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The End of the American Car?
https://www.ericpetersautos.com/2019/12/30/the-end-of-the-american-car/
By eric -December 30, 20193217
Next year may be your last chance to buy an American car.
Not the brand. The type.
Arguably, there is only one company still selling American cars. Big, rear-wheel-drive cars with nothing smaller than a V6 under the hood – without a big price. Or at least a price that average Americans can still manage.
That company is – was – FiatChrysler. Which company just merged with a French car company, Peugot, that specializes in small-engined, small cars.
And electric cars.
Peugot just announced something foreboding, if you can read between the lines – and if you are a Deplorable who esteems big, big-engined non-electric American cars like the Chrysler 300, the Dodge Charger and Challenger.
These three (and they’re basically one – because they share a common platform) sell well even though they are old. In fact, they probably sell well because they are old. And are the apotheosis of what’s new . . . like the current crop of being forced-down-our-throats small-engined and electric cars that couldn’t do a burnout without the assistance of a JATO rocket.
The last major update of the 300/Charger/Challenger platform happened more than a decade ago, when it was still feasible to build American cars – and sell them to average Americans. Today, it is possible to build cars that are similar to American cars in layout – large, rear-drive and available with big engines. But they come with a luxury car badge.
And a big price – which most Americans can’t afford.
This price reflects the cost of low production/high margins – as opposed to mass production and low margins.
And the cost of compliance.
It is very difficult to build lots of big cars with big engines and sell them at modest prices to lots of people because of Uncle’s fuel-efficiency billy stick, which punishes any car company that dares to build big-engined big cars with “gas guzzler” taxes. These taxes are designed to make big cars with big engines harder to sell to lots of people, because most people haven’t got lots of money to spend on cars.
A luxury-car company like Mercedes can make a go of selling 800 or so S-Class sedans (on average) per month because MB can charge – and get – six figures (to start) for each S-Class.
Low production – high margin.
It doesn’t matter much whether the car costs $10k more – or less – as the people who buy S-Class Benzes don’t sweat such small (for them) sums.
But it’s a lot harder to make money on volume selling 300s and Chargers and Challengers when the compliance costs make such cars hard to sell to average Americans, for whom an extra $5,000 added to the MSRP is a financial bridge too far.
Mass production – low margins.
But without the mass, the margins evaporate. The car soon follows.
FiatChrysler also has to worry about the Affordability Effect on its other cars – which become harder to sell when their prices go up due to the shifting of the costs of compliance. FCA can keep the price of the 300/Charger/Challenger from rising to some degree by raising the price of its other models to some degree – to offset those costs of compliance.
But even that can only go on for so long.
Uncle is ratcheting up the costs of complying. If the Orange Man doesn’t prevent it, cars that don’t average close to 50 MPG just five years from now will cost much more to buy than they do now – when they only have to average about 36 MPG before the “gas guzzler” fines kick them in the soft spots.
And cars like the 300/Charger/Challenger can never comply with regs demanding “zero emissions” (defined as zero “carbon” emissions – from the tailpipe) regardless of the cost. Not without becoming something very different.
Which probably explains why these American cars are going away – or so it looks like.
The French company that now controls the last car company still selling these American cars announced last week that two-thirds of all the cars its will make in the future will be built off of just two platforms – neither of these being suitable for building American cars.
The first platform – EMP2 – will be for compact/mid-sized cars; it is already being used for European Peugot models like the 3008 (a compact-sized crossover), the Citroen C5 (Citroen is also part of the Peugot conglomerate) and the Opel (ex-GM brand) Grandland.
The second – CMP – for compact/subcompact cars, is used for the underthings of models like the DS3 (a Mini Cooper-like model) and Opel Corsa.
None of these models comes with a big engine.
All of them are also front-wheel-drive.
No mention was made about the future of full-sized, rear-drive cars like the 300/Charger and Challenger. Which strongly suggests there is no future for them, beyond the selling of the current iterations however much longer Uncle allows it.
PSA – the new combine which subsumes Fiat and Chrysler under the Peugot brand – says it “doesn’t anticipate” closing the plants where the last American cars are still being built for now – but did say that it will be “up for discussion” sometime next year.
One can imagine what is being discussed right now.
Barring some kind of miracle – which may happen if the Orange Man manages to beat off the people doing their utmost to get rid of him and the American car – the regulatory apparat will make it economically and (if that doesn’t do the trick) legally impossible to sell cars like the 300/Charger/Challenger by 2030 – the date set forth by Greta, et al for the culmination of the “climate crisis.” Long before we get there, America will likely have gone Europe and established IC engine No Go zones, or applied punishing “polluter pays” taxes/registration fees.
Given this prospect, it would be ruinous to invest money in a rear-drive/big engined new platform for a new 300/Charger/Challenger, which would never be recovered. Would you buy a house that you knew going in would almost certainly be ordered torn down decades before you finished paying the mortgage off?
You’d have to be stupid – and PSA isn’t.
Gather ye big-engined American cars, while ye may.
https://www.ericpetersautos.com/2019/12/30/the-end-of-the-american-car/
By eric -December 30, 20193217
Next year may be your last chance to buy an American car.
Not the brand. The type.
Arguably, there is only one company still selling American cars. Big, rear-wheel-drive cars with nothing smaller than a V6 under the hood – without a big price. Or at least a price that average Americans can still manage.
That company is – was – FiatChrysler. Which company just merged with a French car company, Peugot, that specializes in small-engined, small cars.
And electric cars.
Peugot just announced something foreboding, if you can read between the lines – and if you are a Deplorable who esteems big, big-engined non-electric American cars like the Chrysler 300, the Dodge Charger and Challenger.
These three (and they’re basically one – because they share a common platform) sell well even though they are old. In fact, they probably sell well because they are old. And are the apotheosis of what’s new . . . like the current crop of being forced-down-our-throats small-engined and electric cars that couldn’t do a burnout without the assistance of a JATO rocket.
The last major update of the 300/Charger/Challenger platform happened more than a decade ago, when it was still feasible to build American cars – and sell them to average Americans. Today, it is possible to build cars that are similar to American cars in layout – large, rear-drive and available with big engines. But they come with a luxury car badge.
And a big price – which most Americans can’t afford.
This price reflects the cost of low production/high margins – as opposed to mass production and low margins.
And the cost of compliance.
It is very difficult to build lots of big cars with big engines and sell them at modest prices to lots of people because of Uncle’s fuel-efficiency billy stick, which punishes any car company that dares to build big-engined big cars with “gas guzzler” taxes. These taxes are designed to make big cars with big engines harder to sell to lots of people, because most people haven’t got lots of money to spend on cars.
A luxury-car company like Mercedes can make a go of selling 800 or so S-Class sedans (on average) per month because MB can charge – and get – six figures (to start) for each S-Class.
Low production – high margin.
It doesn’t matter much whether the car costs $10k more – or less – as the people who buy S-Class Benzes don’t sweat such small (for them) sums.
But it’s a lot harder to make money on volume selling 300s and Chargers and Challengers when the compliance costs make such cars hard to sell to average Americans, for whom an extra $5,000 added to the MSRP is a financial bridge too far.
Mass production – low margins.
But without the mass, the margins evaporate. The car soon follows.
FiatChrysler also has to worry about the Affordability Effect on its other cars – which become harder to sell when their prices go up due to the shifting of the costs of compliance. FCA can keep the price of the 300/Charger/Challenger from rising to some degree by raising the price of its other models to some degree – to offset those costs of compliance.
But even that can only go on for so long.
Uncle is ratcheting up the costs of complying. If the Orange Man doesn’t prevent it, cars that don’t average close to 50 MPG just five years from now will cost much more to buy than they do now – when they only have to average about 36 MPG before the “gas guzzler” fines kick them in the soft spots.
And cars like the 300/Charger/Challenger can never comply with regs demanding “zero emissions” (defined as zero “carbon” emissions – from the tailpipe) regardless of the cost. Not without becoming something very different.
Which probably explains why these American cars are going away – or so it looks like.
The French company that now controls the last car company still selling these American cars announced last week that two-thirds of all the cars its will make in the future will be built off of just two platforms – neither of these being suitable for building American cars.
The first platform – EMP2 – will be for compact/mid-sized cars; it is already being used for European Peugot models like the 3008 (a compact-sized crossover), the Citroen C5 (Citroen is also part of the Peugot conglomerate) and the Opel (ex-GM brand) Grandland.
The second – CMP – for compact/subcompact cars, is used for the underthings of models like the DS3 (a Mini Cooper-like model) and Opel Corsa.
None of these models comes with a big engine.
All of them are also front-wheel-drive.
No mention was made about the future of full-sized, rear-drive cars like the 300/Charger and Challenger. Which strongly suggests there is no future for them, beyond the selling of the current iterations however much longer Uncle allows it.
PSA – the new combine which subsumes Fiat and Chrysler under the Peugot brand – says it “doesn’t anticipate” closing the plants where the last American cars are still being built for now – but did say that it will be “up for discussion” sometime next year.
One can imagine what is being discussed right now.
Barring some kind of miracle – which may happen if the Orange Man manages to beat off the people doing their utmost to get rid of him and the American car – the regulatory apparat will make it economically and (if that doesn’t do the trick) legally impossible to sell cars like the 300/Charger/Challenger by 2030 – the date set forth by Greta, et al for the culmination of the “climate crisis.” Long before we get there, America will likely have gone Europe and established IC engine No Go zones, or applied punishing “polluter pays” taxes/registration fees.
Given this prospect, it would be ruinous to invest money in a rear-drive/big engined new platform for a new 300/Charger/Challenger, which would never be recovered. Would you buy a house that you knew going in would almost certainly be ordered torn down decades before you finished paying the mortgage off?
You’d have to be stupid – and PSA isn’t.
Gather ye big-engined American cars, while ye may.
