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Originally Posted by CarlosTheGaucho
I totally believe so, the question of high profit margins never came to my mind, while cars in US (esp. US, Japanese cars) are usually much cheaper than here in Europe.
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I don't remember the exact numbers but I saw a while back the amount of profit that the auto makers get from an SUV was about five times that of a smaller car so it is no wonder they wanted to figure out how to sell a ton of them.
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Exactly, well I still can't get used to the fact that ANY US car should be small / economic, I actually love US cars, the more valve and more horsepower the better, but the affordability factor is kicking in.
How should their portfolio look like?
For example:
30 pct. big ass cars / trucks / sports cars / limousines
40 pct. middle / working class cars
30 pct. economic cars?
Can those economic cars be produced in cooperation with other producers (say from Europe) that have (even too much) know how with this?
How about those electro cars, is it really a wise bet?
Would anyone in your neighbourhood ever consider buying an electro car?
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I live in a very liberal/enviro conscious city so I know electric cars will sell here, but I'm not sure about nationwide. I personally think if they make an electric or hybrid style car that has a good range, decent power and looks nice they will sell them. They just have to convince the public that the range is not big deal. I talk to friends who will see that the range on an electric car is 200 miles and will say, "That isn't enough. I can't take it anywhere." I then ask, "How often do you drive more than 200 miles in a day?" To which they respond, "A couple of times a year." So I ask, "So you refuse to consider the car be it will only work perfect for you for 363 days a year, not 365? You can rent a car or own a second car that you take on those long trips."
What people don't get is that the electric car isn't meant as the be all end all. It is meant for people who commute every day and will own a second car that hauls the family and that they use on road trips. It is kind of like that little Smart Car. Same deal, if you commute it isn't a bad deal as a commuter car.
I think your market breakdown could be accurate, but maybe even less big cars. I remember back in the early and mid 80's when people bragged about how much gas mileage they got. Now it is just the opposite. Having a car that gets 9 miles to gallon is somehow cool now. Back when gas mileage was cool the US car makers had a good selection of small commuter cars and a nice selection of mid size cars that got pretty good mileage as well. They also had some big trucks and vans for those that wanted and could afford them. In addition they always had 1-2 sports cars. Now I drive by my local Ford dealer and it literally is about 70% trucks and SUVs and the rest is mid size cars. They might have a few smaller cars now than they did a year ago, but they are stuck with a huge inventory of $40K+ SUVs and trucks that they can't sell.
I think they got away from making cars that the average family could afford and find useful. It used to be that a middle class family had a commuter car and an mini van. They were both affordable and worked great. Then the SUV craze hit and they traded the mini van in for an SUV. They liked it so much they traded the commuter car in for a second SUV. A friend of mine (who has no kids) that was married did just that. He and his wife had a truck and commuter car. He has a take home car from work so he doesn't use his own car to commute, but she was going to school and drove about 30 miles one way to school 5-6 days a week. When they got her the SUV they were burning over $100 a week in gas. Before it was about $35-$40 a week. About 3 months into owning it gas shot up to $4.50 a gallon and they were going broke just paying for her gas. They ended up trading it back in for a smaller car again and taking a huge payment on the smaller car because they were upside down in the loan, but couldn't afford the gas.
People need to realize that you don't need a gas hot SUV to be cool.
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I guess Volkswagen is about 20 pct. down or something, not a real difference in Europe, they're now subsiding, if you get rid of your old car and buy a new one.
Well I'm not a big fan of those super savy cars filled with electronics that's made in third world countries or Eastern Europe and where you can't replace a bulb without getting screwed by an "authorized" service provider.
I rather prefer older, reliable cars from one piece of metal - but that's what they're trying to avoid, they need to get people to buy new ones and bank on the service.
How is the used cars market these days?
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I like the older cars too. My friends joke that as I get older my cars get older. When I was 18 I bought a brand new car. Since then I have regressed. About 5 years ago I had a 84 Jeep and now I have two cars. I have a small 96 Ford Escort that I drive about 90% of the time (although it is now dented up because we had a bad snow storm and my carport collapsed in on the car. The damage totaled the car, but I bought it back in salvage.) It runs great, it just has a couple of dents in it. I also own a 1967 mustang that sits in storage and only gets driven some during the summer. There is nothing like rolling the windows down, cranking up the radio and hitting the open road behind the wheel of a classic American sports car.
I think our local used car markets are kind of dead right now too. I used to almost never see commercials for used car lots and used car companies on TV. Now there are a bunch of them promising all kinds of different finance offers. Maybe they are hurting or maybe they are just trying to get buyers in who want/need a new car, but don't have the money or credit to get a brand new car.