“The Detroit Three spent years training their customers not to buy vehicles without a subsidy \u00e2\u20ac\u201c usually in the form of 2-per-cent or zero-per-cent loans. They also taught them not to bother saving for one, because no down payment was required. (Your columnist, when buying a Pontiac Vibe five years ago, was practically admonished by the salesman for putting $2,000 toward the purchase. Didn’t I have a better use for the money, he wanted to know?)”<\/p><\/blockquote>\n
So with the days of a zero-down lease\/financing over with, it’s going to take time for new car sales to come back because people are going to need a few years to start saving up for those down payments again. On top of that, the Detroit 3 have been existing in this perverse parallel economic universe for some time now: their quality has been coming up, but mostly when measured by short-term surveys, “initial quality”, etc. The perception that their quality, especially the long-term reliability, is still low, and so for the most part they compete based on price. However, they don’t have the advantage in terms of margin AFAIK: their labour costs are higher, their “legacy” costs are higher, and for GM in particular, they have a lot of duplication selling the same crap in a ton of very slightly different trims under different badges. That’s a bad position to be in, and I’m actually amazed it lasted for as long as it did. Now with people suddenly interested in keeping their cars longer, and needing more predictability in costs (they can’t tap their HELOC for a costly surprise repair) long-term quality is going to play even more of a factor.<\/p>\n
This is again a spot where they have perhaps shot themselves in the foot when it comes to their hybrid programs. The Honda system is simple: the belt-and-cone CVT may be fragile (we’ll need some time to see if that’s really the case), but the hybrid implementation is very simple, and will actually work on engine power alone even if the motor\/battery dies (though the engine is perhaps more likely to die than the motor — and given that we’re talking about a Honda engine, that’s not likely). The Toyota\/Ford system has been poo-pooed all over for requiring the battery to work to run, but beyond that it’s actually a pretty elegant transmission system that should be quite durable. The only issue I’ve heard with it is that it might not have sufficient cooling, which might be one reason why you’re not supposed to tow with a Prius (note that you can tow with a HiHi or FEH). The system GM developed, it’s “two mode transmission” is like two GM transmissions frankensteined together, with four clutches throughout (I am lead to believe that the clutch is a common point of failure in GM transmissions). It’s a system designed primarily for large trucks (the Tahoe hybrid and Escalade hybrid), which indicates that clearly GM was hoping to continue marketing large trucks based on <5 years of ownership even in a future where a hybrid system was deemed necessary. At the same time, GM and Ford stopped making minivans, so if\/when those soccer moms who “need” 3rd row seating want something that sucks a little less fuel, they’ll go to the competition for a minivan.<\/p>\n
I’m pretty sure that just because of how many people are employed by the automakers and their sub-industries that they’ll get a bailout from governments — the American government if not ours — but I hope that they actually manage to change into companies that can compete in a world of high gas prices and tight credit. I hope it’s not just going to be used to supply their burn rate for another 6 months or a year when they’ll be back in the same position. I also hope that Toyota and Honda — who are equally foreign automakers in Canada and who also employ a lot of Canadians — don’t get completely screwed by the bailouts.<\/p>\n","protected":false},"excerpt":{"rendered":"
When I first “made up my mind” to buy a Prius (in quotation marks because I obviously don’t have a Prius in my driveway now, so my mind couldn’t have been that made up), it was because my car had been stolen and even though it was recovered it wasn’t pleasant to drive anymore — […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts\/614"}],"collection":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=614"}],"version-history":[{"count":0,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts\/614\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=614"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=614"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=614"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}