GM - had to do it

[AutobahnSHO]

Honestly, I think the minivan killed the car. Men have always had an affinity toward trucks and SUVs and they were willing to deal with them being rough around the edges. Women typically preferred cars. When women with children started driving minivans they enjoyed the car-like ride while having more room and a higher seating position. As their children moved on, a lot of these women chose to move into midsize SUVs that offered them what they enjoyed about the minivan while being a little more trendy and palatable to their significant others.

My own wife has suggested that she may want an SUV when we no longer need our minivan because she enjoys the higher seating position.

Could be. I have suggested to wife replacing minivan with CR-V.

For some crazy reason when I drive Impreza my lower back starts hurting again. (herniated disc was diagnosis late 2017.) I never liked the seating position in that car though, it's like the front of the seat cushion is really high pushing you way back into the bottom back of the seat cushion.

[r0tor]

Did they brainwash you into your JGC?

Lot of Giulia commercials too. Were you brainwashed into that as well?

Really no legit reasons anyone might want a crossover over a sedan?

Either this country is spending a trillion dollars a year on advertising because it works... or they just need an excuse to spend money


Is it really so hard to imagine a world where automakers decided to start advertising not what was selling, but what makes them the most money... and consumers flocking to the vehicles they are being continually exposed to?

[12,000 RPM]

Either this country is spending a trillion dollars a year on advertising because it works... or they just need an excuse to spend money


Is it really so hard to imagine a world where automakers decided to start advertising not what was selling, but what makes them the most money... and consumers flocking to the vehicles they are being continually exposed to?

Light trucks are selling though; did you misread the chart?

Plus there are plenty of examples of things that were marketed that didn't sell. Remember all the cringey "Real People" GM ads? The even cringier Cadillac ATS ads talking about their "Brembo brakes"? Those ads were ubiquitous and yet all those cars still tanked in sales.......

So maybe..........................

Just maybe.............................

People are buying light trucks over cars...........................

Because they prefer light trucks over cars?

[Eye of the Tiger]

But watch gas prices spoke and people go nuts trying to buy up little cars.

If this is really happening, then I should sell Fiesta right quick.

[Xer0]

"The death of the car" looks to be an entirely American thing.  FCA started it with the 200 and Dart almost two years ago, Ford followed suit earlier this year, and now GM is right in line.  But, until I see the Japanese and Koreans do the same, I think this is all premature nonsense.  Toyota has invested a TON of money into the new Camry/Corolla bringing them way up from the clutches of mediocrity, Nissan actually decided to put engineering dollars into the Altima for the first time in like 10 years, and Honda's Civic/Accord combo is world class.  A lot of these cars are being manufactured in the US too.  There has to be some random legacy cost being embedded into the American production to make the margins on cars just not work but on SUVs be acceptable.

[Submariner]

Light trucks are selling though; did you misread the chart?

Plus there are plenty of examples of things that were marketed that didn't sell. Remember all the cringey "Real People" GM ads? The even cringier Cadillac ATS ads talking about their "Brembo brakes"? Those ads were ubiquitous and yet all those cars still tanked in sales.......

So maybe..........................

Just maybe.............................

People are buying light trucks over cars...........................

Because they prefer light trucks over cars?

It's not like we don't have history to rely on either.  Remember the 90s SUV boom?

[MrH]

"The death of the car" looks to be an entirely American thing.  FCA started it with the 200 and Dart almost two years ago, Ford followed suit earlier this year, and now GM is right in line.  But, until I see the Japanese and Koreans do the same, I think this is all premature nonsense.  Toyota has invested a TON of money into the new Camry/Corolla bringing them way up from the clutches of mediocrity, Nissan actually decided to put engineering dollars into the Altima for the first time in like 10 years, and Honda's Civic/Accord combo is world class.  A lot of these cars are being manufactured in the US too.  There has to be some random legacy cost being embedded into the American production to make the margins on cars just not work but on SUVs be acceptable.

Toyota & Honda are just the best in the world at this game.  And the big three aren't as lean as the class leaders.  They can absorb this inefficiency on big margin trucks, but can't on mainstream sedans.

[Lebowski]

Toyota/Honda only make like low-mid single digit margins on cars, and are barely above breakeven to low single digits for small cars.  If Toyota makes a 3% margin on something you can bet it's tough to do profitably. The D3 aren't as efficient as Toyota and never will be.

[Xer0]

Toyota & Honda are just the best in the world at this game.  And the big three aren't as lean as the class leaders.  They can absorb this inefficiency on big margin trucks, but can't on mainstream sedans.

That's kinda my point; its not so much about the death of passenger car as it just another reminder that the American manufacturers are just not there yet.

[Lebowski]

That's kinda my point; its not so much about the death of passenger car as it just another reminder that the American manufacturers are just not there yet.

Toyota is a really really good company. If they barely make money in a segment a mediocre company doesn't stand a chance.

[shp4man]

Competition with Korean cars has to be factored in. Actual production costs of a Hyundai or a Kia is probably lower. 

[2o6]

GM didn't kill all their cars, just a few though.

[AutobahnSHO]

That's kinda my point; its not so much about the death of passenger car as it just another reminder that the American manufacturers are just not there yet. suck.

FTFY

[giant_mtb]

FTFY

Have you driven a new Impala?  A LaCrosse?  A Malibu? A Cruz?  Any of them?

[Xer0]

Have you driven a new Impala?  A LaCrosse?  A Malibu? A Cruz?  Any of them?

Seriously.  The American manufacturers make some world class products right now, but that is completely separate from the point that they can't do it profitably.

Toyota/Honda only make like low-mid single digit margins on cars, and are barely above breakeven to low single digits for small cars.  If Toyota makes a 3% margin on something you can bet it's tough to do profitably. The D3 aren't as efficient as Toyota and never will be.

I actually did some quick Googling on this cause I was curious.  Numbers are company wide so there's no distinction between classes, but GM and Honda hover at 7%, Toyota is almost at 8%, and Ford is a laggard at something like 4.5%.  Ferrari is almost at 20% lol.  Its MSN though so not sure where they are getting their data https://www.msn.com/en-in/autos/photos/the-20-most-profitable-car-manufacturers/ss-AAq36pf#image=14

Where are you finding more detailed breakdown on the small cars?  I'm be curious to see what that looks like.

[BimmerM3]

Have you driven a new Impala?  A LaCrosse?  A Malibu? A Cruz?  Any of them?

I think they're talking about efficiencies on the engineering and manufacturing side, not how good the vehicles themselves are.

[2o6]

Suzuki's profit margin is nearly 12% and they only make small cars.

[Lebowski]

Suzuki's profit margin is nearly 12% and they only make small cars.

The margin figures I was referring to may have been US only, most of Suzuki's op profit is from Asia and Japan segments, so not really a read through to the US sedan market. 

[Lebowski]

Seriously.  The American manufacturers make some world class products right now, but that is completely separate from the point that they can't do it profitably.

I actually did some quick Googling on this cause I was curious.  Numbers are company wide so there's no distinction between classes, but GM and Honda hover at 7%, Toyota is almost at 8%, and Ford is a laggard at something like 4.5%.  Ferrari is almost at 20% lol.  Its MSN though so not sure where they are getting their data https://www.msn.com/en-in/autos/photos/the-20-most-profitable-car-manufacturers/ss-AAq36pf#image=14

Where are you finding more detailed breakdown on the small cars?  I'm be curious to see what that looks like.

They don't report profitability by product or market segment (small, mid, suv etc) but sell side analysts will sometimes try and back it out.

Just broadly speaking, if total Toyota is 8% and just assume SUV's/trucks are say low dd - teens margins, that would imply cars are somewhere in low-mid single digits.  that's over simplified of course and not looking at regional segments, as I said above the numbers I referred to earlier were probably just US iirc.

[12,000 RPM]

Seriously.  The American manufacturers make some world class products right now, but that is completely separate from the point that they can't do it profitably.

They've built up so much ill will with the crap they foisted on Americans for ~50 years that it's gonna take selling world class cars at a loss for that long to get back to zero. Probably easier to just get out of the car business period and either wait for people to forget, or continue to ride the light truck wave.

Spiking gas prices don't matter either as people were rushing back into trucks after the recession when gas was $4/gal, and everything is way more fuel efficient these days.

[FoMoJo]

They've built up so much ill will with the crap they foisted on Americans for ~50 years that it's gonna take selling world class cars at a loss for that long to get back to zero. Probably easier to just get out of the car business period and either wait for people to forget, or continue to ride the light truck wave.

Spiking gas prices don't matter either as people were rushing back into trucks after the recession when gas was $4/gal, and everything is way more fuel efficient these days.

They only built crap for 30 years, 70s through 90s.  Other than Chrysler, North American vehicles have been on par with the rest of the world, on a comparative level.

The difference is that a generation and a half or two have been inured in import vehicles'

[12,000 RPM]

They only built crap for 30 years, 70s through 90s.  Other than Chrysler, North American vehicles have been on par with the rest of the world, on a comparative level.

The difference is that a generation and a half or two have been inured in import vehicles'

I'd say they were building crap right up until the bailout. Obviously not across the board, but def mostly in the mainstream space. In 08 they were still selling the Cobalt for example.

[shp4man]

Build and design quality is about even across all brands these days, with a few exceptions.

[Lebowski]

Eh, even after the recently improved products their still not as nice as the imports imo. I'd take an accord over any domestic mainstream sedan I think.

[shp4man]

Eh, even after the recently improved products their still not as nice as the imports imo. I'd take an accord over any domestic mainstream sedan I think.

Hondas have their issues. Trust me on this one.

[FoMoJo]

I'd say they were building crap right up until the bailout. Obviously not across the board, but def mostly in the mainstream space. In 08 they were still selling the Cobalt for example.

Yes, there were a few holdovers.  GM, especially, was far too concerned about their bottom line and let product suffer.  They were in the process of turning it around in the late 90s.  Too little, too late, so it seemed.

[shp4man]

I think many problems and recalls with late model vehicles is partially due to the way cars are designed. Unfortunately, computers aren't programmed to model some fairly significant real world factors. Thus, the onslaught of recalls we see these days.
This goes for all the manufacturers. Do they all use the same software? Don't know.

[giant_mtb]

Eh, even after the recently improved products their still not as nice as the imports imo. I'd take an accord over any domestic mainstream sedan I think.

I would, too, but the domestics are still quite competent.

[Soup DeVille]

I think many problems and recalls with late model vehicles is partially due to the way cars are designed. Unfortunately, computers aren't programmed to model some fairly significant real world factors. Thus, the onslaught of recalls we see these days.
This goes for all the manufacturers. Do they all use the same software? Don't know.

No. Many of them are proprietary.

[veeman]

If you're not a domestic fanboy, and are deciding on a fuel efficient good value mainsteamer sedan, it's hard to choose a GM/Ford/FCA over a Japanese or Korean car without a bunch of cash on the hood or 0% financing incentive.  Toyota and Honda tend to be more reliable over the long haul and have been for decades. That makes their value when it comes time to sell or trade in your car much higher and also consequently they can be leased significantly cheaper.  A dealer is going to put an older GM or Ford with high mileage straight to auction.  They can sell for a hefty profit an older Camcord with high mileage because they got a long track record of exemplary build quality and will sell. The Koreans have had for decades that long warranty ace in their pocket that GM and Ford can't match.

It's also hard to be a domestic fanboy when some of GM/Ford is built outside the U.S. and foreign makes build a lot in the U.S. 

SUVs don't seem to be as much of a straight value purchase.  No one buys an overpriced Tahoe because it's a good value.  And GM and Ford have invested a lot in their SUVs.