Tag Archives: autos

Americans Still Don’t Like Small Cars.

4 May

The Atlantic has generously accepted the second part in my series examining the U.S. automotive market and the drivers thereof.

You can read it here, “Americans Still Don’t Like Small Cars”

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Automotive Trends 1975-2010, Part I: More SUV’s, More Power, More MPG’s!

26 Apr

As gas prices continue to rise across the Country and we slowly, possibly begin what could loosely be described as the late-spring/early-summer driving season, I thought it high-time I started running some car and gas numbers.  Before we get into the price of gas at the pump and how it is likely to affect driving/car-buying behavior, I’d like to take a look at the composition of the U.S. vehicle fleet and how it’s changed over time.

Confirming the anecdotal experience of everyone who’s spent any time on the roads over the past decade or two, SUV’s are in fact slowly taking over.  Additionally, as I explained back in June, 2009, Americans simply are not fans of the small car, even when gas prices rise exponentially (I’ll be re-visiting this sometime in the next few months).  Allow me to share some additional facts in greater detail:

Per EPA data, in 1975 cars and station wagons represented over 80% of all vehicles produced, while trucks & SUV’s accounted for less than 15%.  Fast forward three and a half decades, and cars (including wagons) only represent less than 60%, while trucks (including SUV’s) represent almost 40% of vehicles produced. The following chart shows the production share of (in order from top to bottom) Cars, Wagons, Vans, SUV’s, and Pickups by size (small, medium, large) in years 1975, 1988, and 2010, including their average fuel efficiency (by miles per gallon).  The chart also shows how these numbers have changed over time.  Numbers in red (on the right three columns) are decreases, while numbers in dark green are mild (<10%) increases, and numbers in light green show more drastic (<10%) increases.


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Ad Spending Outlook 2011: With Football As My Guide…

24 Jan

Walk through the parking lot at almost any NFL game and you’re likely to see everything from decades old beaters to brand-spankin’ new Porsche Turbos.  American Football appeals to virtually all Americans, from “the poor” to “the rich” and everyone in between.  Companies know this.  Advertising firms know this.  Networks know this.  The NFL knows this.  Not only do they know it, they embrace and exploit it.

By observing the commercials aired during NFL games – especially games like yesterday’s conference championships (the “semi-finals,” for those unfamiliar with American Football), we can observe current the ad spending habits within industries and firms.

Because I’m a bitter New York Giants fan and I was primarily watching the Chicago Bears v. Green Bay Packers NFC Championship game to see if I won a bet with @eradke and @ilkandcookies, I decided to keep track of every commercial that aired during the game.  Herein lie the results:

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Robbing Peter (Maserati) to Pay Paul (Chrysler), or: Attack of the Frankencar, Act 17

14 Jan

Take a bite out of this: Luxist claims that Fiat management is considering building a Maserati-branded SUV (good!), with a Ferrari engine (great!), in a Detroit plant used to assemble Jeep Cherokees and Dodge Durangos on a Mercedes-Benz M-class platform (wtf?!).

Yes, you heard me right. If Fiat/Chrysler boss Sergio Marchionne has his way, in a few years you, too can pony-up $100,000+ to drive the New Frankencar!

Look: I doubt any Maserati (or GT) purist would ever be caught dead in a Ferrari-engined Maserati SUV – no matter how good the performance – as long as it’s assembled not only in Detroit, but on the same line as the cars the plebes drive, American bread & butter Dodge and Jeep. That being said, the Cayenne is not a pure-bred Porsche. The Range Rover is not a pure-bred Land Rover. Even Bentleys and Lamborghinis are not totally pure-bred these days; the economics of the auto industry (along with the internal politics, management’s egos, etc) simply make it virtually impossible, short of a Bugatti Veyron (itself not 100% bespoke, as Bugatti is owned by Volkswagen Group).

Could this new Frankencar Maserati/Ferrari/Mercedes/Dodge/Jeep SUV become a reality?  Sadly, yes.  Perhaps not exactly as imagined today, but platform and technology sharing is the reality of the modern auto industry.  Hell, if BMW can build cars in South Carolina, why can’t Maserati (Fiat) assemble cars in Detroit, god knows the city needs all the help it can get!

Lastly, this brings up a question automotive enthusiasts have been debating (or rather repressing) for years if not decades: What makes an Italian Grand Touring car an “Italian Grand Touring” car?  Designed in Italy? Engine built in Italy? Everything built and Assembled in Italy?  What?

I’m not sure where I stand on this topic but considering trends we’ve seen in the global auto industry the past 20-30+ years that show no signs of abating, I think its unrealistic to expect your expensive “hand made” Italian automobile will have all of its parts designed, built, and assembled in Italy.  It’s just not realistic anymore, unless you have a bank account and patience like James Glickenhaus, who can afford to have Pininfarina hand-build cars like this:

Translating Corporate Speak: Fiat/Chrysler Edition

13 Jan

Fiat/Chrysler Honcho Sergio Marchionne is just as full of shit as his peers at GM were.  He claims that the firm’s #1 goal is to refinance their debt to the U.S. and Canadian Governments with private loans/bonds or possibly even an IPO.  Perhaps – and I’m just throwing this out there – his #1 goal should be, uh, running a freaking car company…

Remember when GM was prepping the IPO and the rushed re-payment of Government bailout loans?  They said the same sort of BS.  “We need to repay the Government ASAP because the loans are hindering our financial position.”  Right.  The generously-granted Government loans that you got after slashing half of your pre-bankruptcy debt are such a huge problem.  Not dysfunctional corporate culture, operations, and management.  Right…

Let’s be honest here: the ONLY reason GM and Chrysler want to repay the Government(s) is to get Uncle Sam (and whatever his Canadian counterpart is called) off their back and out of their hair.  It has little, if anything to do with the burden of extreme debt service.  If Chrysler can’t IPO do they really think the terms they’ll receive on private-sector borrowing are going to be more generous than emergency bailout funds from the Government? Please.*

Could Chrysler do an IPO and raise enough money to repay the $7bn it owes the Governments?  I haven’t seen recent complete financial statements so I can’t say for certain, but I sincerely hope investors will proceed with extreme caution if they do.  Chrysler is not GM (and I dont think GM’s prospects are nearly as good as the rest of the market seems to think they are).

Learn how to read between the lines when company executives talk.  It’s a skill that will serve you very-well over time.  I promise.