The Next American Car Recession Has Already Started | Hacker News Reader

The Next American Car Recession Has Already Started

bloomberg.com

42 pointsjbredeche71 comments

I wonder how many potential sedan buyers are just deferring their purchases awaiting a cheap electric with good range?

Waiting for a station-wagon, actually

This.

BTW, fellow wagon connoisseur... Have you seen the 2018 Porsche Panamera wagon?

Porsche used to be cool looking beautiful vehicles for whatever time periods. They really went downhill when they released the Cheyenne.

The Cayenne and Macan are their best selling vehicles and largely credited with keeping the company in business.

Macan turbo is a cool looking car. But I also have an extremely low opinion about people who decide to purchase a performance sports car brand, and then pick the SUV model.

The Cayenne is ugly and it's a rare sight to see one driven by a responsible driver. The only reason I can anecdotally say that is because they are ugly and stick out like a sore thumb. It actually was memorable when I saw one using a turn signal and obeying the speed limit. It was like seeing a unicorn.

And the Panamera can tow a boat (seriously, IIRC, the euro model can tow a few thousand pounds - US car isn't rated because lawyers).

Yeah, but... https://c1.staticflickr.com/4/3817/9066371914_b93ba47d92_b.j...

People want room. US emissions standards push manufacturers to turn bigger vehicles into trucks.

CAFE is weirdly anti wagon.

https://www.thetruthaboutcars.com/2012/10/how-cafe-killed-co...

New Volvo V60 looks pretty nice, and has a plugin hybrid option too, if that's your thing.

https://arstechnica.com/cars/2018/10/the-volvo-v60-wagon-is-...

That and we have taken massive depreciation hits, which makes is less desirable to sell or trade if you financed a bunch of your purchase.

I'm waiting for an electric Toyota Tacoma. Meanwhile, I drive a Civic. It's not too bad, but it only gets 34.2 mpg (long term average) with 80% highway driving. I may need to review my driving habits though. I got used to 51 mpg with my Jetta TDI but they were cheating of course.

>I'm waiting for an electric Toyota Tacoma.

I bet those would fly off the lots and into driveways in nice neighborhoods as fast as Toyota can make them. A hybrid Tacoma would have all the "I'm handy, but not some hick that drives a full-size" implication of a new Tacoma with the implied environmentalism of a Prius.

I'm not saying this applies to you personally BTW, just that the "image" a hybrid Tacoma projects would subconsciously seal the deal for a lot of buyers.

Honda is coming out with a hybrid Ridgeline next year, and that image is definitely the customer they're after.

I'm waiting for the Miata of EVs to appear. If the original Tesla Roadster weren't so expensive and had supercharging support I'd already drive one.

Not interested in the EVs which resemble smartphones on wheels, surveillance I can't control in my automobile? No thanks.

At this rate I'm very tempted to buy a wrecked Model S and retrofit the powertrain into a 60s something or other.

They are just buying SUVs. The overall amount of cars being bought hasn't gone down.

Is this affecting non-American manufacturers? If not, why?

To a casual observer, the writing has been on the wall for sedans for some time. Why would I want to buy a sedan when I could buy a crossover SUV with the same fuel economy for the same price?

Ford has been on top of this trend - they announced they are discontinuing ALL sedan production earlier in 2018.

Car manufacturers come out with new "generations" of vehicles every 5-10 years, so change in production methods is part of the industry. Why can't American manufacturers adapt?

Ford is keeping the Focus and Mustang.

  the Focus

No, but there will be a new "Ford Focus Active" which is an entirely new platform -- a crossover.

It's not affecting foreign automakers nearly as much for two reasons:

The Japanese automakers have really worked hard to make their manufacturing lines (and vehicle designs) modular (a line that makes Camrys on Monday can make RAV4s on Tuesday), the foreign automakers' sedan sales didn't slip nearly as badly as the domestic automakers did so a lot of their plants/lines are still profitable to operate, and the US has always been uniquely interested in trucks and SUVs so many of the foreign-owned plants here were already optimized for SUVs (e.g the BMW plant in America has made SUVs since its inception).

> a line that makes Camrys on Monday can make RAV4s on Tuesday

In fact it is even more agile than this! I toured a Toyota factory in Japan last year and they were assembling many different models on the same line at the same time, with the same workers. From what I recall, it is supposed to improve morale as the work is less repetitive.

I highly recommend the tour. It is free, and there is an English-language option. The only downside was it was quite a long train ride away from Tokyo, for quite a short tour.

Why wouldnt American car manufacturers do the same? They don't have the technology?

Historically the American Cars and SUVs were different enough that it would be untenable to make them side by side. It's gotten better since the SUVs became more car-like, but they haven't invested in modularity like the Japanese automakers, sometimes the companies blame unions for the inflexibility, but I think that's a red herring. However, it may be the case that the unions make it expensive enough to build modular lines that it's just not worth pursuing.

> Why would I want to buy a sedan when I could buy a crossover SUV with the same fuel economy for the same price?

Because you live in a city designed for horses and carriages? It's tough enough driving a small sedan in Sydney, the idea of trying to park an American-style monster SUV here scares me. Much of Europe and Japan is exponentially worse.

Fun fact: in California, most lanes are 12 feet (3.7m) wide. In Sydney, many major roads including the Harbour Bridge have 2.8m lanes, and there are buses 2.5m wide driving on them.

Do the dimensions on something like https://en.wikipedia.org/wiki/Ford_Edge#Second_generation_(2... qualify as "monster"?

I guess 1.9 meters will be manageable enough for most drivers given a 2.8 meter lane.

But why do you want to drive a car into a city?

I don't and very rarely do, but there are narrow lanes on many Sydney arterial roads well outside the city, like Parramatta Rd.

Personally I really dislike SUVs and Crossovers. But also when I was recently in the market for a different car, I viewed the same fact slightly differently:

Why do the American sedans have such poor fuel economy? They are only on par with SUVs. Most Asian sedans get significantly (10mpg+) better mileage. Why would I get a small car with the efficiency off a big car?

  Why do the American sedans have such poor fuel economy?

Do they? I just had a Chevy Malibu for a rental car, and it got over 30mpg at an average of 85MPH, including climbing the Grapevine both ways. The real-time display indicated as much as 40mpg at 60mph on level ground.

I believe that a lot of foreign sedans get closer to 45mpg these days. Could be wrong on that, but that's what I remember seeing when looking through one of those Car review magazines a month or so back.

Personally, I was looking for something closer to 2010 model year. My mom has a Chevy Impala about that age and it gets around 25mpg in my experience. Maybe close to 30 in ideal conditions.

> Why would I want to buy a sedan when I could buy a crossover SUV with the same fuel economy for the same price

Mainly for better handling. It's easier to avoid a crash if one can maintain control of their vehicle during emergency maneuvers. A vehicle with a higher center of gravity is harder to control in those situations. For example see the following "Moose Test" videos:

https://www.youtube.com/watch?v=B5aM30TFZ-w

https://www.youtube.com/watch?v=8B5MDI-tGFY

Great point... I drive a coupe and will get a roadster soon to replace it.

But I think most Americans ignore handling. They certainly ignore drive feel. And we have huge roads here :D

Funny thing about SUVs. Everyone seems to universally hate them on the internet, but they make up for > 50% of all new car sales in the US. Even funnier to me is the folks that in one breath say they want the W126 manual wagon but then scoff at an SUV which is a STATION WAGON, slightly raised. Subaru has been killing it by marketing their SUVs as wagons or vice versa. I drive an SUV. Its a grand cherokee. Its the SRT model. Its my favorite car ever.

Those same people would have scoffed at station wagons in the 1960s and minivans in the 1980s.

People want a vehicle that's easier to enter/exit than a go-cart, a full height storage area and a second row of seats that folds down. It just so happens that we call those vehicles "crossovers", "SUVs" or "cars" depending on whether you're asking the sale department, the compliance department or the engineering department.

I helped not one, not two, but three friends with my Jeep (also grand Cherokee) last week. We had eght inches of snow and my Jeep could easily handle it so when their cars got stuck... mine was there. Living in rural Illinois it’s almost a must to have a truck or larger vehicle

Or, snow tires. Just about any car on real snow tires will outperform cross-overs on all-seasons.

My family has a minivan and a subcompact. Snow tires have made a huge difference on both cars -- night and day. I learned that www.tirerack.com (no affiliation) has a deal where they send you 4 snow tires, on cheap steel rims, mounted, balanced, and inflated.

It takes about 1/2 hour to swap them out. I mark the tires with chalk so I can get them back on in the correct place, while rotating them front to back as well. First time, I made my teenage kids do the job, so they could experience changing a wheel.

With a garage and an air wrench, changing 4 tires is a breeze. I hope you made them do at least 1 each with manual tools.

Yup. We used the lug wrench and jack that came with the van. Each kid did one wheel that way, because that's what they'd be up against if they're out on the road. Then I also had them use my little hydraulic floor jack, and a cheater on the wrench, and finally a torque wrench. I don't have an extensive tool set, just because we live in a fairly small house and are trying to economize somewhat.

They've gotten pretty handy with tools. We're all into cycling, and messing around with old bikes.

I totally agree generally, in this case it was mostly cars with lower clearance getting stuck.

That sounds like a pretty compelling reason for me to stay in Texas. :) I like snow and all, but dealing with that daily is not something I would enjoy. That said, a Grand Cherokee is a very capable vehicle properly equipped. Its not like you could stick a Subaru Outback in its place and the outcome is any better. You need snow tires and or chains and to pretty much stay home when the snow is that bad.

I don't get it. Having owned both SUVs, wagons, and hatchbacks, I'll take a wagon or hatchback every time. Better handling (usually), better fuel economy (usually), and easier to get into (SUVs are tall), and usually less expensive (because SUVs have higher margins). If I really needed a third row, I'd buy a minivan.

I live in a NYC suburb, and driving a sedan or wagon on the highway feels awkwardly low among all of the 18 wheelers and SUVs. I would only feel comfortable in a sedan if everyone else also converted to sedans.

Unless we are vastly different heights, an SUV is always much easier to get into. I had an Audi A4 prior to the Grand Cherokee, and nearing 40 years of age, I grew tired of the "fall in/climb out" ingress/egress of a sedan that is low to the ground. Im 6'2", and my Grand Cherokee (which sits about and 1.5" lower than the other models) is pretty much perfect sit height. I don't need a third row, and the grand cherokee is not 3 row, you have to get the Dodge Durango for that extra row. I love wagons and hatchbacks and SUVs. They are variations of the same flavor. That was the point I was driving at. A wagon is the same shape as an SUV. The spaciousness of a wagon is practical. An SUV sits higher and is easier for some to get in and out. I don't see why there is any distinction made. I would not correct anyone who called my Grand Cherokee a "wagon". Remember the original Grand WAGONeer?

You're 7 inches taller than me, which I'm sure makes a difference!

Yeah, it really depends on the SUV. The big Lexus/Land Cruiser is tall like a truck. The mid-size RX is, like you said, effectively a tall wagon. Same for the Tahoe vs whatever GMC calls their mid-size these days.

And, yeah, the wife's little BMW is low and if I've had a few hard workouts (and the resultant sore back/legs/etc), it's an effort to get in/out. Getting "old" sucks (turn 42 this weekend).

the type of person to complain about SUVs online are mostly young urban residents who don't have kids and probably have access to public transport. Not exactly representative of the world at large

The world at large doesn't drive SUVs. People in France don't complain about F150s and SUVs because they don't exist at nearly the frequency. They get by with twingos, why can't suburban California? Even the farms only rarely have trucks and even then they're taco sized, not F-series.

Don't conflate an SUV with a full sized truck. An SUV can be the same size as a Ford Fiesta or as large as a school bus. I would argue that most of the US is buying small to midsize SUVs and not the full size suburban/expedition that people seem to equate with over consumption. And while the 1,2, and 3 selling vehicle[1] is the Ford, GM, FCA trucks, the bulk of the top 25 top sellers in the US are not very big:

https://www.caranddriver.com/news/g25558401/best-selling-car...

Funny thing is so many liberals that say they care about the environment are buying them...

Suv sales are going up. It's just people don't like sedans. I think title is a little misleading.

I've read somewhere that SUV attracted people because they were in an easier emission category, which meant they appear cheaper for the size.

Sedans are also less desirable as more and more people drive SUVs -- it makes it hard to see traffic and it's more dangerous when you are the lowest person on the road.

Nah, low center of gravity with nimble handling is better. I'll take an all wheel drive S4, ATS, C class or 3 series over an SUV any snowy day. Sport sedans have swagger too, the only swaggerific SUVs are the Escalade, Cullinan, Urus, Porsche SUVs. But those are out of the price range most of humanity can afford to buy within. I have never had a problem seeing traffic.

> I'll take an all wheel drive S4, ATS, C class or 3 series over an SUV any snowy day

I hope you're putting on the correct type of tires for snowy days. A lot of those models come with summer/performance tires which are incompatible with snow. For my S4, I have a set of Bridgestone Blizzak snow tires that I use during the winter months.

I had an awd ats with blizzak all around. It handled the snow better than any suv I'd been in.

Driving absolutely is an arms race. I wonder what engineering would come up with if they started with a premise of 2 seats, back to front, centered, and with an eye towards safety against large vehicles.

Also parking spot...

So fun

That probably has something to do with automakers spending the past decade teaching us that we should like SUV's.

The word “car” is really fun. It can mean “sedan” or “personal passenger road vehicle” depending or what kind of point you want to make.

With gas under $2 a gallon, it's not surprising that SUVs are selling like hotcakes and sedans are barely moving.

Bump gasoline up a dollar or two, then SUVs and trucks will slow down.

Cars are also better these days, lasting longer. I've got a 10 year old car (had it for a year), it's been rock-solid reliable. I think good used cars are a compelling alternative to a new vehicle.

>Bump gasoline up a dollar or two, then SUVs and trucks will slow down.

That was true in 2003, but I don't think it is anymore. The MPG penalty for a crossover compared to a sedan is only about 15% now which is probably worth it for most Americans.

Looking at the graph in the article, it seems that the total number of vehicles across sedans, suvs, and pickup trucks has actually increased.

Given that the demand for vehicles is actually increased, the automobile manufacturers don't have too many plants overall, they just don't have the right mix of plants.

My Mazda 3 hatchback manual gets 39MPG. I’m 6’2” and have 3 kids. Probably the best car I’ve ever owned. shrug

ICE sedan sales may be falling, but the Tesla Model S and Model 3 are selling just great.

#thanksobama for throwing taxpayer money at GM, only to have them do their inevitable restructuring a few years later than otherwise.

Yeah, its not like the sitting president introduced 25% steel tariffs and 10% aluminum tariffs or anything.

Yep, tariffs are probably a bad idea. Obama did those too (his economic ignorance knew no bounds). Two wrongs don't make a right.

The "GM" that got the money was already restructured, it is "new GM", the shareholders in old GM were wiped right out.

https://en.wikipedia.org/wiki/Motors_Liquidation_Company

Propping up GM legitimately helped hundreds of thousands of workers. Whether it was a good use of the money is a different question than that, but the money didn't go to shareholders, it went to keeping the operations going.

It's impossible to tell exactly what would have happened in a bankruptcy, but the entire company would have almost certainly been restructured, which would have meant generally clearing out the dead wood: shuttering factories, renegotiating anachronistic/extravagant union contracts, etc.

Coercing private citizens to pay for mismanaged companies and subsidize the gold-plated pension benefits of Baby Boomer employees is utterly immoral.

If you click the link I gave up there, you'll see that it was reorganized in a bankruptcy.

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