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Are we heading for another depression?

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  • It was high gas prices and not a lack of consumer desire that hobbled SUV sales this year.
    That's true. However, the problem is that there is no way gas prices will stay at this level. As soon as the economy starts to rebound, and possibly before, the prices will come back up. If not then, then when we start to run into a shortage. This price drop may be one of the worst things possible for the future of the automotive industry if they don't change their direction. If they go right back to the same things they were doing before, they will be fucked when prices start to rise again. What they SHOULD be doing is investing in "green" innovations right now. Use the money from the stupid-people-SUV-sales right now to develop the technology that will save their asses when gas becomes too expensive to afford again.
    The problem will always be Greed. The margin on a compact car is much smaller then that of a SUV, so naturally the auto industry will lean towards SUV's because that is where they make the most money. That changed for a while while gas prices were low but you can bet that people will lean back to buying SUV's stupidly because of the low gas prices on top of the good deals you can get SUV's right now. This is also caused by the additional cost in buying a hybrid at the moment as well as the auto industry tries it's darndest to make a profit on the one sector that is making them some money. However in the end a Hybrid doesn't make them a great margin unless they jack up the price which makes people wonder if they will spend 10,000 or 20,000 more dollars in gas to make up for the additional cost. The consumer has a short memory and it's not to the car companies benefit to remind them not to buy SUV's.
  • The problem will always be Greed. The margin on a compact car is much smaller then that of a SUV, so naturally the auto industry will lean towards SUV's because that is where they make the most money.
    I feel the need to quote this because I don't think people really understand how much they actually make on SUVs. We're talking huge margins here. "Auto industry analysts estimate that the profitmargins on SUVs can range from $10,000 to $17,000 per vehicle." (source) Consider that they list these vehicles at around $30K-40K and you're talking 25%-30% profit margin. That is massive! A typical car is around 10% area from what I can quickly google. There was absolutely nothing wrong with selling SUVs, it's the law of supply at it's finest. You make the most of what you make the most money on if there is demand. The problem here is that market conditions changed almost literally overnight. It takes too long to design small cars that Americans suddenly wanted and it's hard to retool their assembly lines quickly to meet demand.
  • ...which is why they shouldn't STOP selling the SUVs that people are currently buying, but they should take that overnight market change as a warning and INVEST that profit from the SUVs into changing the lines while they can afford it. Otherwise, when the same thing happens again they will be caught in the same situation. If they're not going to invest their own money in the future of their company when they have the chance to do it, then why should the government give them more money to waste?
  • The question you have to ask is why there is a huge demand for SUVs. It's not because people want them. People don't want things. They are told what to want. The US auto industry marketing has made people want SUVs. Despite what's going on, there are still plenty of car commercials everywhere. If they would just turn that marketing machine around at some other type of vehicle, demand would shift accordingly. People want what they are told to want.
  • The question you have to ask is why there is a huge demand for SUVs. It's not because people want them. People don't want things. They are told what to want. The US auto industry marketing has made people want SUVs. Despite what's going on, there are still plenty of car commercials everywhere. If they would just turn that marketing machine around at some other type of vehicle, demand would shift accordingly. People want what they are told to want.
    I disagree. There is a long running motto in the American car industry that anything that sells well, will sell even better just a little bit bigger. SUVs are the ultimate culmination of this theory. Marketing aside, American's like big things. Everything from our houses, TVs, cars, our portions, and even our video game consoles (I'm looking at you, original Xbox.) We don't buy the biggest thing to fit our needs, we buy the biggest thing our budget will allow.
  • SUVs were marketed as "cool" family vehicles. They became popular because families wanted space, but a lot of people saw minivans as "uncool". Thus, the rugged (unsafe and less efficient) SUV became popular with family men and "hip" soccer moms. It was image over substance.
  • SUVs were marketed as "cool" family vehicles. They became popular because families wanted space, but a lot of people saw minivans as "uncool". Thus, the rugged (unsafe and less efficient) SUV became popular with family men and "hip" soccer moms. It was image over substance.
    QFT

    The "Weekend Warrior" mentality that persists in suburbia is responsible for a lot of this. People want to feel as though they have the ability to be "rugged" and still return to their comfortable suburban life.

    It should be noted that many modern SUV's fail horribly at off-roading. They're not actually designed to be rugged, they're just designed to look rugged.
  • The question you have to ask is why there is a huge demand for SUVs. It's not because people want them. People don't want things. They are told what to want. The US auto industry marketing has made people want SUVs. Despite what's going on, there are still plenty of car commercials everywhere. If they would just turn that marketing machine around at some other type of vehicle, demand would shift accordingly. People want what they are told to want.
    I disagree. There is a long running motto in the American car industry that anything that sells well, will sell even better just a little bit bigger. SUVs are the ultimate culmination of this theory. Marketing aside, American's like big things. Everything from our houses, TVs, cars, our portions, and even our video game consoles (I'm looking at you, original Xbox.) We don't buy the biggest thing to fit our needs, we buy the biggest thing our budget will allow.
    I think it is a primal urge. Originally the biggest person survived. In Roman times, the fattest were the wealthiest. In the modern times, SUVs show our "doing well" to society.
  • As long as people want SUVs the automakers will continue to make them. You can't simply say, "the people want cheap high MPG cars" and expect the automakers to change when the SUV line remains their most profitable.
  • edited December 2008
    As long as people want SUVs the automakers will continue to make them. You can't simply say, "the people want cheap high MPG cars" and expect the automakers to change when the SUV line remains their most profitable.
    You're not getting the point. The automakers manufacture the demand for SUVs through advertising. As Scott said, the demand wouldn't be there but for the advertising. If they stopped advertising those cars so aggressively, demand would dwindle. If they came up with a good ad campaign for compact cars, demand for those cars would increase and they'd sell more compact cars. The problem is that they don't want to do that. Like most businesses, they want to maximize their profit in the short term with little or no thought for the future.
    Post edited by HungryJoe on
  • Big three Vs. Toyota and Honda

    Looks like the big three are just losing to the much leaner and meaner Japanese.
  • Ohmanz, yesterday I had this huge post about why SUVs are better than minivans in a lot of ways, but apparently I only hit the preview button and not the actual post button. Ah well, it is now lost to the oblivion of the internets.

    Suffice to say that there are people who buy SUVs for other reasons than looking "cool and rugged." In my experience coming from a family with 6 kids, SUVs hold up to typical kid-abuse better than minivans in general.

    The other point I was trying to make is that sure, right now people want SUVs. They SAW how quickly that changed. That was a warning shot. People are buying again because gas prices went down, but for how long? If they had any sense, they would invest the profit from those SUVs they are now selling into diversifying for the future. Right now the car companies are like our specially bred banana plants. They only have two or three varieties. When a big change comes along that those varieties can't handle, they are wiped out because there isn't enough genetic (or product) diversity to provide genes (or products) that are resistant to that change. The car companies need some more alleles!
  • As long as people want SUVs the automakers will continue to make them. You can't simply say, "the people want cheap high MPG cars" and expect the automakers to change when the SUV line remains their most profitable.
    You're not getting the point. The automakersmanufacturethe demand for SUVs through advertising. As Scott said, the demand wouldn't be there but for the advertising. If they stopped advertising those cars so aggressively, demand would dwindle. If they came up with a good ad campaign for compact cars, demand for those cars would increase and they'd sell more compact cars. The problem is that they don't want to do that. Like most businesses, they want to maximize their profit in the short term with little or no thought for the future.
    I get the point perfectly and the same holds true for expensive "green" cars. The same type of person who falls for the advertising when buying an SUV is also susceptible to buying a Green car because of advertising.

    Look at the Tesla Roadster. It is an awesome looking car but it has a paltry 200 mile range. Why would anyone buy that car for any reason other than as a status symbol? The Prius is a crappy looking car but people buy it because it is "green", same goes for those tiny Smart Cars.

    I would never buy a Prius or Smart Car and will always have an SUV because of where I live. Heavy snow is a reality for me several months out of the year. Because of my job I often have to go out in bad weather late at night to fix things. I can do this without fear because I know my car is safe in any weather and does not get stuck in the snow. I can not say the same for a small econo-box.

    PS: Do you feel the way about hybrid SUVs?

    Hybrid Sport Utility Vehicles MPG
  • I would never buy a Prius or Smart Car and will always have an SUV because of where I live. Heavy snow is a reality for me several months out of the year. Because of my job I often have to go out in bad weather late at night to fix things. I can do this without fear because I know my car is safe in any weather and does not get stuck in the snow. I can not say the same for a small econo-box.
    OMG, the advertising got to you!!!

    But seriously, I agree. There are people for whom this type of vehicle is necessary. The Hybrid SUV gets about the same gas mileage as my current car, so I wouldn't complain. I'm sure smart cars are great for city travel (an electric car would be great for my 15 minute daily commute), but they don't really cut it in wintry weather or for long-distance travel. Yet.
  • edited December 2008
    I would never buy a Prius or Smart Car and will always have an SUV because of where I live. Heavy snow is a reality for me several months out of the year. Because of my job I often have to go out in bad weather late at night to fix things. I can do this without fear because I know my car is safe in any weather and does not get stuck in the snow. I can not say the same for a small econo-box.
    There are people for whom a pickup truck is necessary, such as a contractor, or someone who lives on a farm. An SUV is necessary for almost nobody.

    Some SUVs are actually built like trucks, but have seats instead of beds. For example, the Ford Explorer. It's basically a Ford pickup truck, but with seats in the back. Who would need such a thing? A person who needs a truck doesn't need a whole bunch of seats. The only possible practical use of such a vehicle is if you want to haul something, but also want lots of passengers. For example, a family that owns a boat.

    Some SUVs are built like cars and minivans. Take for example the Mazda CX-7. It's basically a minivan with the RX-8 engine, and a boxier frame. In other words, it's a minivan that is called an SUV because of the shape of the body. It can't haul anything. It drives exactly like a minivan. The only difference is body styling, and an engine that's really great when it is in a vehicle that weighs less. This sort of vehicle is impractical for any possible purpose.

    As for your snow excuse. That's complete bullshit. Take for example my car. It's a 2006 Mazda 3 hatchback. A couple winters ago, it had some serious snow problems. For the most part it drove just fine in the snow. However, once it couldn't make it home because of a steep unplowed hill. Another time it couldn't get out of the driveway which was shoveled inadequately. The fact of the matter is that if roads are not plowed, or driveways are unshoveled, you shouldn't be driving on them. The exorbitant cost and stupidity of an SUV is not excused by the one or two times you may have to drive in unplowed conditions.

    Let's say, for instance, that you have to drive in unplowed conditions often. Maybe you live in the boonies where plows don't come. Even then, an SUV is stupid. Remember my car, which couldn't get up the hill or out of the driveway? I put some snow tires on it last winter. Guess what? It is now able of driving in the worst of snow. Multiple times in the parking lot at the train station I was completely snowed in by plows. My car easily escaped the parking spots with no shoveling or sanding whatsoever thanks to snow tires. My car isn't even 4 or all-wheel drive. If I had a Subaru or Volvo with all-wheel drive, I probably wouldn't even need snow tires. Having a monstrous SUV provides almost no advantage in snow versus a non-SUV. The only time the SUV would win out is if the snow is so high up that the car would crash into it, but the suv would drive through it. Most SUVs are maybe a foot higher up than normal cars. The circumstances in which the snow will be at the exact height where this is an issue are few and far between.

    Just to drive the point home further. Let's compare the snow performance of a 4x4 SUV to a Lotus Elise, a superlight sports car. If the car is stuck in deep snow, or needs to drive on unplowed roads, or uphill, then the SUV will be able to go where the Elise probably won't be able to go. If the Elise had snow tires, that would make up for much of that, but not completely because the car is so light. If the roads are covered in black ice, the Elise will be infinitely safer than then SUV. While the SUV has the power to get going in slippery conditions, it's power to stop is unchanged. Both cars have four anti-lock disc brakes. The difference in stopping power comes down entirely to the friction between the tires and the road. The greater weight of the SUV may help it some, but the lower center of gravity of the Lotus combined with its lower profile tires will keep it handling better, and stopping sooner in icy conditions. Also, the SUVs higher center of gravity makes it almost certain to flip over if it swerves or loses control. That's extremely unlikely in a normal car. Remember, the overwhelming majority of your snow driving is on plowed, but possibly slippery roads. In those conditions. a normal car may slip and slide a bit, but an SUV is very likely to tip. It's actually a safety disadvantage.

    Even if we forget all that, how many people do you see driving SUVs that don't have them full? Mom might use the SUV to drive three kids to school, but the vast majority of the time she drives in it alone. How many people are commuting to work in SUVs? Even if you have a justified use for one, every time you use it without hauling something or filling it with people while hauling something, you're just wasting gas and money. Even if you are a family with a boat, you can buy two normal cars for the price of one SUV. Then for the 2 times a year you actually go on vacation, you can rent the SUV and save a shitton of money.

    In summary. The SUV class of motor vehicles serve almost no practical purpose. When you take the exorbitant cost of such vehicles into consideration, there is no reasonable justification for the vast majority of driving people to own such a vehicle. The worst part is that by driving such a vehicle, you aren't just hurting yourself in the wallet, you're also hurting others. If the people who did not need SUVs did not drive them, demand for fuel would be much lower. You think gas prices are low now, think how low they would be if SUVs weren't all the rage. I bet it would be under $1 almost everywhere in the US.

    If you own an SUV what is your justification for owning it? The only valid justification is "I frequently haul things while carrying more than one other passenger". Another valid answer is "I live in Canada on a dirt road, and the entire family drives on unplowed roads frequently." If you give any other answer, you're an idiot who bought an impractical car for stupid reasons. You're wasting your money, and raising prices for everyone else. Well, unless you won the car in a contest, and someone is paying for your gas. That gets a pass.
    Post edited by Apreche on
  • edited December 2008
    Both my wife and I drive 2001 Subaru Foresters. We get about 25MPG with these vehicles. My wife traded in her Subaru Legacy back in 2001 to get hers because the pricing was good. I got mine after my father-in-law died (cost us nothing). According to Edmunds they are listed as wagons rather than SUVs.

    My previous car was an Integra GSR (Premium gas only) and that thing was terrible in the snow. Before that I had a GEO Metro (50MPG) that I would not drive now for two reasons: I would die in a car crash and I like to be comfortable when I drive.

    On a related note I think we need to clearly define what an SUV is and what is not. Not all vehicles people think are SUVs are built on truck bodies, as you clearly pointed out.

    For example, unless you have some sort of Safari business you probably do not need a Land Rover or a Hummer. If you are not in the construction business you probably do not need a Heavy Duty Truck. Unless you are an independent satellite TV or home electronics system installer you don't need a utility company bucket truck to drive.

    As for the mom with kids who does not always use her Suburban for driving kids around it may not make sense for her to have another car in the family. In fact, some towns charge you more in vehicular taxes if you have an "extra" car in your driveway. Even though she is spending more money on fuel she is also saving by not having to purchase another car and pay taxes on that car.

    I would not mind having an AWD vehicle that gets better than 25MPG but why would I want to spend $20K+ on a new vehicle when the one I have is paid for and runs perfectly?

    edit added later
    My brother owns one of those Super Heavy Duty trucks with a Cummings turbo diesel or some such over powered engine in it. He drives it around town but he also only lives three miles from where he works. Why does he have one of those 11 MPG behemoths? He needs it to pull his camper. My brother spends the summer months and school vacation weeks dragging the whole family off to camp grounds. He needs something that will pull the weight. Since he does not put a lot of miles on that truck driving it around town the 11MPG does not bother him. A busy month of driving for him is 500 miles, I put 500 miles on my car every two weeks.

    I work with a guy who drives a big Dodge truck with a V8 in it. I think he told me he gets about 13MPG with it. He needs it to pull the trailer with his boat on it (yes, it's a good sized boat). He can't afford to own two vehicles (divorced) so he just has the one. He has to have the truck to pull his trailer so he does not have an option other than owning the truck.

    There are many people who can not afford to own an extra vehicle and do have a need for the vehicle with the horrible MPG even if that need is only seasonal. Driving with a group of people who are your friends is a lot different than driving with a group of people who are your kids...
    Post edited by HMTKSteve on
  • edited December 2008
    Take for example the Mazda CX-7. It's basically a minivan with the RX-8 engine, and a boxier frame.
    Actually the CX-7 uses a turbocharged 2.3 liter inline four cylinder engine from the Mazda 6. The Wankel engine would be a bad choice for any sort of towing, the motor's biggest downfall is a lack of torque at low RPMs.

    As for light cars in the winter; I have found my very light Scion xA tends to ride on top of snow, rather then cutting through it, leading to severe under-steer when the roads have not been sufficiently plowed. The one big advantage the lotus would have, is that all of the weight of the car is over the drive wheels.
    Post edited by Cramit on
  • edited December 2008
    The Wankel engine would be a bad choice for any sort of towing, the motor's biggest downfall is a lack of torque throughout the rev range
    fixed that for ya.
    The one big advantage the lotus would have, is that all of the weight of the car is over the drive wheels.
    Do you realize that naturally the heaviest part of a car wants to be in front? This means that the car is going to try to spin all the time in snow.
    Post edited by George Patches on
  • edited December 2008
    Both my wife and I drive2001 Subaru Foresters. We get about 25MPG with these vehicles. My wife traded in her Subaru Legacy back in 2001 to get hers because the pricing was good. I got mine after my father-in-law died (cost us nothing). According to Edmunds they are listed as wagons rather than SUVs.

    . . .

    On a related note I think we need to clearly define what an SUV is and what is not. Not all vehicles people think are SUVs are built on truck bodies, as you clearly pointed out.
    That's funny. First you say, "I . . . will always have an SUV because of where I live", then after being called out on your reason, you say, "Wait, when I said I have an SUV, what I really meant was that I have a wagon". Then you totally give up your snow-necessity reason and say that you got the car for free, one of the things Scott said would be the only valid reason to own an SUV.

    Steve: I have an SUV because they're good in snow.

    Scott: SUV's aren't as good in snow as regular cars. Here's why . . .

    Finally, one of the only valid reasons ot own an SUV is if you get it for free.

    Steve: Did I say I have an SUV? I meant to say I have a wagon. Also, I don't have it because of the snow. I got it for free.
    Post edited by HungryJoe on
  • SAAB + snow tires = snow destroyer.
  • We sold our old Saturn to some friends in Maine. It gets 40 mpg and our friends say it does better in snow than their truck.
  • Front wheel drive works really well in the snow. It has enough traction to get you going, but no power to the rear wheels so it's very unlikely to spin out.
  • Joe, you really need to get a life. Seriously.

    Comparing one SUV to one sports car is not a compelling argument. Even in that comparison Scott admits that the only time the sports car may have an advantage is in icy conditions (negligible) and not tipping over due to a lower center of gravity. Clearly the SUV wins out in the driving through snow argument.
  • edited December 2008
    No, Scott pretty thoroughly disproved the "SUV is better in snow" argument.

    Why would you care anyway? Apparently, you don't have an SUV.
    Post edited by HungryJoe on
  • ......
    edited December 2008
    The greater weight of the SUV may help it some, but the lower center of gravity of the Lotus combined with its lower profile tires will keep it handling better, and stopping sooner in icy conditions. Also, the SUVs higher center of gravity makes it almost certain to flip over if it swerves or loses control.
    ...
    Remember, the overwhelming majority of your snow driving is on plowed, but possibly slippery roads. In those conditions. a normal car may slip and slide a bit, but an SUV is very likely to tip. It's actually a safety disadvantage.
    This is such utter nonsense. It made me laugh too much to not mention it.

    Scott, if you have a boat, that you for some bizarre reason need to tow a lot, you buy a car with a diesel engine. Our Volkswagen Golf (4 doors hatchback) could, with extreme ease and still great fuel economy, tow our caravan. Our 4 person house on wheels. Your "You need an SUV for frequent towing" is bullshit. Just get a car with a diesel engine in it.

    EDIT:
    @Steve, your nonsense is so much more laughable that I don't know where to start. So feel blessed.
    Post edited by ... on
  • This is such utter nonsense. It made me laugh too much to not mention it.
    Then explain the massively higher tip rates of SUVs compared to other cars. ;^)
  • Most modern vehicles easily have sufficient torque to tow quite well, diesel or no.
    A diesel engine will consume a lot less fuel while doing it though, which is why tfe is making that recommendation.
  • edited December 2008
    As for your snow excuse. That's complete bullshit. Take for example my car. It's a 2006 Mazda 3 hatchback. A couple winters ago, it had some serious snow problems. For the most part it drove just fine in the snow. However, once it couldn't make it home because of a steep unplowed hill. Another time it couldn't get out of the driveway which was shoveled inadequately. The fact of the matter is that if roads are not plowed, or driveways are unshoveled, you shouldn't be driving on them. The exorbitant cost and stupidity of an SUV is not excused by the one or two times you may have to drive in unplowed conditions.
    Some people have to drive in those dangerous conditions. For example, firemen. Fires don't stop just because it's snowing.
    If I had a Subaru or Volvo with all-wheel drive, I probably wouldn't even need snow tires.
    This is a common misconception among AWD owners. It actual snow (I mean an inch or more, not that light coating bull shit) a AWD car with All-seasons tires is worse than a FWD car with snow tires. Sure the AWD gets you going, but the snows tires let you stop and steer a lot better.
    Just to drive the point home further. Let's compare the snow performance of a 4x4 SUV to a Lotus Elise, a superlight sports car. If the car is stuck in deep snow, or needs to drive on unplowed roads, or uphill, then the SUV will be able to go where the Elise probably won't be able to go. If the Elise had snow tires, that would make up for much of that, but not completely because the car is so light. If the roads are covered in black ice, the Elise will be infinitely safer than then SUV. While the SUV has the power to get going in slippery conditions, it's power to stop is unchanged. Both cars have four anti-lock disc brakes. The difference in stopping power comes down entirely to the friction between the tires and the road. The greater weight of the SUV may help it some, but the lower center of gravity of the Lotus combined with its lower profile tires will keep it handling better, and stopping sooner in icy conditions. Also, the SUVs higher center of gravity makes it almost certain to flip over if it swerves or loses control. That's extremely unlikely in a normal car. Remember, the overwhelming majority of your snow driving is on plowed, but possibly slippery roads. In those conditions. a normal car may slip and slide a bit, but an SUV is very likely to tip. It's actually a safety disadvantage.
    I would never ever, not in a million years, take an Elise over an Explorer in the snow, even if they both had snow tires. All that talk of center of gravity and tire profile means jack shit in the snow. Especially in icy conditions, you won't be able to generate anywhere near the lateral G necessary to flip a SUV on an icy road, but that elise will be trying to spin out every time you turn the wheel or brake.
    Post edited by George Patches on
  • RymRym
    edited December 2008
    you won't be able to generate anywhere near the lateral G necessary to flip a SUV on an icy road,
    I saw flipped SUVs on a semi-regular basis in the winter when I used to commute on the Taconic, so it's most certainly possible.
    Post edited by Rym on
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