[jtkratzer]

I was going to say the same thing about fuel prices. They will rise again and I believe this is a very narrow-minded decision.

I follow the news quite regularly and saw the press event the Ford CEO held about three weeks ago announcing they will only build specialty vehicles, trucks, and SUVs due to those having a larger profit margin. He said they weren't making enough money on the high-volume, low-cost cars. Wait! What!?! Henry Ford is probably rolling over in his grave. Ford rose to popularity due to its ability to mass-produce a vehicle for the average citizen. How can you not make money on the number of fleet vehicles they sell?

Oh, you answered my question. But isn't it 90% of the problem?

Internet, online dealers like Carvana, and the competition that comes with online price shopping have killed the margins on cars. All of the money to be made selling cars is on the warranty, loan interest rate, and accessory markups.

I think Americans need to embrace diesels. VW’s scandal came at the worst time. I was nearly 100% diesel with my three vehicles, but nothing existed in the SUV market that wasn’t at least $60-$70,000 new. 2/3 isn’t bad. Diesels give you the fuel economy without sacrificing the fun like the Volt or Prius. Would love to see a diesel electric hybrid.

[monochrome]

I’m curious, but already made an assumption, about the political affiliation based on the mentality here, not yours, the imposing of one’s will and opinions on others.

I was going to say the same thing about fuel prices. They will rise again and I believe this is a very narrow-minded decision.

I follow the news quite regularly and saw the press event the Ford CEO held about three weeks ago announcing they will only build specialty vehicles, trucks, and SUVs due to those having a larger profit margin. He said they weren't making enough money on the high-volume, low-cost cars. Wait! What!?! Henry Ford is probably rolling over in his grave. Ford rose to popularity due to its ability to mass-produce a vehicle for the average citizen. How can you not make money on the number of fleet vehicles they sell?

Oh, you answered my question. But isn't it 90% of the problem?

Well, this thread is about cars, so if we keep it about cars and not politics we’re probably ok.

Short answer - people are expensive. Capital (for robots) is comparatively inexpensive, but still costs enough that Ford can’t turn a profit on the (reduced) volume of sedans. They don’t costs enough money. The reduced unit volume is the problem, and the CAFE targets. And fleets don’t buy sedans, either. Enterprise Rental Car is in St. Louis and I’m acquainted with many management types there. At the margin, if Ford can’t sell Tauruses to Enterprise any more they can’t make Tauruses at all.

Oddly, Honda only has one robot model. They add purpose-use attachments and control them with software. They get economy of scale globally on their freaking robots! AND they let line workers control the computer to speed up or slow down the station if there is some kind of fault. Shop Stewards aren’t involved at all (because they don’t have them). There’s a great story about a line worker taking the initiative to reboot his station computer after a blue screen and get the entire line restarted at half speed before the Supervisor could even get to his workstation. They ran at half speed until shift change and used the fifteen minute break to re-image the computer. He got a $10,000 bonus.

Ford/GM/Chrysler builds a custom robot for each workstation, designed to accommodate the work rules mandated by the collective bargaining agreement. They simply cannot be as nimble as Honda (or Toyota). And Honda and Toyota pay better than GM/Ford/FiastChrysler to boot.

But - when you complain too much about labor, eventually you’re complaining about you neighbor’s job. What you and I pay for a car or what car we choose to buy directly affects your neighbor’s livelihood. It’s a tough balance to maintain, and you have to be very thoughtful about what you say. One of my grandfathers was a Chevrolet UAW Shop Steward.

Large Scale manufacturing is really, really hard to do - witness Elon Musk has not been able to scale up the Tesla Model 3 mid-sized electric vehicle to GM level volume. Too many robots, not enough people and too complex a supply chain. And Elon Musk is very good (he can do SpaceX but he can’t do cars).

The similarity to the sudden change in the camera business is eerie. These changes happen slowly, then suddenly.

[Racer X 69]

None of this is any of your business. Drive what you want. Stay out of my garage.

I’m curious, but already made an assumption, about the political affiliation based on the mentality here, not yours, the imposing of one’s will and opinions on others.

The answer to the question will be entirely dependent on the prior political affiliation of the one upon whom the other’s will is imposed, I suppose.


* No political affiliation, but maybe Classical Liberal or Jefffersonian Democrat if a label is helpful. And Flyover, so an undercurrent of Bitter Clinger and Deplorable.

I like it. Stopping there as there’s no need to derail this thread with politics.

Well, this thread is about cars, so if we keep it about cars and not politics we’re probably ok.

Short answer - people are expensive. Capital (for robots) is comparatively inexpensive, but still costs enough that Ford can’t turn a profit on the (reduced) volume of sedans. They don’t costs enough money. The reduced unit volume is the problem, and the CAFE targets. And fleets don’t buy sedans, either. Enterprise Rental Car is in St. Louis and I’m acquainted with many management types there. At the margin, if Ford can’t sell Tauruses to Enterprise any more they can’t make Tauruses at all.

Oddly, Honda only has one robot model. They add purpose-use attachments and control them with software. They get economy of scale globally on their freaking robots! AND they let line workers control the computer to speed up or slow down the station if there is some kind of fault. Shop Stewards aren’t involved at all (because they don’t have them). There’s a great story about a line worker taking the initiative to reboot his station computer after a blue screen and get the entire line restarted at half speed before the Supervisor could even get to his workstation. They ran at half speed until shift change and used the fifteen minute break to re-image the computer. He got a $10,000 bonus.

Ford/GM/Chrysler builds a custom robot for each workstation, designed to accommodate the work rules mandated by the collective bargaining agreement. They simply cannot be as nimble as Honda (or Toyota). And Honda and Toyota pay better than GM/Ford/FiastChrysler to boot.

But - when you complain too much about labor, eventually you’re complaining about you neighbor’s job. What you and I pay for a car or what car we choose to buy directly affects your neighbor’s livelihood. It’s a tough balance to maintain, and you have to be very thoughtful about what you say. One of my grandfathers was a Chevrolet UAW Shop Steward.

Large Scale manufacturing is really, really hard to do - witness Elon Musk has not been able to scale up the Tesla Model 3 mid-sized electric vehicle to GM level volume. Too many robots, not enough people and too complex a supply chain. And Elon Musk is very good (he can do SpaceX but he can’t do cars).

The similarity to the sudden change in the camera business is eerie. These changes happen slowly, then suddenly.

Unfortunately this series of posts have stepped into discussion of things we do not wont to go into here. It always devolves into something that is akin to a bar room brawl on a Saturday night.


So gentlemen, please refrain from this exchange of dialogue.


Thank you.

[Racer X 69]

Internet, online dealers like Carvana, and the competition that comes with online price shopping have killed the margins on cars. All of the money to be made selling cars is on the warranty, loan interest rate, and accessory markups.

Actually the profit margin on new car sales has always been slim. Manufacturers make their money on repairs and maintenance.


Oh, and the age old art of upselling.


Ever notice that every time you take your car to the dealer they always find stuff that needs fixed that you didn't know needed fixing?

[Racer X 69]

Actually the profit margin on new car sales has always been slim. Manufacturers make their money on repairs and maintenance.


Oh, and the age old art of upselling.


Ever notice that every time you take your car to the dealer they always find stuff that needs fixed that you didn't know needed fixing?

Of course I'm the kind of guy they hate. I have only bought 3 brand new vehicles in my life. A motorcycle way back when I was in college, the Dodge 3500 in 2001, and my Legacy in 2005.


Every other car I have owned I bought used, and this Toyota pickup had well over a half a million miles on it when I retired it.

[Canada_Rockies]

I will turn 78 in June. I have bought 4 new vehicles in my entire life. My last 3 vehicles were new. The current vehicle just went through 290,000 Km (180K miles) and I expect it to go through 500,000 (300,000+) if I live that long. BTW none of the new vehicles were "brand new" -- one demonstrator and 3 still on the lot when the new ones came in the following year. My current is a 2002 bought September 6 2003 with 206 Km on the clock. That's 206.0 Km (128 miles). I live in pickup country. I tow a small 5th wheel trailer with my pickup. The trailer is a 1981. Only the Good Lord knows how many Km it has followed trucks. Bought used, of course.

If your Dad was a commercial fisherman running a single handed self owned boat, there was never any money for new anything. I took my drivers license on a 1940 Chevrolet panel van. That makes it a year older than I was at the time, if my car model years are accurate.

[lesmore49]

Best used car I ever had, was a '76 Chevy Impala. It had been bought new by my parents in December 1975, my wife and I bought it from them in May, 1984 and it lasted with very little repair till July 1997. Had the Chevy 350 cubic inch (5.7 liter) V8, which after our ownership, went into an '81 Firebird. Still may be running. Oil was always changed every 3000 miles with Quaker State oil and a Delco oil filter.

Tremendous vehicle...we piled the miles on, in daily driving, also used it to tow our RV trailer throughout the Canadian prairies, BC, Vancouver Island, Washington, Idaho, Montana, Dakotas, Minnesota, Wisconsin and Ontario.

---

Last edited by lesmore49; 04-26-2018 at 10:46 PM.

[builttospill]

Actually the profit margin on new car sales has always been slim. Manufacturers make their money on repairs and maintenance.

Oh, and the age old art of upselling.

Ever notice that every time you take your car to the dealer they always find stuff that needs fixed that you didn't know needed fixing?

Don't forget used cars at dealerships. They bring in more money than new cars.

[ThorSanchez]

Internet, online dealers like Carvana, and the competition that comes with online price shopping have killed the margins on cars. All of the money to be made selling cars is on the warranty, loan interest rate, and accessory markups.

I don't know if that would have happened anyway, but there's a lot of schadenfreude with car dealers. I don't feel one bit of sympathy for them and their disappearing margins. For years they had all the information and all the experience playing tricks on customers, and most of them had no problem using it. Pretty much everyone who's ever bought a car has some story about lies and deceit and trying to get upsold on undercoating and pinstriping and "my tech just can't find your keys, how about you wait over here and we'll talk a little bit."


Most people go into a car buying experience expecting that the dealer is an unnecessary middleman who is going to lie to them, so they embrace TrueCar and Carvana and the like to try to level the playing field.

I think Americans need to embrace diesels. VW’s scandal came at the worst time. I was nearly 100% diesel with my three vehicles, but nothing existed in the SUV market that wasn’t at least $60-$70,000 new. 2/3 isn’t bad. Diesels give you the fuel economy without sacrificing the fun like the Volt or Prius. Would love to see a diesel electric hybrid.

Priuses gave electrics and hybrids a bad name. There's no reason electric motors can't be every bit as fun and engaging and have the utility of a internal combustion motor. The Porsche 918 hypercar is a hybrid. The Tesla P100D, a 4000+ lb sedan, will out-drag anything except maybe a street legal drag car like the Dodge Demon (which was basically made just to try to beat the Tesla by a tenth or two 0-60). A Tesla Model X SUV/van thing will beat a Dodge Charger Hellcat in the quarter mile. As batteries and fuel cells and electronics improve the range issue will be rendered mostly moot, and performance could well be such that electronic nannies will be needed to keep people from killing themselves and everyone around them.


There will be electric trucks, with motors that have max torque at 0 rpm so they can pull a redwood stump out with the best F450 diesel.


I think that diesels are all but dead, mostly because of the emissions problems. They're simply not as clean burning as gas, and VW's scandal highlighted that. It takes a lot of tech to make them close, and after you've done all that you're left with a car that's more fuel efficient but probably less clean and with less performance unless you're towing something. Even traditionally diesel nirvanas like Germany are starting to crank up restrictions. Trucks will probably be the last holdouts, but then again... nobody really cares if you have 2000 lbs of batteries hidden under the truck bed so maybe not. They'll just have to convince guys named Tex Rawlings that Al Gore doesn't win if he buys an electric.

---------- Post added 04-27-18 at 07:52 AM ----------

Don't forget used cars at dealerships. They bring in more money than new cars.

One thing I didn't fully wrap my head around until recently was that the used car market has an advantage over new for a dealer: If you want something particular the dealer has leverage. On a new car you can always place an order and get exactly what you want, and try to work a deal. When I was looking for a 2013-14 Audi S4 with a manual transmission there were 12 for sale in the US. The dealer who had one 60 miles from my house had a huge advantage over the others that were 5, 8, 12, 20 hours drive away. I got a little off the price, but he kind of had me... it was his deal or I was taking off three days of work and going on a long road trip to try to get something better.

[Lord Lucan]

Of course I'm the kind of guy they hate. I have only bought 3 brand new vehicles in my life.

They hate me even more, I have never bought a new car and never will, even though I could afford it. I buy up-market cars 3-4 years old, which are generally very good value as they depreciate fast. It is almost true that the resale value of a top-of-the-range halves as soon as it is driven away from new. But I do not buy very often anyway; I do my own servicing and repairs (even more reason to hate) and generally look after cars, such that I got 270,000 miles and 16 years out of my previous one.

I can also judge a used car quite well (I disconcert the salesmen by immediately putting on overalls and getting underneath), and I know how to get spare parts at a fraction of dealers' prices - grey imports, aftermarket stuff, and knowing what parts are interchangeable across brands (many are). Scrapyards are also good for certain parts - I replaced a cracked headlamp with one from a mail-order scrapyard, £80 including delivery compared with £600 from dealer.

[kadajawi]

Ever notice that every time you take your car to the dealer they always find stuff that needs fixed that you didn't know needed fixing?

Hm, but isn't it possible that the thing really needs fixing? I've had things that needed to be fixed, but I didn't notice them, and they weren't noticed during the service either. So what used to be a cheap repair turned into not worth it anymore.

So I'm glad when they find anything that could turn into something serious early enough.

Diesels shouldn't be dead. They are almost as fun as petrol cars, especially if you like torque and don't like to rev, they are way more frugal, and they can be as clean as a petrol. It can be done.

Plus there's a new diesel petrol engine tech that uses both in order to achieve insane efficiency levels while being very clean (without special treatment).

I've saved 50% on list price on a 3 year old Golf, though if I had ordered it new I wouldn't have paid list price either, so the savings aren't that big. My main reason though was that I could get the car right away, and I needed it urgently. Plus there weren't many cars with the specs I wanted, even with the best selling car in the country.

[Ratmagiclady]

One thing I didn't fully wrap my head around until recently was that the used car market has an advantage over new for a dealer: If you want something particular the dealer has leverage. On a new car you can always place an order and get exactly what you want, and try to work a deal. When I was looking for a 2013-14 Audi S4 with a manual transmission there were 12 for sale in the US. The dealer who had one 60 miles from my house had a huge advantage over the others that were 5, 8, 12, 20 hours drive away. I got a little off the price, but he kind of had me... it was his deal or I was taking off three days of work and going on a long road trip to try to get something better.

Though, admittedly, I probably only would pay the new car prices for custom-ordering something just right, anyway. (Probably especially because standards are so hard to get in the used market these days.) Unless it was something like this putty-beige Scion FR-S I used to drive by on a lot, and was like, "I could be the only one that wants that. If I were in the market I'd stop in and see if it's a standard." I later happened by that dealership helping a friend check out a minivan, though, and they said it was some special edition. So, I dunno, in some parallel world I could have had an advantage from my slightly-odd taste: if few others want just what you want, the dealer could have some pressure to move it along while they can.

(Incidentally, everyone, btw, on the Ford thing, I heard they rescinded a lot of the CAFE standards a few months ago, ...who knows how that figures into the sudden change in what vehicles they'll sell. But a lot of things seem to be having the opposite of the promised effects in the industry in general, it seems. It's probably more like Ford's betting they really don't have to try bringing their average MPG up at all, if anything, and would rather try to steer people toward higher-margin crossovers and stuff even if we're starting to hear more stirrings of people actually being tired of everything being sedans, (even if that's just what a young friend just bought,) and as popular as crossovers are, there's still a huge 'Do Not Want' contingent there. It could be another round of 'downsizing' going on, given tariffs and all manner of incentives for corporations to sell off stuff and just buy back their own stock while the taxes on the gains are cut. Complicated stuff for some of the more globally-manufactured car models, I'm sure.

Anyway, it does seem a pretty bizarre move, and just the kind of thing bound to go wrong as it so often does for the American auto industry, but I guess they're keeping a toe in the hybrid market with the little plug-in Fiestas. Their small cars seem to do really well in Europe, though, and I thought they'd previously been hoping to sell to China's big emerging market and other places gas just isn't so cheap... Anyway, I dunno. Probably, for the future, personally by the time those are twelve or more years old and I might be interested in a Ford, odds are pretty good I'd maybe want a Mustang or a Ranger or otherwise truck-ness from them anyway.

Crossovers just seem too 'neither here nor there' in general, they aren't small or light, still don't seem to carry a whole lot for all that, aren't going to impress me for performance driving and likely usually can't really handle off-roadeyness all that well. It's like they're yet another 'You can't have a station wagon, so here's this' version of the SUV that a lot of people got cause... They couldn't have a station wagon, I guess. I'm kind of like, "How about something like a Volvo 850R and use the fancy technology so it can jack *up* for the half-mile a day I could use the ground clearance?" I guess the upside of those crossovers is kind of like where people realize they aren't using the SUV for much SUV stuff, just like to be up high, so a smaller one is an improvement, I dunno.

[cooltouch]

The carpocalypse continues apace. At least in the States. Ford announced yesterday that they're discontinuing US sales of the Fiesta, Focus, Fusion, Taurus, etc. If you want a Ford it's going to be a pickup truck, an SUV or a Mustang. Or, I suppose the few hundred GTs they sell to hedge fund managers and Jay Leno.

What, no more Crown Vic? Surely the world is coming to an end!

It's the revenge of the people who didn't take physics or dynamics or statics. Bigger, heavier, higher center of mass, less aerodynamic. You can't overcome physics. An SUV will be worse handling, worse performance, and have worse gas mileage than a comparable sedan/coupe/wagon. You're trading enjoyment of life for high driving position and fractionally more cargo space.

This is oh so true. Our recently retired sleek Volvo V90 wagon could do things our new (to us) Volvo XC90 can't. I hesitate to call the XC90 an SUV, though. I think of it as more of a crossover, but it is still a tall vehicle. It has a larger engine (0.3l bigger) with about 50 more hp, and weighs about 1,000 lb more than the old wagon did. And for all this, we're losing about 1-2 mpg in mixed driving. Could be worse I suppose.

I do miss that wagon. I've still got my eyes peeled for a cheap 940 turbo wagon -- last year they were imported to the States was 1995. Don't see many of them anymore.

[kadajawi]

One place I diverge from you is the screen. I'm good with integrated controls with good tactile feedback. I just wish someone would get them right. The fact that Android Auto and Apple CarPlay have spread so quickly is evidence that the automakers are absolutely terrible at man-machine interface stuff. That 2018 cars can still be bought with Nav and other systems that aren't regularly updated and demand $100s for new maps is mind blowing. Paying for new maps is worse than just setting the money on fire, because it encourages them to keep acting like it's 1998.

Mh. Have you tried VW? They tend to do a great job with their infotainment systems, though I'm a bit unhappy with the way they are going, removing physical controls around the screen just so they can make it look nicer and install a bigger screen. The one on my 2013 Golf is brilliant, though granted it was not cheap at around 2,5k Euro. And compared to a modern phone it could be faster. But it's rock solid, the interface is nice to look at AND nice to use, with smart ideas like buttons getting bigger when your finger gets closer to the screen.

I have my smartphone next to my steering wheel, but a) using it isn't legal, and b) it's way more frustrating.

The Ford thing shocked me. That can't make any sense. And if it's a fleet thing, why of all things keep the Mustang? If one car can't fulfill modern standards, that should be the Mustang, no? Besides, it's not like they have spent money on developing those cars anyway. A big cost factor is gone. They need these models for Europe etc. anyway.

@Ratmagiclady: What's a standard?

[builttospill]

@Ratmagiclady: What's a standard?

A standard is another term frequently used to describe a manual transmission, e.g, standard versus automatic.