed-up luxury 2-door version of the Volt.
Fiat Chrysler has already stopped production of the Dodge Dart, the Chrysler 200, and the Dodge Viper. None of its remaining car models are made in the US.
Other automakers have also cancelled cars over the past two years. Most notably, Toyota killed its entire Scion brand. Some models migrated to the Toyota brand and others, such as the Scion tC, just died.
As automakers abandon cars, sales will plunge further. No one wants to buy the end of the line. And these plunging sales will be further reason to cut car models. A circularity will set in, sort of a death spiral.
But some foreign brands will try to keep their car tradition alive, and they will develop new models and try to woo the finicky American consumer with real cars, and when gasoline costs $7 a gallon, suddenly they’ll have a bestseller on their hands, and the wailing and gnashing of teeth in Detroit will be heard all the way to Washington. Or motivated by this type of gas gouge, consumers will discover EVs as cost-effective alternatives.
Going forward, I will no longer distinguish between “car” sales and “truck” sales. It doesn’t make sense anymore. It’s the end of an era, in terms of distinctions. It’s a hard thing to do, linguistically. I cut my teeth in the “car business,” as it was called confusingly, though we, in truck country, sold way more trucks than cars even back then before anyone had even come up with the terms SUV and crossover.
GM already cut the third shift last year at its plant in Lordstown, Ohio, which builds the Chevy Cruze compact car. Now it cut the second shift. Read… More Carmageddon at GM, Cuts Shift in Ohio, 1,500 Layoffs, as Cruze Sales Plunge. Production in Mexico Started in 2015
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No surprise, US Automobile makers have always been short-sighted. Anyone remember the ’70s?
I remember the 70’s. Folks were looking for something with better gas mileage and value. These were the years Datsun, Honda, and Toyota took off. I have found memories of the 510, 1st Accord, and rear wheel drive Corolla (miss that car). The America companies really struggled with quality then and Europe too. Remember the VW Dasher and all the fuel injection problems.
My dad had a Datsun 240Z! We used to get 5 people in that thing.
I’d like to see a picture of that.
I wish I had one!
Keep in mind this is the 1970s. People like half the size, on average, they are now. It’d be Dad, two of us sitting on the sort of half-seats in the back (not sure if they were even meant to be sat on) and two of us in the shotgun seat, one sitting on the other’s lap. We ranged from about 9 to maybe 13 years old.
I had a 280Z for 20 years. The mostest ever that I was able to shoehorn into it was four smallish adults: me comfortably in the driver’s seat, two adults sitting on top of each other in the passenger seat, and one adult in a fetal position in the storage area in the back. I tried that only once in an emergency.
However, several times I had two adults packed on the passenger seat. That’s not too bad, if they like each other.
Thats the SWB version there is a LWB ZX that legally seats 4 you can get/put 1 under the hatch also.
Cant remember if they made a LWB 240/60.
I also had a couple of 280Zs and a 240Z, but there was no way to have more than a driver and passenger. In ’79 the 280ZX was introduced, and it had bit more room, plus disc brakes in the back.
A six-pack of Weber DCOE carbs and headers (with a muffler too) made it sound great and go nicely.
Never tried the two-person stack method in passenger seat though …
Yes, they couldn’t sell a small car, focused on big cars, then the oil price explosion hit, and everybody wanted a small car, until oil prices bust and everybody wanted big cars. It was the development cycle syndrome which used to be several years then.
Carmakers don’t sell cars, people buy them. And because foreign producers mostly only built small cars they stood ready to supply them, even if a lot of them were unsuited to North American distance driving and weather conditions. And for some reason, foreign cars at that time mostly never seemed able to get the electrics, the heat, and the starting working right. I was a Fiat victim, twice, but I did love my Lada … reminded me of my ’56 Chev, and never stopped going no matter what. Good bush car, and just 1200 bucks if I remember correctly.
LONG LIVE the PACER, LONG LIVE the PACER, LONG LIVE AMC !
On my second Taurus, made in 2010. Built like a tank. Very heavy car that rides like a dream. I would still be driving my other but I cracked it up at 160,000 miles.
I will miss the Taurus.
My lovely wife owned a Grimlen. It looked like high-top tennis shoe. The Pacer looked like a fish bowl on wheels.
Just thinking the same thing. US carmakers don’t see to the future. They produce gas-guzzlers when gas is cheap-ish, then when gas prices skyrocket they find they don’t have any fuel efficient vehicles when customers want them.
A nice strategy, since seemingly they can always rely on tax-payer money to bail them out ever time this fails. They make the profits when their strategy works, then taxpayers pick up their losses when the strategy eventually fails as its almost certain to do.
It’s the margins on cars that have disappeared.
The first cars at the turn to the 20th century looked more like crossovers than sedans.
This is just a 100year cycle. By 2040 we will be all zipping around in little capsules the size of a caskets that can be rented using our smartphones and dumped anywhere along the street for the next passenger to use.
I picture big quad-copters that use AI and GPS to pick you up and drop you off. You’ll where a special helmet that connects to the under-carriage. The quad-copter will just swoop down, connect to your helmet and take off. Remember to lift your legs when going over power lines. And you’ll be able to call one up with your internet of things powered silverware.
The future will be so much better.
This made me laugh out loud. Hilarious idea!
I remember someone asking whether the Model T was a car or an SUV? No one could give a definitive answer.
The new model for 2019 .. the “Buckboard”
The 54 MPG fleet mandate has forced mfgs to make smaller “cars”.
If you have a one vehicle family, for practical purposes you need a small SUV.
Ya cannot go to costco anymore to TP and kitchen paper towels. as you have no way to get them home. Of course, you can always use on line.
At 72, I like my Toyota Avalon. I really liked my Grand Marquis. I am 6’2″. Used to be 6″4″. Broad Shoulders.
If I call for a Uber, I have to request the full size or van.
Went from SUV to Avalon. Amazing mileage for a big sedan for $29K.
The new avalon is being rated at 45 mpg if i remember the article correctly. But i am 72
‘Dumped anywhere along the street’, brings to mind the recent example of rental-by-smartphone bicycle catastrophe in China, with dozens of companies competing, and most failing.
The bicycles were piled high, massive mountains of bicycles everywhere where people threw them. If it’s not yours, and it’s cheap, who cares?
But when Ford tried to move small car production south to Mexico, there was a US squawk. These small cars were only ever available to US buyers BECAUSE of the Mexican and South American market. US volume alone could never have justified production.
So now you are stuck with trucks which most of the time carry nothing but always guzzle gas. The vast majority of trucks are used as cars, with the driver in a truck driving fantasy.
Been there, even if it was my only truck, a Ford Ranger. But this second vehicle fantasy, after a few runs to the dump only cost me about a thousand (bought and sold for 2 K ) after ins, tax etc.
What do these guys do who have spent 50 K , who aren’t contractors, to drive around playing truck?
They need to wear their white cowboy hats and doing that in a car just looks wrong.
I drive a 4×4 body on frame SUV. I work as a nurse in the snow belt so I am a mandated employee. The roads where I live (PA) are most often complete crap (despite the nations highest gas tax) so my truck/suv can handle the myriads of potholes and imperfections without causing damage to the suspension and/or tires. I would much rather drive a nice sporty car, but every time I hit a pothole I am thankful for the solid and sturdy body on frame construction as well as the beefy tires. Considering it has been paid off for many years (2006 xterra) the fuel costs can be finically justified.
The roads where I am are HORRIBLE. Potholes the side of kiddie pools. I’m surprised my bicycle (7-speed cruiser with big fat tires, meant for200+ lb riders) has held up as well as it has, although even with Slime innertubes I’ve gotten a few flats, a broken spoke on the rear wheel, and periodically have to tighten the handlebars. It’s a bike version of an SUV and this indeed is why SUVs are popular in Santa Clara country; it’s the horrible roads.
Along with sedan, we have an older model Suburban (my 2nd). Wish I had an oil refinery in the back yard becuz by my calculations I have spent $60-70k on fuel since 1995 in the 2 suburbans. This is also the approx. combined purchase price.
Neverthess, it is priceless to us even though it is worthless to most. I put bales of hay in it, pinestraw, tennis team, lawn mower, fly fishing buddies, transport kayaks, road trips, etc etc.
It is basically a covered pickup with very comfortable seating for 6 + luggage, dog, …. i do not own a cowboy hat though.
It’s all unaffordable these days for prudent buyers. I realized a few weeks ago that when my 32 year old Toyota PU bites the dust we will downsize to one vehicle, most likely some kind of (used) 4 wheel drive utility vehicle capable of towing a small trailer. (Our car is a 9 year od Toyota Yaris.) I looked at my neighbour’s truck use and realized he drove his PU around, empty, for 99% of the time. Even though I am a builder (and use my truck), it is cheaper for me to have materials delivered for larger projects and a nice little trailer with a rack will haul up to twenty foot lengths for the occasional fifty mile run into town. I need to be able to launch a small boat and pull a trailer maybe 20 times per year. Trailer insurance is $40/year. Truck insurance has to be $1,000.
I have to ask why people think they need a truck? It’s crazy. Gas here is $1.44.9 cdn/litre. That’s approx $4.35 US per US gal, and our country is energy self-sufficient and a net petroleum exporter by almost 100% of domestic consumption. There may be some downward blips in fuel costs in north America, but long term the price of fuel will climb to unaffordable levels for everyone. Good thing Japan/Korea/China will be filling the need for affordable small cars. They’ll probably still be building Mustangs and Dodge Chargers in Detroit. US automakers have been playing car catch-up for decades. Who won the war, Pinto wagon vrs Corolla wagon? hint…I had a Pinto and let me tell you………… My wife’s first car was a Maverick. Her 2nd car was a Honda…go figure. :-)
And all the trucks around here will be in the carport with lapsed insurance because it costs too much to run them.
“downsize to one vehicle” that is the third time this week I have heard that. If that is a trend then we are in for a wild ride!
My son moved to NYC; I am driving his old Beemer. When it has a major repair, we will contract to 1 car. I can rent a car with U/L mileage for under 50 bucks. Enterprise picks you up and drops you off.
Works as long as one has car insurance, then that covers the rental. When I went to zero cars for awhile, this sounded attractive until I realized I was either paying out the wazoo for rental car insurance or taking a big risk that nothing would happen in big city traffic.
“Never buy a German car without a warranty.”
German car: Mistress
Japanese car: A wife
Make that 4 Silvergirl. What’s happening in the US is happening the same in the UK. If you can get away with one car great. Regards Steve.
When buying a vehicle one has to weigh the purchase costs against the running costs.
Which is better to own: a fuel efficient, brand new SUV or a used, depreciated SUV that guzzles gas?
Lot’s of reasonable used vehicles that can be bought and run into the ground that are much cheaper to own and operate than new or reasonably new.
Gasoline did one its famous jumps here this week by going up over 25 cents liter to hit A$1.569 per liter.
Haven’t seen price like that for ages and is near the all time high of A$1.699 when the POO was over three digits.
Boy are we getting ripped off downunder.
Gas in central Alberta, the cheapest in Canada, is at $6.43, when figured out in the little U.S. gallon and the current currency exchange rate. People whine about it while filling up their pickmeup macho machines. Paulo’s 1.449/L comes to $7.12 equivalent. It goes up from there. The killer Carbon Tax in Alberta contributes about 5 cents (6.5 cents equivalent in U.S. currency) to that price. I too loved the Mazda 1/4 ton ‘truck’ we used for years – made by Mazda, before Ford bought them out and gave us their downgraded version instead. Now we have an American made sedan – a Honda Accord Hybrid that delivers 4.7L/100km = 50 mpU.S.gallon.
There are those who need beefy vehicles for work, yes. My friend who is a travelling nurse in rural Alberta (at least 5 months of winter and gravel roads only) uses her Toyota Corolla and has for several years!
Just saying….
My first car was a Mercedes 240D 4-cylinder diesel, 1979 model I think, and it was great on dirt/gravel roads.
Something fishy with those calculations.
At $1.449/L x 3.78541 (converting to gallons) = $5.49cad/gallon. Converted to USD is $4.27/gallon… not $7.12.
Here in Toronto, gas prices are still well below your quoted ‘cheapest in Canada’. I’m filling up my Lexus ISF with 94 octane at just over $1.40/L and not complaining yet.
When gas spiked to $5 per gallon about 15 years ago I had a friend that sold a Yukon because he couldn’t afford to drive it. I recall trucks were extremely cheap at that time because nobody wanted them. If gas prices increase for any reason, I think the value of used trucks will drop 30-50% fairly rapidly.
LOL. I was looking for a replacement vehicle at that time. When I mentioned to the car salesman that I might want something with some ground clearence to go into the mountains, he happily took me over to a large parking lot just full of used trucks and SUV’s that they obviously couldn’t get rid of. With gas that high, my next stop was to go check out the new Prius, and ended up with a Corrola that they hadn’t been able to sell with everyone pre-ordering Prii.
Well, gas is currently $6/gallon here in Vancouver. Still a lot of trucks (and ‘trucks’) on the road.
Lots of stupid people wasting lots of their hard earned or not so hard earned money obviously This too will end soon
In theory the more people waste on clown cars the less money they can spend inflating a housing bubble…
So let them spend away.
I get ads for trucks and SUV’s on the page with this article. Google must not be reading the comment section. :)
Ed I see those too…anyone want a Dodge RAM or JEEP just click on the ads above?
I’m a small station wagon kind of guy as they are just so convenient. Carry kayaks on the roof rack, mountain bikes on the hitch, fold rear seats down and load up at home depot. Hell I use my 2007 Audi A4 Avanti like an SUV or pickup truck! Wife has Subaru Crosstrek and when my car dies hopefully after clocking in 200,000 miles I’ll be looking for another wagon maybe VW Alltrack or Subaru Outback.
The rear seats on my Honda Civic fold down allowing me to carry small loads of lumber. Plus I can throw a pair of cheap roof racks on it to carry anything else. I use it as a pickup truck.
I did this with my 1990 Civic sedan. Leave the trunk open and can carry lumber. My ex and I did two kitchen and bath remodels this way. We rented the Home Depot truck for big loads.
In general, I can assume someone with a pickup truck is someone who can’t do long division.
I use my Saab 9-3 2006 the same way, and love that it can zoom on the highway too! 210 hp, 220 lbft torque and I get 23mpg because it’s manual. Fits 5 comfortably, and still has that new car smell.
Bought it for $5k at 80k a year ago with cosmetic issues only. Mostly GM parts that are fairly cheap. You can’t beat that. I truly fail to understand people spending 10s of thousands on giant new cars/trucks….
Good. Get oil back to $100. That’ll be great news for burgeoning EV industry (not to mention, the Canadian economy).
Shouldn’t be long now Brent is pushing above 75 as we write Can you imagine crude prices if they attack Iran and they sink a couple ships in the straits of Hormuz? Scary but realistic scenario folks
I think there are a few problems with that formulation.
Gasoline prices at $100 a barrel would crush much of the economy and induce a recession. Disposable incomes would dry up and transportation costs rise dramatically.
As for EV’s, they are cost prohibitive for many people and still lack the infrastructure to make them truly effective. We also have to take into account that the truck craze is a cultural phenomenon. It is propped up at extraordinary cost by a male population desperate to assert its manhood in some concrete signifier. Ordinary working men 50 years ago didn’t need trucks, they could drive a Chevy, because their job at the plant or the mine or the foundry provided them with all the proof of their manhood they could handle. They also enjoyed a paycheck that made them “bread-winners”. Now, not so much. Most modern jobs (if you’ve got one) don’t provide that psychic payoff. Thus the fetishization of guns and trucks to provide the psychic reassurance that jobs and salaries once did.
Whew… you’re alienating a good 70% of the male readers.
No doubt. But truth sometimes leads to alienation.
People need validation. Many women responded to what they perceived as the diminution of their roles as mothers and housewives with a beauty, plastic surgery, and dieting blitz of epic proportions over the same time frame.
I’m hardly the first person to point out that modern consumer capitalism is fantastic at providing people with stuff and lousy at providing them with meaning. You don’t have to be Buddha or Jesus to understand that stuff is a bad substitute for a publicly validated role in society that provides meaning and purpose to our lives. Take that validation away and people substitute “lifestyle choices” that never quite scratch the itch. Of course, consumer capitalism is happy about that, because it makes money off of feeding that unscratchable itch. But it’s bad for society.
James, interesting take. When we can come to the same level of understanding of ourselves and our own motivations, it lends credibility to that type of analysis. From my observation, most seem to prefer analyzing others. Analyzing yourself is hard and dangerous work, though very beneficial …like most things hard and dangerous.
+1000
Comes down to knowing the difference between, “Lifestyle(s)” and “Quality of Life”. Unfortunately our kind of consumer capitalism emphasizes the former. And, too many people are blind to the differences.
How soon we all forget
Place the blame for the full size P/U , SUV craze firmly upon the shoulders of one GWB when he handed out massive tax credits and discounts to anyone buying full sized American ( branded ) P/U or SUVs while going out of his way to mock anything small and efficient ( especially the SMART ) creating an addiction for the genre despite most people not needing either … post 9/11
And a lot of people bought big pickup trucks thinking they’d get the write-off and then didn’t get it.
Soooo … spend $50k you can’t afford to spend on a big macho pickup, thinking you’ll get a ton of it written off and then … it doesn’t happen.
I think pick ups are popular because they come with the option of putting a camper on and living in it if necessary. Similarly with vans and some SUV’s. Also can haul a lot, from home improvement centers. Also lots of people who own businesses find them handy. They do way more than cars and give you an up-high view of the road and scenery. Newer ones get decent mileage too.
its $7 in the UK. I have a Merc GL420, but average under 5k miles a year and need the space when going away with 3 kids. If I lived rurally then I would need it for carting stuff around, benefit of a pick up is you can put a lot of muddy or dirty stuff in the back to hose down. The cars is 10 years old, bought second hand. I think it can easily run another 10 years.
I live in rural MA. Surrounded by trucks. Most people here use them to haul wood, lumber, etc. We drive small fuel efficient cars. About 2X a year we need a truck to haul something big. In that case- we rent one from Uhaul for 129 bucks. So we spend maybe 300 on rentals in a year. That is far less than the gas increase and car price increase we would have if we drove a truck. Any cool stuff by the side of the road or on craigslist we might miss out on is not significant. Anything more we might buy to haul- we probably do not need. Just ordered huge planting beds and industrial shelving- Amazon delivers. No truck needed. Not even for my Johnson envy (I am a woman).
Costco gas is 2.55 and others are 2.99 now. Talk about a total ripoff right now.
Costco overall operating income margin is .7%, excluding the membership fee. So Costco is really selling its overall profit line at as close to cost as it can.
I presumed that includes gas too. Costco is lower cost in my areas by 30-40 cents per gallon. Costco coveres over head with its pricing.
so at regular gas stations, the 35 cent difference is purly profit. A decent station has to service 20-30 cars per hour easily–400-600 gallons per houtr and if say ther are 15 good hours per day, thats 6000 gallons per day which is 2,000 profit per day. If I am wrong its 1,000 profit per day.
If you are a low volue stattion, small town etc, you have a problem. But they stay in business,no?
According to this site, net profit is 3 cents per gallon. At 6000 gallons per day, that’s $180 in profit. They only sell gas to get you in the store to buy something else more profitable.
https://www.mercurynews.com/2014/12/12/gas-stations-have-record-profit-margins-despite-price-decline/
Joe
I could not get in site but 3 cents after overhead seems too little given costco is 35 cents less per gallon of premium.
that’d be cigarettes and lottery tickets.
Nothing else in the store pays for its shelf space.
One factor driving this shift has been the distinction between “light trucks” and cars in the US CAFE fuel economy standards. SUVS and crossovers are typically covered by the “light Truck” standard.
This has driven significant changes in car configurations (compare a Passat wagon to today’s Golf wagon) that has reduced interior space and rear visibility.
And thus pickup trucks have a substantially less stringent fuel economy target than typical cars.
Here in mid-coast Maine, we see a lot of small crossovers and VW golf wagons. And Our 2017 golf wagon (mostly free due to the VW diesel buyback program) can get as much as 47 miles per gallon on a trip to town (10 miles away) and back over rural roads. It also has equal if not bettter acceleration than our Jetta TDI wagon had – basically equal fuel and acceleration performance.
Another quite popular local vehicle for families with children is a double cab pickup…
The bigger picture here is the relentless downsizing of the US economy. Too many companies chasing fewer and fewer profits. The auto industry is perhaps one of the best areas to study because of several factors: 1) most purchases are with debt, 2) many purchases are tied largely to ego (or lack thereof), and 3) the industry is largely at the mercy of oil prices.
Wolf is correct. Ford will pay a huge price for exiting the car line. When oil prices make their next move up, they may go bankrupt if they cannot react fast enough. Hopefully they will be smart enough to see it coming and early respond with a smaller, “full sized” pickup, like the older Tundra I own. Great sized truck but probably not “manly” enough for the weekend warriors that so make up the buyers of these monsters on the road. I would even love to see the old really small toyota or datsun pickups of the 70’s. Now that was a practical vehicle.
I thought Ford built cars for markets all over the world? Are they getting out the passenger car business for all their markets?
The announcement about the Ford car eliminations was for the US market, mostly – it mentioned “North America” which in Ford’s case is meant to include Canada, not Mexico.
Ford is restructuring its businesses in other markets too, particularly in China. It builds most of its cars for Europe and China in those countries.
No. They’ll continue to make and sell their cars globally. The new Fiesta and Focus were just introduced in Europe. But we won’t be getting them here, other than the Focus Active, which will be a Focus hatchback raised a few inches and with body cladding added (the same idea as the Subaru Crosstrek, which has been a hot seller).
>Wolf is correct. Ford will pay a huge price for exiting the car line.
Most small SUV’s are car based. A company takes a car like the Camry, raises it, gives it a wagon type body adds AWD, and then calls it an SUV (or CUV) so, the whole “get rid of cars” thing is sorta fictional. If ford ever needed to get back into making traditional “cars” they’d just have to reverse the process and downsize an existing car based SUV. They could probably even build it on the same line.
Finally … someone reveals the realities of what is commonly called badge engineering among po’d serious Gear/Petrolheads
The fact is the overwhelming majority of todays so called SUV/CUVs are nothing more than cars with an SUV/CUV body on top and slightly elevated ground clearance
How to tell ? If its not Body On Frame .. its a car based SUV/CUV … or in Honda’s ( and soon to be Mercedes Nissan etc ) case … pickup trucks as well
So what would Ford need to do if oil prices were suddenly to attain a level of profitability ? ( $100+ per barrel )
Change the bodies back over to cars and lower the suspension .. easy peasy puddin and pie .
Check Ford full size F 150, GM Truck and Ram. What do you see the most ads for?
They ARE body on frame and if you back out those all three would be in trouble.
Or import from the other than north american markets
Ford will be OK, they have production around the world. When the Truck market crashes, it will be the American worker who takes the beating (as usual). Huge layoffs and no need to convert plants as cars can be brought in from foreign countries. Maybe our Government will provide some workers protections ? I wouldn’t count on it.
“Maybe our Government will provide some workers protections ?”
Laughed so hard I spilled my coffee!
They already give competitors for full size half tons (F 150 etc.) a 25 % tariff on imports.
Ford does not produce as many cars/suv’s in overseas markets as you would think. I have traveled extensively in Europe, Asia and South America. Tarriffs and the wrong vehicle mix plus lack of fuel efficiency make American Vehicles scarse. If you see a big Suburban it’s either US Government or a foreign national requiring armored vehicles. The wealthy abroad drive Audie’s, BMW’s or Range Rovers. I was in SA in February and you would never guess who is in the small and mid size truck market. VW, Peugeot, and others. Ford of course left the small truck market but American trucks are more expensive and less fuel efficient. People are looking for light uncomplicated cars. (Roll up windows and easy to fix)
As far as the American Market. I drive a Ford Fusion Hybrid. Lifetime average 42.5 and I have 83,000 miles on her. Gas increases have taken me to $30/tank fill up gor a range of 600 miles. Fifty percent more than just a few years ago. We feel that it was one of the better cars we have owned. My husbands 2002 GMC Yukon was T-Boned and totaled. My husband had do get a vehicle to haul stuff for around the house and to and from our boat. Used full size pick ups were to expensive and small Chevy pickups were to small inside. After 6 months we settled on a new Honda Ridgeline (built on a pilot unibody). We liked how it drives and for a truck it’s gas milage is reasonable.
My husband I think Ford is making a mistake unless they intend to get rid of the car moniker and go right to the new EV vehicle classification that will include, cars, crossovers, SUV’s and autonomist vehivles. Boomers are aging and they will require smaller less expensive vehicles. Honda, Toyota, and our European cousins are ready to step in. Financing costs and price will dictate what people will buy. Nothing new there. The party will end and it will end badly.
Ford is the most popular brand in the U.K. The Fiesta and Focus are both big sellers there. The Fiesta is the #1 selling vehicle there.
Ford and Cosworth have made some fine high performance cars that have been popular in the UK and Europe; for example, the ’92 to ’92 Escort RS which was made in the German Karmann plant. Fitted with the Cosworth YBT 2 litre inline-4 turbo, these things could be modified to throw out insane horsepower. While this was a rare car of limited production, Ford and Cosworth made great cars that were affordable to driving enthusiasts.
’92 to ’96
Not True Ford have the Ford Range Developed in Australia and is the biggest selling Pickup in Aus its single handedly accounts for something like 60% of all fords sold in Aus its also good on fuel the biggest 3.2 L variant get 9-10l/100. Lots of small Pickups hugely popular in Aus and pretty good on gas many getting 8/100 with a full 4wd and ladder chassis. VW amarock a very nice Pickup and Nissan Navara with full coil springs drives like a car and can haul stuff with great fuel economy. Ford is doing just fine outside of America.
“Ford have the Ford Range Developed in Australia and is the biggest selling Pickup in Aus”
Put the MAZDA badge back on that good truck and you will be a lot closer to reality.
Here we have them with both badges. BUILD QUALITY ON THE MAZDA way way exceeds, ford build quality but.
Amen to that.Pickups are way over-sized and over-built for what they are mainly used for which is hauling boxes of diapers home from Costco.
Smaller trucks were adequate for 99% of what what most people need trucks for and were way better for actually 4×4 ing which is what most new trucks are built for,but never used for.
” I would even love to see the old really small toyota or datsun pickups of the 70’s. Now that was a practical vehicle”
You could always import one, they still make them, they just dont sell them in the US.
Something to do with the GM bail out and protecting US Job’s, I understand.
You can also get Tundra with a much, smaller, lighter, and fuel efficient, 2wd/4wd drive-line, outside the US.
What about fleet buyers ? Have their demand for sedans also disappeared? Also how will the absence of lower cost sedans intersect with the Millennial preference for the sharing economy?
They buy what the public demands. So they too are buying more and more SUVs and crossovers. Resale values are higher on SUVs and crossovers, and that’s another big consideration for the rental companies. The switch is gradual, but it has been going on for years.
From my observation in San Francisco (not data), rideshare vehicles are still mostly cars.
I read Ford’s announcement yesterday on Yahoo Finance, and was only half-surprised.
Since I drive a V-6 Chevy 1500 (which, with a bed cover gets about 25 miles-per-gallon on the highway) and a V-8 sports car, I know which one I prefer to drive, and it ain’t the truck.
My son just bought a Colorado, traded the cost of 4wd for the 2.8l 4cyl diesel option and damn, at 75 mph he gets a bit over 30mpg. Better than our beloved Pontiac G8 sedan with a V6. I for one will always remember the rwd sedans. Betting our next will be Subaru Crosstrek, one of the last to offer manual transmission, what a concept vs. the ubiquitous go-kart belt drive CVTs. Hopefully it won’t be crapified with bling over durability by that time.
My first car was a ’68 Ford Mustang. I liked it a lot, and I only got rid of it because it rusted out. Today, I wouldn’t consider a Mustang. It’s a gas guzzler. As for small cars, I recently sold my beloved ’02 Saturn, because the AC went kaput (~$1,400). Rather than repair it, thinking it was about to become a problem child, I traded it in. I now drive my wife’s ’13 Cruze and she got a new Hyundai. Small cars are admittedly more dangerous because of the growing number of large vehicles on the road. Yet, I would never consider a big SUV or a pick-up. I find it ridiculous that some people are complaining about gas when it’s still less than $3 a gallon in most areas.
I think GM will close the Cruze Lordstown, OH factory, and shift all small car production to Mexico, where the Cruze hatchback is assembled.
The stats are a bit old, but I remember distinctly that for injuries per miles driven the least safe “car” was the Cadillac Escalade and the safest was the VW Passat. It turns out that people who are driving in what are effectively living rooms on wheels don’t pay attention to the road, and the Escalade doesn’t have the same safety standards built in as cars and, especially, minivans. Cars that you have to drive (standard transmission) tended to be safer as they forced drivers to pay attention to what they were doing. As per my comments above, minivans were the safest group of automobiles as a class but men don’t like to drive them because they are considered emasculating in our culture (God knows why).
Sounds like you’ve read the book “High And Mighty” about SUVs too.
It’s an interesting read. Basically SUV drivers tend to be insecure both of their own driving ability and in general.
The book even goes into what I’ve observed: I used to visit a friend living in a classic cul-de-sac in the suburbs in Huntington Beach. There was Crazy Yuppie Mom living a couple of doors away, and she’d come roaring in with her SUV and God help you if you were in her way. But God help you also if you even glanced at her own kids. But as the book says, Minivan Mom tends to see all the kids around as her kids and looks out for ’em all.
I believe the book was written in the 90s when SUVs were just becoming a trend. Of course there are tons more of the things now.
I also had a friend living in a Los Angeles suburb near the airport. He drove minivans only. They were great for loading tons of highpower rifle shooting stuff in – the guns, mats to lie on, targets, lunch cooler, etc yadda yadda … he didn’t need to prove any masculinity.
Got a 20 year old civic that gets 35/gallon and a 20 year old frontier that gets 23/gallon. Both run great are cheap to insure and easy to maintain. If you’re handy with a wrench and don’t attach an ego to your car, it’s fairly inexpensive to do this.
If gas goes to $7 a gallon , it won’t be the issue it was years ago.
Consumers can switch to EV and be done with it. Most auto manufacture’s
are ready to go if a surge of EV demand suddenly appears, so I
don’t believe they would be in financial difficulty if this were to occur.
And finally the auto makers seem to be ahead of all this .They are
building cash like crazy and should be fine when it all hits the fan
You can’t fully go EV because road trips still suck with EV only. Because abbtery tech still sucks.
And if gas gets that expensive there is no guarantee that eletrcitiy to charge a car will be that much cheaper. It could be, but many major cities have awful tierd electricity prices.
I won’t consider EV until I have solar power probably saddly.
“But some foreign brands will try to keep their car tradition alive, and they will develop new models and try to woo the finicky American consumer with real cars, and when gasoline costs $7 a gallon, suddenly they’ll have a bestseller on their hands, and the wailing and gnashing of teeth in Detroit will be heard all the way to Washington. Or motivated by this type of gas gouge, consumers will discover EVs as cost-effective alternatives.” – Wolf
Most people will discover EVs, I think (it’s the fashionable trend, High gas prices or not), and Detroit’s EVs can do well, along with the “foreign” brands.
Also, historically gasoline demand is elastic (some folks used to claim it’s not) and true truck drivers will drive less as gas price increases, probably to a greater extent than the EV drivers. The microeconomy still works better than the centrally-managed (rigged) macroeconomy.
Of the 2 cars ford will sell the Focus CrossTrek, I mean Focus AllTrak, I mean Focus Active will be built in China. Very very sad. I guess they think since GM is doing it with the Buick Envision they can too.
After years of straining family relations and friendships telling everyone to buy a North American designed and built vehicle Ford is making it really easy to walk away.
The American pickup truck has become a fashion accessory, as well as, a political symbol. Down here in the south it is a big FU to the liberal establishment. It is a counter punch to limousine liberals everywhere, especially in Swamp City, DC.
I read what constitutes the society pages down here, mostly to see what the ladies are wearing. It is normal for them to arrive in full regalia, at the most exclusive events, in their pickups. These people are making a statement, they can afford anything, but they are buying American.
Maybe, but they could show up in Lincoln Towncars like their fathers and grandfathers if they just wanted to buy American. What they are saying is “I’m a right-wing Republican”, which is a different issue altogether.
Lincolns are gas guzzlers too, pickups look less elitist.
BTW, I don’t see the Hollywood crowd giving up their private planes, or 10,000+ sf fully air conditioned places on the beach. Do as I say, not as I do! What does this say about liberal values? Lucky for them, oil drilling is being opened up in America and will eventually drive down energy prices.
Well, I’m not rich, I’m an adjunct History professor. I drive a 17 year old Camry, and I’m a social democrat, not an American liberal. So I have nothing in common with “Hollywood” liberals. Second, if the leader of your local religious community tells you not to lie and cheat, and it turns out he’s fooling around on the side, does that mean that “religious values” are false, the way you seem to maintain liberal ones are if those who espouse them are hypocrites, and does it mean that lying and cheating are therefore OK because the cheater maintained publicly that they are good? Because that is that seems to be the point of your post.
My Honda Civic is made in America!
I wonder if the Trump administration is planning to slap tariffs on imported SUV’s. I wouldn’t be surprised if something like that played into the calculations of Ford and GM. Giving away domestic market share to foreign competitors who have the advantage of weak currencies and protected home markets hasn’t made sense for decades. The car models will be imported from overseas if needed, since most will be sold overseas anyway.
Camaros are still popular down south.
Anyone know where I can procure a used SUX 2000 ??
I wanna get a DeLorean and put 6000 SUX on the back.
Don’t be the one left holding the proverbial bag or figurative hot potato when gas goes up. Down here gas is $6 a gallon and used full size trucks are worthless. They sit on the used car lots for years losing 80% of their value. 95% of the market is subcompact cars and compact trucks. Don’t be the one left holding the proverbial bag or figurative hot potato when gas goes up.
Fuel economy doesn’t sell. I honestly think the continued resistance to MPG restrictions on “cars” by the big three manufacturers created the marketplace where they couldn’t sell fuel efficiency. In the past 40 years we’ve seen horsepower ratings grow tremendously while the average MPG barely moved. And since “trucks” are exempt from most of the CARB’s more stringent requirements the sales force has directed it’s efforts that way. In 1982 I could buy a 2500 lb 1/2 ton Pickup with a 100 horsepower engine and get 28 MPG. Today a “small” Pickup is 3500 lbs, 175 HP, the same payload, and gets 25 MPG. That’s stupid, and shows a major failure of the EPA to enact the regulations it was set up to do.
I have trouble believing that Ford, who’s 5.0 liter Mustang, in 1982, made 159 HP and optimistically got 27 MPG couldn’t take the technology and effort that produced a 2018 Mustang with a 700 HP engine and created instead a “car” people would buy that gets 50 MPG.
Making that kind of car would require a sustained investment in engineering over decades. That is essentially impossible in late-stage, financialized capitalism.
Toyota can do it. So there is that.
Am I the only person who watches TV ads?
They are always yacking about fuel economy. Fuel economy is why the F 150 went with an aluminum body.
Of course, since they are all guzzlers, the fuel economy stats are always qualified with something like ‘best in class’ or ‘highway’ etc.
i have this theory that as soon as a technology is perfected our society abandons it. an excellent conventional stereo system can be had for $200 but nobody wants one. a great laptop for $800 dollars but everyone has to have a tablet. a great clamshell phone or a super accurate watch for $20… no thanks.
there are about a dozen very reliable comfortable safe sedans with better driving dynamics than a 70s sports car, can be had nicely equipped brand new for under $20k. seems like a good time to stop making them.
The essay about “Two Jaguars” by Bob Prechter comes to mind. So does something the Dali Lama said, “Imagine a world in which everyone drives a car..” Oddly enough the President of GM said the same thing.
The mini-van I once owned was probably my most rational vehicle – you could configure it to carry just about anything and for a while I even used the middle seat for a sofa in my living room. Completely unexciting, though.
My first car was a decrepit, old pickup truck with a great, long shift lever sticking up out of the floor, connected to a non-syncromesh manual transmission. Being able to drive that thing was an ego booster that no flash vehicle could ever match, and I’ve had my share of them.
Government regulation/interference with car design helped spawn truck platforms with car amenities bolted on. People liked them and here we are.
I wouldn’t count on $7 gas any time soon. Technology has caught up to the Petro industry. New ways of finding it and new ways of extracting it. The world is awash in oil. The u.s. is even a net exporter again for the first time in almost 40 years.
The US does export oil, but we are decidedly not a “net” exporter. We still import about 1/2 of what we use. We export because our refineries are designed to refine heavy oils, and fracking is bringing up super-light oils. Which is why the trains carrying them explode and create spectacular fires when they go off the rails instead of just leaving a black, sticky mess.
But I agree we are not going to see $7 oil anytime soon.
My sense is that Ford is figuring that by the time Americans will re-kindle their affinity to cars, EVs would be in vogue and by then it will need extensive retooling to support that and it’s going to sit on its hand until that happens.
With respect to EVs… someday they’ll be mainstream but given that both Tesla as well as GM are losing many thousands of $$ on each EV made is proof that battery technology is still not there. Some day it will be but not today. We’re probably 5-7 years away from that. Oh, and BTW, when that day does come the big auto makers will release tons of EV models, which will have the effect of crushing Tesla (or at least its insane valuation). Until then Tesla will continue to operate under the brilliant business concept of “the more we sell, the more we lose!”
Since before the GM Bailout the philosophy of ford has been
” we must make what they want to buy, not what we want them to buy.”
GM’S failure to make what the consumer wanted, lead directly to its bailout. Which it only got, costing the US taxpayer over 10 BILLION $, as p44 needed the UAW vote.
Fords decision to no longer make cars/small cars in the US, is US demand driven.
Various small Fords, are in fact. Mazdas with different badges, so Ford badges can return to the US market, on small cars, quiet quickly, and easily. When demand does.
But Teslas don’t run on electricity! They run on money!
https://www.bloomberg.com/graphics/2018-tesla-burns-cash/
At least where I live the SUV craze is driven by wanting an AWD vehicle that can hold 5 or more people for the purpose of hauling kids around. As a bonus you can fold the middle and back seats down and haul large things around.
Now when I was a young kid, such a thing wasn’t really needed. We had a sedan, but could sit 3 across the front and 4 across the back in an era where seatbelts were optional. If we needed to haul something, dad would use his work truck.
As for new cars, the math never made sense to me anytime I considered it. I had an Acura that got nearly 30mpg, was 100% paid for, didn’t require much maintenance, and insurance was about $15-20 a month. I could get slightly better fuel economy with something new, but it would require a car payment and much higher insurance.
There was an old joke about big cars vs small cars.Slightly updated it goes like this:
Q: Why SUV’s are less noisy than small cars ?
A:Because when you drive a small car your knees cover your ears.
If one can’t afford a new big car or gas or both let him drive some small pathetic 10 year old POS, making a virtue of necessity.
“Small cars are good for the Environment !”
Who cares !?!
I am King of the Environment.What is good for me is good for the Environment and vice versa.
And we can’t even look up to our parents for moral guidance on this particular subject.They all drove 8mpg gas-guzzlers with tail fins.
Small cars are out,big cars are in-so be it !
Yes but one advantage we had in those days was cheaper gas prices. Five dollars would fill a tank easily.
That is about right.In the 50’s an average guy worked half a day to fill up his gas tank with 16 cents-per-gallon juice.After returning from Communist Russia Lee Harvey Oswald earned $1.10 per hour at Chiles Stovall.
Only aristocrats at GM or US Steel made $3.65 per hour.The more things change the more they stay the same.
I remember my DI saying:
“Here with us you may get killed too.But you’ll never get killed while doing something stupid !”
That also applies to car driving.I don’t want to die in a small eco car while listening to NPR and eating tofu sandwich.Returning from the state park where I hugged all those stupid trees.
I guess there is a special section in the cemetery for this kind of people. ;-)
No, “big cars” are out too. They’re especially out. What’s in are “trucks” namely SUVs and crossovers and pickups :-]
Cadillac Escalade is definitely in,I could not help but notice while driving thru Washington DC area.
Tinted windows,gov license plates,probably the proverbial Men in Black who will leave no stone un-upturned looking for Terrorists,real or imagined.
I was thinking about buying this car myself,it is pretty reliable and comfortable , but I guess those guys sort of appropriated the brand.
One got stuck in a parkade a while ago. Had to get a pro driver to get it out. As with all stuff Caddy it will depreciate more rapidly than comparables.
I’m a little surprised the name hasn’t been killed off. If that is GM’s best hope. GM Truck better keep truckin.
@Nick Kelly
I would not bet on impending Cadillac demise.Somehow GM managed to re-invent this brand.
In the 50’s a working guy drove Chevrolet,his foreman drove Pontiac,plant manager drove Oldsmobile,doctors and lawyers drove Buicks and Cadillac was associated with Hollywood types,Elvis and wiseguys.
In the 90’s Cadillac was mostly driven by the constipated senior citizens in Florida at 20mph below the speed limit.
Nowadays Cadillac Escalade not only briskly sells in the US but is wildly popular abroad,especially in Switzerland and in the Middle East-I just looked up its international sales numbers.
Wolf… as I was reading this piece… I immediately flashed to the old Ford Ranchero and Chevy El Camino…
Surely that concept could be resurrected and they would sell enough units to make it worthwhile!
When I see some of the crap that comes out of the “Big Three’s” design departments… I immediately think their designers are just longing for retirement.
There are some nice looking vehicles coming off the drawing boards… (VW medium and full sized sedans, for instance. Gorgeous vehicles… would hate to repair them though $$$).
They won’t be missed. Small SUVs are a better idea. Plenty of good Korean and Japanese cars will fill any possible void. No one needs a Ford sedan.
Sorry just one more idea. If any car maker by chance wanted to sell cars
just build on that could withstand a T-BONE from a pickup truck.
Thats like saying, build a pickup, that can withstand a T bone, from an 18 wheeler.
Better:
How about requiring pickup drives to hold a truck license. Then there would be many less pick T bone involved collisions (Collisions not accidents)
You can safely bet 80% of current pickup truck owners/drivers, would NOT pass the truck test.
Dont fix what is broken, fix what is causing it, to become broken.
Can you even read numbers?
That was a rhetorical question.
Guys, please stop saying $7 gas. You don’t want the big oil guys hearing it.
Might the falling popularity of cars be somehow related to the increasing waistline of Joe Sixpack and his missus ?
It is a lot easier to climb intoa truck or SUV compared to the compact, confined space of a car
One thing that continually gets left out of the car v truck argument is that as soon as you get of the grade 1 highways a body over frame vehicle with big wheels and tyres, out rides and outlives, a unitary vehicle every time, by a considerable amount.
Americas off grade 1 roads arent getting any better in a hurry and have been getting worse since nixon.
Average car price 25000$ and above……..
Then throw in tax title tag, and of course full coverage insurance….
Average consumers paycheck……Forget affording the car price and tax, title, tag, or insurance….
Oh, and if your county has a car tax…..fuggitaboutit…….
It’s worse. “Average transaction price” (after all rebates, incentives, and discounts) for a new vehicle in the US in March was $35,285. This was up about $700 from a year ago.
Estimate by Kelley Blue Book
https://www.prnewswire.com/news-releases/average-new-car-prices-jump-2-percent-for-march-2018-on-suv-sales-strength-according-to-kelley-blue-book-300623110.html
New vehicles are one of the worse things you can spend your money on. Nothing we buy is that expensive and depreciates as fast. You can, and I did, buy a certified used vehicle at 60% of the original new sticker cost and actually have more warranty than the new model. The wife’s car, Ford Escape, we bought new because they were selling them at depreciated prices already. I think it was 5 or 6,000 below sticker.
I visited the VW dealer earlier this year. A leftover 2017 model was cheaper than the used certified models on the lot.
UK, when I had an Audi 100 CD transporting a few planks of wood slid through the open sun roof and one end resting upon the rear passenger seats knackers the sun roof mechanism. Believe me!
7 $ a gallon will only stop Americans from idling… but not from driving !