Decline of US Auto Industry

[RWebb]

https://techxplore.com/news/2019-07-decline-auto-industry-linked-midcentury.html

[Sooner or later]

A lot of reasons.

Worldwide sales have been flat sijce 2015.

Cost of ownership is too damn expensive.

As far as US manufactures go they were their own worst enemy. My simplified take.

After WW2 we were the only ones left with a manufacturing base. The only competition was from the guys down the street in Detroit. For the most part the public wanted bigger land yachts so Detroit supplied them. Quality only meant meeting the crappy quality of the guy next door.

Then the world turned upside down with the oil embargo. Fuel shortages and higher fuel prices sent the consumer looking for an economy car. Detroit didn't have any so VW, Nissan, and others stepped up to the plate. Japan took a lead in quality by embracing Deming and his continuous improvement/spc to improve product. And it worked.

Detroit countered with the Pinto, Vega, Gremlin, etc. Didn't quite work out.

And it has been downhill ever since.

[Bugsinrugs]

With student loans and the high cost of rent most kids can’t afford a car. Uber and Zip car fills the void.

[Geronimo]

That must be why from 2015 to 2019 car sales have gone from 54.9M to 79M While the automotive industry might be entering a transformative stage, this article seems to be pushing a narrow view of one mans narrative.

[Zeke]

Originally Posted by Sooner or later

A lot of reasons.

Worldwide sales have been flat sijce 2015.

Cost of ownership is too damn expensive.

As far as US manufactures go they were their own worst enemy. My simplified take.

After WW2 we were the only ones left with a manufacturing base. The only competition was from the guys down the street in Detroit. For the most part the public wanted bigger land yachts so Detroit supplied them. Quality only meant meeting the crappy quality of the guy next door.

Then the world turned upside down with the oil embargo. Fuel shortages and higher fuel prices sent the consumer looking for an economy car. Detroit didn't have any so VW, Nissan, and others stepped up to the plate. Japan took a lead in quality by embracing Deming and his continuous improvement/spc to improve product. And it worked.

Detroit countered with the Pinto, Vega, Gremlin, etc. Didn't quite work out.

And it has been downhill ever since.

There have been some good products but not the majority of all products were as good. Therefore, you are correct, just not acknowledging that which has been good.

Trucks and full size SUV's are out of control and I think Detroit is gonna pay hell for that sooner or later. The situation today reminds me of the huge chrome barges of the 60's and 70's.

Who was it that said something long the lines of 'Those who do not learn history are doomed to repeat it'? I think a few have used the thought in various form.

[wdfifteen]

I don’t buy what that guy is selling. It may have been true 15 or 20 years ago, but US auto makers are innovation leaders these days. Hell, you can wave your foot under the bumper of a new Ford and the tailgate will fly open!
Seriously, Tesla and GM’s electric cars were ahead of their time by a decade.

[wdfifteen]

Originally Posted by Zeke

Trucks and full size SUV's are out of control and I think Detroit is gonna pay hell for that sooner or later. The situation today reminds me of the huge chrome barges of the 60's and 70's.

Pickups and road barges are the most profitable products they make. Whether they will have hell to pay depends on whether they act like that market will be around forever or they invest the profits in advanced R&D for the vehicles we will need in 2030 and beyond.

[ian c2]

Simple answer , gas prices ...

Wait til the next big “see how many feathers we can pluck before the turkey squawks” price hike , and you’ll see even more people parking the Escalades or pickups and dragging the old bug or Honda Civic out of the garage to commute with .

When I was traveling for work and using rentals , I’d use the excuse that I was visiting a union job and needed an American car to get a free upgrade from the Kia or whatever pos was the cheapest car .
Chrysler 200 and 300 where great , but the best of the lot was a Chevy Cruze rs .
Great little car .
Proof it can be done .
Unfortunately I think they cost more that a top gti , Audi 3 , or Focus in Europe !! I imagine sales didn’t go well , that kind of money on top of the Kia connection ....

[cabmandone]

Originally Posted by wdfifteen

Pickups and road barges are the most profitable products they make. Whether they will have hell to pay depends on whether they act like that market will be around forever or they invest the profits in advanced R&D for the vehicles we will need in 2030 and beyond.

Well then... we're in for "the bailout part deux" or trois for Chrysler because history shows that GM, Ford and Chrysler as slow on the uptake.

__________________________________________________ __________________________________________________ __________________

As to people parking the big vehicles, I just drove a Yukon XL from Ohio to Cape Cod and averaged 23 mpg on the highway with 7 passengers and all the luggage... and did it cruising at about 75 mph for most of the drive. Not too shabby. A friend just bought a new F150 with the 6 cyl ecoboost, took it to see his folks in Kentucky and averaged 24 mpg. For blended driving he's averaging 20.6 right now.. again... not too shabby. Hard to park or get rid of 24mpg to pick up maybe 8-10 mpg on the highway in a smaller vehicle.

[Arizona_928]

when FCA builds there trucks in mexico, yet the Tundra is built in Tejas.

hmmmmmm I wonder why they aren't doing soo good...

[ian c2]

And the Jeep Is built in the fiat factory , while the fiat is built in japan

Most older manufacturers have there own design cues .
BMW kidney bowls grill and rear window angle , Aston martins famous grille , Cadillac vertical tail-light array , Chevy square wheel arches etc etc .

Wait ...
What ???
Chevy square wheel arches ???


Mmmm.......

No big deal they’re rebadging kias and Hyundai’s , after all Chevrolet is French ..

[Sooner or later]

Originally Posted by ian c2

Simple answer , gas prices ...

Wait til the next big “see how many feathers we can pluck before the turkey squawks” price hike , and you’ll see even more people parking the Escalades or pickups and dragging the old bug or Honda Civic ...

I think fuel prices are going to be under pressure for quite a while. Opec and the Sauds don't have near the power they once had. The oil companies that we love to hate have put them in a bind.

The Permian basin can't get oil out and has basically capped wells. A couple of new pipelines are about to come on line and the faucet will be opened back up. SCOOP. And STACK plays in Okla are just being explored and look to be huge.

You know it is bad when the Sauds are going go open their books to the world with the IPO of ARAMCO. A 2 or 3 billion offering. A market cap bigger than Apple and Amazon combined. Over twice the market cap of Exxon/Mobile, BP, Total, and RD Shell combined.

Add in an ever increasing electric car market and the pressure is on.

[ian c2]

Yeah , they’ll sure put the prices down and lose profits as more people go electric ...

USA being self-reliant is a great political thought .
But it will not help us people commuting to work each day (sometimes in refineries)

[Sooner or later]

Originally Posted by ian c2

Yeah , they’ll sure put the prices down and lose profits as more people go electric ...

They are screwed either way. That is the reason for the ipo. There is no way in hell they want to open up their books and let folks see their actual reserves. But the change in production is forcing them to do the unthinkable.

The Sauds already tried to drive out the US producers by crashing prices and all that did is cost them 250 billion out of their cash on hand. They are in such bad shape they are taking on debt when in the past they could bank the profit.

If they cut back production to raise prices it only opens up more US areas into being profitable. They lose even more market share. The last 5 years has turned the oil energy upside down. The tech advances and fracking has accomplished something that no one could even dream of 10 years ago.

[tabs]

The Saudis have planned for the day the oil ran out...

[ckelly78z]

Don't tell the folks working 7 days a week in the auto parts manfacturing plants during this (and other) hot Summers. Our Japanese based (rubber suspension parts) factory has been falling behind to suppliers, and have now implemented mandatory extra 4 hour shifts to help cover vacations. I'm on the prototyping/engineering side of this business, and can see the stress from my floor co-workers.

I can't count the number of new F150s in the parking lot.

[petrolhead611]

The Chevy Cruze didn't sell in Britain because even though cheap, it was poor value compared to European and Korean cars because it wasn't as good as them in many ways.

[jcommin]

Originally Posted by wdfifteen

I don’t buy what that guy is selling. It may have been true 15 or 20 years ago, but US auto makers are innovation leaders these days. Hell, you can wave your foot under the bumper of a new Ford and the tailgate will fly open!
Seriously, Tesla and GM’s electric cars were ahead of their time by a decade.

I'm not buying the article either. Just about every OE pass car manufacture is just in time - The model is based on the Toyota Productin System. Toyota has classes and workshops to learn and engage in their system. It is open to anyone. Every auto company may call it something else, but is is the Toyoto system.

There are allot of things changing in the US auto market: buying habits, driving habits, Americans are keeping cars longer (11.7 years), cost, personal debt. ride sharing - on and on.

The auto aftermarket is off and will be for the next few years - Major car repairs occur whren the vehicle is 10 years old. Ten years ago, we were in a recession - car sales dropped.

Technology has not taken a back seat. There are more options and electronics than ever. There are new high strength steels, aluminum, plastic and other material used to reduce weight, cost and increase fuel efficiency.

It is a tuff business - OE suppliers typically have a 3-5 years contract usually coupled with a 3%-5% per year price reduction over the length of the contract. This is hard to do with annual wage/benifit/material/inflation costs. To meet those challenges, you automate, move processes to low cost countries/states and continuously improve processes. You can't sit or you will go out of business.

[cabmandone]

One argument the article mad is that Japan leads in innovation.. If true, why can't a Toyota 4 Runner get better mileage than a much larger Ford Expedition or GMC Yukon?? Or a Tundra get better mileage than a F150 or Silverado 1500?? Ford using Turbo charged engines and Chevy using a cylinder drop from 8 to 4 is pretty impressive stuff in my book.

[widebody911]

Originally Posted by wdfifteen

Hell, you can wave your foot under the bumper of a new Ford and the tailgate will fly open!

IIRC, the Pinto had a similar feature