Posted on 08/07/2008 4:49:20 AM PDT by shrinkermd
Should Detroit have seen this disaster coming? Yes. Gasoline prices have been climbing steadily for more than three years now. The Bush-Bernanke debasement of the dollar didn't do Detroit any favors, because the dollar's collapse has contributed mightily to the soaring price of crude oil.
But the Detroit Three stuck with a business model based on leasing SUVs for way too long. The two things wrong with that model were, well, leasing and SUVs.
The residual values on which SUV lease payments are based turned out to be enormously inflated. With gas around $4 a gallon, the auto makers can't resell leased SUVs, after they are returned by customers, for anywhere near the price that the companies had assumed. Big write-downs to reflect this "impairment" contributed to the recent multibillion-dollar quarterly losses at Ford and GM, prompting the Detroit Three to curtail or cease their leasing programs. Japanese and European car companies are suffering leasing losses too, but they are much less dependent on SUV leases than Detroit.
All this said, let's acknowledge that it's human nature to resist changing behavior that has been successful, as SUVs were for two decades. If Detroit is Exhibit A, then Exhibit B surely must be the newspaper and magazine industry. It has been equally clear for most of this decade that the business models of print publications, which are based on selling advertising, were becoming as obsolete as big SUVs, because advertising is shifting to the Internet.
(Excerpt) Read more at online.wsj.com ...
I bought a Civic. Good fuel economy, and an ideal size for me. Most of the time anyway - right now, I'm waiting to get into my apartment this weekend so it is jammed full of stuff.
I don't get this idea that it is a virtue to use more gas than you need. If you aren't carrying more than 4 passengers, an SUV is really quite wasteful. The government shouldn't prevent you from buying it, but they certainly shouldn't encourage or subsidize it.
Did the foreign auto makers have higher mileage autos because they better forecasted the direction of oil? I don’t think so.
Toyota didn't. Honda did. Their Civics (hybrids and otherwise) are selling like hotcakes.
Then again, I'm a little biased. A brand-new Civic has been the car I wanted since high school.
We could all live in tents, too, but I don't really like it. (although I've done my share of it...:>)
Pray things are going well with you.
I turned down a Honda Pilot a few weeks back because of the price....30+ grand. Went with a used Suv instead at slightly over just a third of the cost. They're cheap like candy right now. Twenty thousand bucks will buy a lot of gas. 30 grand is enough in our area to buy small starter house to use as a rental.
No it isn’t. Their CUVs are probably among their best sellers right now.
Americans love large cars. Americans love high mileage.
Make a large car that gets high mileage and you’ll get rich.
Check out the Enclave/Acadia/Outlook by GM. Really nice large car with over 20+ mpg.
The new Mazda "wagon" is the Mazda5. I use "wagon" in quotes because it resembles a minivan (but smaller) more than a station wagon.
Buy a station wagon, minivan, or full-size van?
(rolls eyes)
Correctamundo! Only an industry so insulated could have come up with "planned obsolescence" in which they purposely designed autos to quickly wear out. I pity the affected workers and their families, but not the UAW and Big Three Management or Companies.
My 240 HP V6 VTech Honda Accord probably gets about the same gas mileage as your 4Cyl Civic. Great Gas mileage and more power than my old 57 Plymouth Fury.
LOL. That is certainly true.
Me, I was in the position of a worthless 2000 Malibu dying at a point when I had to drive from Georgia to Texas within a few weeks. At that point, a new car was essentially unavoidable - so I might as well get the most efficient vehicle I could afford.
It would seem to me the solution is to purchase the SUV after the lease, the last available lease,expires.
This is no doubt designed to optimize fuel economy. The EPA estimates a front-drive Enclave will return 16 mpg city and 24 mpg highway. According to the vehicle's trip computer, our example averaged 16 mpg in mixed driving.
A pig-mobile. At 2 1/2 tons it's efficient but still a pig-mobile
I have sworn off American manufacturers' vehicles for the last twenty years, and I have never regretted the decision. The Asian manufacturers have not expressed the same sort of contempt for me as a consumer, and will have my loyalty for the rest of my motor vehicle buying days.
Much truth to what you say.
I am interested in the BMW diesel, which I have heard gets about 40mpg and will throw you back in the seat when you romp down on the accelerator....
I agree that Toyota screwed up forecasting the price of oil as well. Kudos to Honda for being the only company not to jump whole-hog into massive trucks. However, they’ve made their share of mistakes as well. The “remarkably fuel efficient Honda Pilot”? The thing gets worse fuel economy than the slightly larger Ford Flex.
The Civic? Great looking vehicle, but the Civic at 31.3 / 34 mpg (auto/manual based on owner reports at fueleconomy.gov) doesn’t get any better mileage than a Focus at 32.5/33.5. And the Civic is slightly smaller (1.7 cu feet less) and considerably more expensive....
Oh, and then there is the ever-growing Accord. Frankly, that trend bugs me. We used to get our family of 4 into a 1987 Camry for trips. Now the Corolla is as big as that Camry was.
All manufacturers have made mistakes. Honda clearly has been the best prepared, IMO. Not because their products were vastly superior to the competition - but because they didn’t jump at huge vehicles to the same extent, and because their factories have been flexible enough to allow for quicker production shifts. You just don’t see the same speed of shift at Ford, GM, Chrysler, Toyota, or Nissan. They’re all in the 2010 timeframe before production shifts are complete....
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